Correct residential aged care terminology please
A polite reminder has come from the Commonwealth aged care regulator asking the industry to use the correct residential aged care terminology please.
Correct Residential aged care terminology for the Centrelink assessed Means Tested Amount
The correct residential aged care terminology for the Centrelink assessed figure is the “Means Tested Amount”.
New entrants to residential aged care are expected to complete the Centrelink form SA457.1711 titled “Permanent Residential Aged Care Request for a Combined Assets and Income Assessment” and send it Centrelink.
Centrelink then use the information that you provide in your ‘Permanent Residential Aged Care Request for a Combined Assets and Income Assessment’ form to calculate your initial ‘Means Tested Amount’ for residential aged care.
The Means Tested Amount comprises an Income Component and an Asset Component. The minimum value of each component is zero. A negative Income Component cannot be offset against a positive Asset Component or vice versa.
The Income Free Area is the annual rate of income that is excluded from the calculation of the Income Test Component of the Residential Means Tested Amount. The Income Free Area could increase to reflect changes in the Age Pension and its Income Test Allowance.
The Asset Thresholds are the changeover levels used in the calculation of the Asset Component of the Means Tested Amount. The three Asset Thresholds are the Asset Free Threshold, the First Asset Threshold and the Second Asset Threshold. The Asset Thresholds could increase each year.
Thus the dollar amount of a resident’s Means Tested Amount is reviewed several times each year to reflect changes in the calculation formula.
Correct Residential aged care terminology for Low Means Resident
If your initial Means Tested Amount is less than the current Maximum Accommodation Supplement Amount then you will be classified as a ‘Low Means Resident’.
A Low Means Resident can be asked to pay a daily Accommodation Contribution.
The Accommodation Contribution is set as the Low Means Resident’s Means Tested Amount.
The Accommodation Contribution is capped at the Maximum Accommodation Supplement Amount for a Low Means Resident whose circumstances have changed significantly since entry to residential aged care.
The Commonwealth could pay an Accommodation Supplement in respect of a Low Means Resident.
The rate of Accommodation Supplement payable in respect of a Low Means Resident is calculated as the Maximum Accommodation Supplement Amount less the current Means Tested Amount for that Low Means Resident with a minimum amount of zero.
Thus an aged care facility could receive the Maximum Accommodation Supplement Amount in respect of each Low Means Resident.
A potential Low Means Resident is expected to lodge a ‘Permanent Residential Aged Care Request for a Combined Assets and Income Assessment’ and receive her Means Tested Amount notification letter from Centrelink before applying for an aged care placement as a Low Means Resident.
Correct Residential aged care terminology for Accommodation Costs
Aged care providers now set an Accommodation Room Price for each place in a Commonwealth regulated aged care facility.
The Accommodation Room Prices for each type of room with the aged care facility must be published on the Myagedcare website. The published Accommodation Room Price must the maximum that would be charged for that type of room.
A potential resident other than a Low Means Resident, may negotiate her Accommodation Room Price for her preferred aged care place. The negotiated Accommodation Room Price must be written in the Resident Agreement for that new resident to sign.
The residential aged care entrant, may choose how much of the Accommodation Room Price she wants to pay as a lump sum. The amount of her Accommodation Room Price that she pays is her Refundable Accommodation Deposit or “RAD”.
The Daily Accommodation Payment, “DAP”, is the interest charged on any part of the Accommodation Room Price that has not been paid as a lump sum. The interest rate applicable to an aged care resident is included in the signed agreement between the resident and the aged care provider.
Correct Residential aged care terminology for daily fees
The Commonwealth regularly reviews the Maximum Basic Daily Fee for Residential Care. All aged care residents are charged this Basic Daily Fee to cover the costs of meals, cleaning, laundry utility bills and the other costs of operating the aged care facility.
Means Tested Care Fees are payable in addition to the Basic Daily Fee.
The amount of the Means Tested Care Fee is calculated as the Means Tested Amount for that resident less the Maximum Accommodation Supplement Amount.
The Means Tested Care Fee for a resident on a particular day is subject to an Annual Cap, a Lifetime Cap and a daily limit of the actual cost of her care.
The Annual Cap is applied to the Means Tested Care Fees in Residential Care for the period of one year commencing on the date of entry to permanent residential aged care or a later anniversary of that date.
The Lifetime Cap is applied to the combined total of Means Tested Care Fees in Residential Care and Income Tested Fees in Home Care.
Understanding how the correct residential aged care terminology applies
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.
Call Christine on 03 9808 0338 to make an appointment for a consultation. Please email your enquiry to Christine@financialcareservices.com.au. you will then receive a Financial Care Services Client 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.
No longer correct residential aged care terminology
Before July 2014, Accommodation Bonds were charged for Low Care and Extra Service High Care in Commonwealth regulated aged care facilities. Seniors who became permanent aged care residents before July 2014 could have Accommodation Bond agreements still in force.
Seniors who entered standard nursing homes before July 2014 could still be paying daily Accommodation Charges.
Income Tested Fees are charged to seniors who became permanent aged care residents before July 2014.
In 2018, the terms Accommodation Bond, Accommodation Charge and Income Tested Fee are not Correct Residential aged care terminology for new entrants.
Financial Care Services an independent aged care cost advisor
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 an aged care consultation.
Before you commit to placing a family member in Commonwealth regulated residential aged care consult Financial Care Services about the options and fee levels. Call Christine on 03 9808 0338 to arrange an aged care Consultation to discuss your family member’s position.
If you would like further confidential, independent and professional advice about Commonwealth regulated residential aged care, Centrelink Pension, granny flat or retirement lifestyle community living issues please contact Christine Hopper .
Disclaimer. These Insights are a general over view based on our understanding of the Social Security and DVA Pension arrangements. Individual entitlements to Social Security and DVA benefits are determined based on your actual situation as documented to Centrelink or DVA. The information contained in this website is of a general nature only and does not constitute “financial advice”.
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