Can my mum/dad afford aged care?

Aged Care is affordable for every Australian. Those with no assets at all will enter care as a fully supported resident and only ever have to pay approx. 75% of their age pension towards the cost of care. Those with higher means will be asked to subsidise a part of their care. The amount of this will depend on their circumstances and is calculated based on the value of assets and income. Most residents who own a house will have to pay a means tested fee. The means tested fee, however does have both a yearly and then lifetime cap. The yearly cap is $26,566.54 as at 1/1/18.

What steps are involved in accessing aged care?

Review the 5 steps to entry into an aged care home here:

How much will it cost when entering aged care?

The cost of entering care will vary from facility to facility and depending on whether or not you share a room and/or have an ensuite. The newer facilities generally have single ensuite rooms and charge a higher entry fee. Older facilities quite often have shared rooms, shared bathrooms and can be considerably cheaper. If you have no assets you will be accepted as a fully supported resident and pay no RAD. In other cases, RAD’s are capped at $550,000 unless the facility applies for an increase to this amount due to the quality of the facility. In these cases, RAD’s in excess of $1,000,000 may be charged. It is worth noting the RAD is fully refundable. The cost of rooms is listed on the website.

Is it the same level of care at all facilities?

Every facility in the country has a legal obligation to provide a minimum level of care. They are regularly checked to ensure compliance.

How is my aged pension affected by moving into care?

An amount contributed towards the RAD is not counted in the assessment for assets or income for the age pension, however it is counted towards the asset component for the means tested fee. Depending on whether the house is sold, retained, existing investments etc may change your status from pensioner to self-funded or from self-funded to pensioner.

Do I have to sell my house to enter aged care?

Your family home does not have to be sold when entering care. It is one of the options that will have to be considered though. You may have sufficient investment funds to cover the cost of entry into care. The costs can be met through renting the property. Unfortunately, whatever your decision there will be different implications on your assessment for both Centrelink benefits and Means Tested Fee. Specialist advice is recommended in looking at your options prior to making a decision.

What are the fees when entering care?

There are up to 4 types of fees payable when entering a residential aged care facility.

  • Entry fee – RAD (Can be paid as a lump sum, daily payment or combination of both)
  • Ongoing Daily Care Fee (Everyone pays this fee set at 75% of full age pension)
  • Means Tested Fee (Based on your ability – assets/income to contribute)
  • Extra Services Fee (Only payable at extra service facilities for those nice extras)

Do I get my RAD (bond) back when I leave the facility?

If the care recipient dies, the provider must refund the lump sum balance (RAD) less any allowable amounts that have been deducted over the care period, within 14 days of receiving either evidence of probate or letters of administration.

How is my house assessed when moving into care?

The full value of your former home will not be included in the assessment of your assets if you decide to retain it after moving into care. Instead a capped amount of $162,815.20 (as at 20/09/2017) is included unless the market value is lower than this figure.

It will however not be assessed as an asset if:

  • Your partner or dependant child continues to live there
  • A Carer eligible for an income support payment has been living there for at least 2 years or a close relative who is eligible for an Australian Government income support payment and has been living there for at least 5 years.

Can my parents move into care together?

Provided both parents have been assessed and have an ACAT assessment, can move into a care facility together. Many facilities have couples’ rooms or adjoin rooms which have the purpose of providing accommodation for married couples. If one parent has an ACAT assessment and the other does not they still may be able to move into a care facility together however there will be no government support for the parent without an ACAT meaning their costs will be significantly higher.

One of my parents needs to enter care! The other one wants to stay in the family home…………

Everyone’s situation is different, if one parent needs to enter care it can be a traumatic time for all. The family home is not included in the assessment for care, however half of all the other assets regardless of joint or direct ownership is included in the assessment as is any income produced.

Is there a difference between retirement villages and residential aged care facilities?

There is a significant difference between care facilities and retirement villages. Retirement village residents live independently, are generally for over 55’s, are still able to access home care services if applicable. They are provided with leisure activity options and other benefits as agreed upon by the village. They generally charge a fee which usually over a period of time can reduce by 30%, meaning when the resident leaves they may only get back around 70% of their initial investment.

A Residential Aged Care Facility is governed under national legislation. If you have the means you are charged a RAD (Refundable Accommodation Deposit) to enter the facility. This RAD is fully refundable (less any outstanding fees) when you leave the facility. You can generally only enter a facility under health reasons after receiving an ACAT assessment. You are provided with all meals, washing, cleaning, continuous medical support etc.