Aged care fee July 2016 change
Aged care fee July 2016 change
An aged care fee July 2016 change occurred to reflect the annual “indexation” of Age Pension Allowances and the Commonwealth’s payment of aged care costs.
Means tested aged care fee July 2016 change
The Means tested Aged care fee July 2016 change reflects the increase in the Age Pension Income Test Allowance effective 1 July 2016. The Age Pension Income Test Allowance increased by two dollars per person per fortnight. Thus a single Age Pensioner could have an Income of $164 per fortnight before the Income Test impacts her Age Pension.
As a result of the Aged care fee July 2016 change, the income component of the aged care means test is applied to annual income over $25,711.40 for a single aged care recipient. Thus the first $25,711.40 per year, $988.90 per fortnight, of her income including any Age Pension or War Widow Pension, is excluded from the Income Component calculation.
The Income component of the aged care means tested amount is 50% of any Income over $988.90 per fortnight for a single person.
The aged care fee July 2016 change means that an aged care resident who is a member of a couple separated by illness, has the first $970.90 per fortnight excluded from the Income Component of the aged care means test.
Remember the July 2016 increase in changeover amounts for the deemed income calculation. The small increase in the changeover amount for the calculation of deemed financial income could reduce the deemed income of an aged care resident.
A self-funded retiree could get a tiny change in the income component of her means tested care fee as a result of the deeming crossover amount change.
For a part Age Pensioner, the benefit of any increase in Age Pension flowing from the higher changeover amount could result in a small increase in her total income for the Income component calculation. Therefore a part Age Pensioner might not see any significant reduction in her means tested amount for aged care.
Care cost component of aged care fee July 2016 change
The fees that a residential aged care facility collects for caring for each resident includes a “care” component. The care component is based on the “care needs” of each resident as assessed by the staff at the aged care facility according to a prescribed process.
The Commonwealth’s schedule of fees paid to an aged care provider for the actual personal support and nursing care of each resident increased slightly on 1 July 2016. Thus an aged care facility is allowed to charge a little more for the care of each resident. The Commonwealth pays much of these care costs with most residents contributing only a small part.
An individual aged care resident pays a mean tested care fee equivalent to the excess, if any, of her Means Tested Amount over the maximum Accommodation Supplement. Thus wealthier residents could be required to pay all of their care costs.
An aged care resident who is paying all of the costs of her personal support and nursing care could have a small aged care fee July 2016 change in her “care cost” on account of the increase in the Schedule of fees. The care fee for a wealthier resident could also increase if her “care needs” increase, that is, she is assessed as needing more personal support and nursing care.
Aged care fee July 2016 change for new entrants to permanent residential aged care
The families of new entrants to permanent residential aged care face a complex array of fees and charges. Whilst the basic daily fee is a flat rate for all residents, accommodation costs are often negotiable but care fees are means tested.
Residents with few assets can be surprised at how their means tested charges change if their circumstances change later.
Help is available. Christine at Financial Care Services understands the DVA Pensions and Centrelink assessment of the means tested amount for aged care both home care and residential aged care.
A consultation with Financial Care Services helps you understand your potential aged care costs together with the DVA and Centrelink implications of rearranging your assets, leasing or selling the former home.
Financial Care Services welcomes clients from Melbourne and beyond.
Call Christine on 03 9808 0338 to make an appointment for a consultation. Please email your enquiry to receive a Financial Care Services Financial Services Guide and Aged Care Data Checklist.
Assistance with completing the Commonwealth aged care means testing forms is available to clients of Financial Care Services.
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Arrange an appointment for further confidential, independent and professional advice about DVA, Centrelink, lifestyle or financial issues please contact Christine Hopper 03 9808 0338.
Disclaimer: The information contained in this website is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations. © 2016 Financial Care Services Pty Ltd. All rights reserved.