New residents will have the choice to pay for their accommodation either as a refundable deposit (a lump sum, also known as a refundable accommodation deposit or ‘RAD’), an equivalent daily payment (a periodic payment, also known as a ‘daily accommodation payment’ or ‘DAP’) or a combination of both.
A new resident will have up to 28 days from entering care to choose whether to pay the agreed accommodation price by a refundable deposit or daily payment or some combination of both. The daily payment is paid unless and until a refundable deposit is paid. Daily payments must not be required more than one month in advance.
Daily payments can be paid by the resident or drawn down from a refundable deposit the resident has paid to the provider, if the resident has elected to pay a combination of a refundable deposit and a daily payment.
From 1 July, you will have 28 days after entering a facility to decide whether to pay for your accommodation as a refundable accommodation deposit or a daily accommodation payment.
Your choice can have an impact on your financial assets, which can therefore influence how much you pay for your ongoing care fees.
Everyone entering an aged care home in Australia is assessed by a government representative from the Aged Care Assessment Team (ACAT). Your doctor, the Dept of Health & Family services, a social worker or a community nurse can arrange an assessment. After the assessment ACAT will recommend the level of care required and provide advice on what the assessment means.
The distinction between high-level and low-level care no longer exists a. ACAT assessments will simply be used to determine that any form of care is needed.
When moving to aged care, you need to decide whether to sell or keep your home. While there are a number of factors that will influence this decision, it is important to know that keeping or selling your home can affect your ongoing care fees if you enter a facility on or after July 1 this year.
If you enter aged care on or after 1 July 2014, the value of your assets, which may include your home, will be used in the calculation of your ongoing care fees.
If you decide to keep your home, it is important that your accommodation costs are structured correctly in order to continue to receive favourable Centrelink treatment.
For over 50% of people, it can take more than a month after receiving an aged care assessment to enter a subsidised residential aged care facility, so it may be best to act sooner rather than later.
The new arrangements will only apply to residents entering care on or after 1 July 2014.
Current residents will remain on their current arrangements. However, if a resident leaves care for more than 28 days, they will be subject to the new provisions when they re-enter care. A resident will also be given the option to change to the new system if they move to a new aged care service.
Full age pensioners will pay no means-tested fee
Annual cap of $25,000 (indexed) and lifetime cap of $60,000 (indexed) on means-tested fees.
Residential care recipients can be asked to pay:
- A basic daily care fee of up to 85 per cent of the single basic age pension
- A means-tested fee (if applicable) that covers the accommodation payment and care fees
- A residential payment can be paid as a refundable deposit (lump sum), a daily payment or a combination of both
- An extra service fee
- Any other amounts agreed between the care recipient and the approved provider (eg, for provision of pay TV, wine, newspapers and hairdressing services).
Residents will be means tested to determine the financial contribution they need to pay towards their aged care. There are three components to the total fee payable which comprise of a:
Basic daily fee of 85% of the single basic pension
A care fee
An accommodation payment
In regard to the Care Fee, annual and lifetime fee caps will apply. From 1st July 2014, care fees for age care residents will be capped at a maximum of $25,000 per annum and $60,000 over their lifetime.
Residents will have up to 28 days after entering a facility to decide on their payment method. Accommodation costs will be determined by a resident’s assessable income and assets. The prices of rooms must be published on the ‘myagedcare’ website.
From 1 July 2014, there are changes to how you charge new residents for accommodation. These changes will only affect new residents who enter Residential Aged Care after that date.
The distinction between high-level and low-level care will be removed, giving new residents the choice to pay their accommodation costs as a lump sum, a daily payment amount or a combination of both. They will also be able to select extra services for an additional daily fee in participating facilities.
Residents will be required to pay a basic daily care fee.
If the resident is not receiving the full Age Pension, they will generally be required to pay an additional daily fee based on their level of income and assets.
Those already in aged care can continue with their current arrangements unless they leave care and re-enter after a period of 28 days, or if they change facilities and decide to re-enter under the new rules.
Importantly, the current income-tested care fee, which is based on assessable income, will be replaced with a means-tested care fee, which will be based on assessable income and assets.
Accommodation can be paid in three ways: as a refundable accommodation deposit (lump-sum payment), a daily accommodation payment (daily payment) or a combination of both in all facilities.