Australia’s aged care system is set to change with the introduction of new rules for residents entering age care on or after 1st July 2014. The need for financial advice will be greater than ever. Below is a summary of the major changes:
The distinction between high level and low level care will be removed. ACAT assessments will simply determine that care is required.
Accommodation in all facilities can be paid as a refundable accommodation deposit (lump sum payment paid upfront), a daily accommodation payment (daily payment paid on account) or a combination of both. The daily accommodation payment is currently 6.6% of any unpaid portion of lump sum.
Residents will have 28 days to decide whether they want to pay an upfront lump sum or an amount to be included in their fortnightly or monthly bill. Some operators will be asking residents to decide before they are formally admitted as residents.
Accommodation costs will be determined by the accommodation deposit advertised by the facility. Residents who want to pay less will need to negotiate before they enter and/or have their assets tested by the government to prove that they cannot pay the full amount. The prices of rooms must be published on the ‘myagedcare’ website.
Retentions are being removed and lump sum amounts will be fully refundable on departure.
Ongoing care fees
Ongoing care fees will include:
- Basic daily fee – payable by all residents
- Means tested fee – payable depending upon a resident’s assessable income and assets. The maximum daily fee will be removed however yearly and lifetime caps will apply.
- Extra service fee – all facilities will be able to offer extra services for an additional fee.
Assessment of the home to determine ongoing care fees
The value of the home will be assessed for the means tested fee up to a cap of $144,500, unless occupied by a protected person.
Keeping or selling the home
What to do with the family home is one of the most important decisions for people moving into age care. Many people assume that the home needs to be sold to support the cost of an aged care place, but this isn’t always the case.
Seeking good advice can help you or your family members reduce aged care costs and or increase age pension entitlements and provide peace of mind.
William Buck Wealth Advisors specialises in the area of aged care. Please contact our office to arrange an appointment.