Commonwealth regulated aged care Means Tested Care fees

Commonwealth regulated aged care Means Tested Care fees

by Christine Hopper

All aged care residents pay a Basic Daily fee for housekeeping costs and most permanent residents are charged some accommodation costs. In addition, permanent aged care residents with significant levels of assets and/or income are expected to contribute to the costs of their personal support and nursing care. The Commonwealth regulated aged care Means Tested Care fees represent the amount of the resident’s contribution for personal support and nursing care.

Determining your Commonwealth regulated aged care Means Tested Care fees

The Commonwealth calculates your maximum rate of Means Tested Care fees based on your personal situation. An aged care resident who is entitled to a full means tested Age Pension and has no assets other than a vacant former home would not expect to pay any Means Tested Care fees. In contrast, a very wealthy aged care resident could be required to pay the full cost of her personal support and nursing care.

DVA clients may ask DVA to undertake their means tested care fee assessment based on Asset and Income data as provided to DVA. Centrelink provide the assessments of Assets and Income for any other aged care residents.

Aged care residents who are very wealthy could choose to inform Centrelink that they do not intend to submit an Asset and Income form but they will pay the full costs of their personal support and nursing care. Aged care residents whose assets include interests in private companies and family trusts might decide that the Asset and Income form is too hard and they would rather inform Centrelink that they will pay the full care costs. The Annual and Lifetime caps on means tested care fees are expected to be applied to these residents even though they did not submit full Asset and Income data to Centrelink.

Every aged care resident who prefers to pay just their assessed rate of Commonwealth regulated aged care Means Tested Care fees needs to apply for an assessment of Assets and Income.

Completing the Assets and Income form for assessment of Commonwealth regulated aged care Means Tested Care fees

The Assets and Income form looks long and complex. In practice, the questions are clear.
The initial section identifies the aged care resident and their partnered or single status. The section about the former home and who is still living in it, is new information to Centrelink or DVA.

Aged care residents who are receiving a means tested Pension for Centrelink or DVA, must provide the new information about their former home to supplement the data used for the Pension means tests. These aged care residents could tick the box to ask Centrelink to use their current Pension assets and income data instead of inserting the information into this Asset and Income form. Please beware that by ticking this box you are confirming that the information currently held by Centrelink is complete and correct.

If you have just taken over managing the financial affairs of a frail or demented pensioner then her Centrelink record could be quite old. Hence you could be creating problems for yourself as Attorney, if you do not undertake a thorough check of the aged care entrants’ actual asset and income position.  You could undertake a full review of her assets and then visit Centrelink to have her records updated for Age Pension purposes.

Aged care residents who are not receiving any means tested Pension from Centrelink or DVA, would need to complete the whole Assets and Income form. Blind Pensioners receive the full rate of Age Pension without any means testing so you would need to complete the whole Assets and Income form for an aged care entrant who is legally blind.

Adjustments to your Commonwealth regulated aged care Means Tested Care fees

Whenever your financial; position changes you need to inform Centrelink, or DVA, so that your Commonwealth regulated aged care Means Tested Care fees can be adjusted. Centrelink, or DVA, will use your revised financial information to adjust both your means tested care fees and any means tested Pension. Remember that you must inform Centrelink, or DVA, within fourteen days of any significant changes such as selling your former home or paying a Refundable Accommodation Deposit.

Commonwealth regulated aged care Means Tested Care fees will be adjusted whenever the Age Pension Income and Asset Test Allowances change in July, or the Age Pension is increased in March and September each year.

Your actual Commonwealth regulated aged care Means Tested Care fees are limited to the Commonwealth’s scale of costs for the personal support and nursing care that you require. The Commonwealth scale of care costs is indexed each July.

Where an individual’s assessed amount of Commonwealth regulated aged care Means Tested Care fees is substantial she might only be required to pay the actual costs of her personal support and nursing care. Therefore, if you have chosen to pay your actual care costs rather than have an Asset and Income assessment or you have a substantial Means Tested Amount, you could expect your care fees to increase on account of both indexation of the cost scales and your needs for more personal support and nursing care.

Caps on Commonwealth regulated aged care Means Tested Care fees

New aged care residents who have not submitted an Asset and Income assessment form or contacted Centrelink to register that she will pay the full care cost, could be charged a substantial rate of interim care fee until Centrelink advise a lower rate.

The maximum amount of Commonwealth regulated aged care Means Tested Care fees is capped at $25,731.06 effective October 2015. Once you have paid care fees upto the full Annual Cap amount you cannot be charged any more care fees for this ‘care year’.
Your means tested care fees would resume on the anniversary of starting care fees, either income-tested care fees for a Home Care Package or residential aged care means tested fees.

You cannot be charged any more Commonwealth regulated aged care Means Tested Care fees once the total amount you have paid reaches the Lifetime Cap. All of the residential aged care means tested care fees and/or income-tested care fees for a Home Care Package prior to moving into an aged care, count towards your total for the Lifetime Cap.

The Lifetime Cap on means tested care fees increased to $61,754.55 in September 2015. The Lifetime Cap is 2.4 times the Annual Cap so you would need to be paying care fees for more than two years to reach your Lifetime Cap on Commonwealth regulated aged care Means Tested Care fees .

Help is available with understanding Commonwealth regulated aged care Means Tested Care fees

Aged care means tested care fees and accommodation prices are complex. Using some financial assets to pay a Refundable Accommodation Deposit could impact on your means tested fees and your potential Age Pension amount. Selling the former home to finance residential aged care could substantially change the both the Age Pension and means tested care fees.

Christine at Financial Care Services understands the Centrelink assessment of the means tested amount for aged care both home care and aged care. Assistance with completing the Centrelink aged care means testing forms is available to clients of Financial Care Services.

A consultation with Financial Care Services helps you understand your potential and aged care costs together with the Centrelink implications of rearranging your assets or selling the former home.

Call Christine on 03 9808 0338 to make an appointment for a consultation.

Financial Care Services welcomes clients from Melbourne and beyond. Please email your enquiry to receive a Financial Care Services Financial Services Guide and Aged Care Data Checklist.

Independent aged care financial planning advice services

Financial Care Services is an independent financial advisory service specialising in retirees of modest means and aged care entrants. Our core values of working with clients in their lifetime financial planning supports claiming DVA and Centrelink entitlements. Financial Care Services charges fees based on the work involved in advising you about pensions and aged care financial solutions and arranging your investments.

Christine at Financial Care Services understands both the DVA and Centrelink Pensions systems and the Commonwealth aged care fee arrangements.

A consultation with Financial Care Services helps you understand your potential retirement living and aged care costs together with the DVA and Centrelink implications of rearranging your assets or selling the former home.

Call Christine on 03 9808 0338 to make an appointment for a consultation.

Financial Care Services is licensed to offer investment strategy advice and to assist you to invest. Financial Care Services does not base fees on the value of your assets nor do we accept any commissions or payments from other service providers.

Contact us to arrange a consultation further confidential, independent and professional advice about DVA, Centrelink, lifestyle or financial issues. 

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. © 2015 Financial Care Services Pty Ltd. All rights reserved.