July 2014 New Residents Aged Care Accommodation Charges
The system for determining new residents’ aged care accommodation charges will be different for new permanent residents from 1 July 2014. The changes do not impact on the aged care Accommodation Charges and Accommodation Bond agreements of permanent residents as at 30 June 2014
Aged Care Accommodation Charges to be based on the value of the physical accommodation
As from July 2014, each Commonwealth regulated aged care facility must publish a ‘price list’ for the accommodation offered to new residents. The prices could be different for different styles of accommodation and/or individual rooms within the one facility.
For example, a twin share room with a basic fit out for immobile patients receiving high level nursing care might be priced at $200,000 per bed. In contrast, a spacious single room with its own en-suite bathroom, nicely furnished with quality carpets and window drapes, and with access to well-appointed communal lounge areas could be priced at $500,000.
The maximum Accommodation Price is expected to be set at $550,000 in July 2014. But individual aged care facilities may apply to the Aged Care Pricing Commissioner to allow a higher price for very superior accommodation.
New Supported Residents will not pay Aged Care Accommodation Charges
A new permanent resident who has a very low value of Assessed Assets will not be asked to pay any Aged Care Accommodation Charges. As at April 2014, the cut-off level for Supported Resident status is $45,000 of Assessed Assets. The Commonwealth will pay an accommodation subsidy to the aged care facility in respect of each Supported Resident.
The Commonwealth accommodation subsidy to the aged care facility in respect of each Supported Resident is expected to the adequate to meet the accommodation costs for a basic style of single room with shared bathroom facilities.
New Non-Supported Residents Aged Care Accommodation Choices
A new aged care resident with Assessed Asset of more than $120,000, would be classed as a Non-Supported Resident. The new Non-Supported Resident could view the ‘price list’ for their preferred aged care facility, inspect the actual rooms available and select an aged care placement.
Your choices might be very limited if you are urgently seeking residential aged care in a particular suburban area or country town. You might need to consider a wider geographic area and/or a wider accommodation amenity/price range in times of peak demand.
The process could be similar to choosing your New Year holiday accommodation; what price are we prepared to pay for what style of accommodation taking account of the market conditions. For example, we could take the five star hotel, or three star private hotel or just make do in or the backpacker hostel. Alas, our preferred option of a family friendly serviced apartment is booked out for the school holidays.
New Non-Supported Residents Aged Care Accommodation Agreement
The new resident has 28 days to sign her Accommodation Agreement for the selected aged care placement. This sign up period could be extended to allow for an Attorney or Administrator to be available. A vulnerable or frail resident cannot be asked to sign her own Accommodation Agreement.
The new resident chooses the proportions of the Accommodation Price that will be paid via a “Refundable Deposit”. The remainder of the Accommodation Price will be payable via Daily Accommodation Charges.
The Accommodation Agreement must detail the new Resident’s selected Accommodation, the Accommodation Price and the amount of Refundable Deposit that the resident will pay over the ensuing six months and the part of the Accommodation Price that the Resident will pay via Daily Accommodation Charges.
New Non-Supported Residents Aged Care Accommodation Refundable Deposit
The “Refundable Deposit” is the amount of the Accommodation Price that the Resident chooses to pay as a lump sum. The amount of the “Refundable Deposit” is limited to the Assessed Value of the new Resident’s Assets less $45,000 or such higher amount as prescribed.
The maximum Refundable Deposit is calculated in the same way as the maximum Accommodation Bond amount for a resident who entered Low Care before July 2014. The difference in approach is that the aged care facility must not ask a potential new resident about her Assessed Asset Value until she has become a permanent resident.
Navigating the new Aged Care Accommodation Charges
The new system for Aged care Accommodation Charges presents a new set of challenges for families seeking aged care placements. Families may now chose an aged care placement with a higher Accommodation Price than the allowable Accommodation Bond for their family member under the previous system. Then the family must decide how the new format aged care Accommodation Charges will be paid.
Help is available Christine at Financial Care Services can explain your options under the new system of aged care Accommodation Charges and illustrate your potential financing options. Christine can help you calculate your maximum Refundable Deposit and the initial daily Accommodation Charges together with the daily fees for living in aged care.
A new system of Income Tested Fees will apply to new permanent aged care residents from July 2014. Before you decide on the aged care placement for your family member consult Financial Care Services about the total costs for aged care Accommodation Charges and daily care fees. Remember that changing your assets by selling your home could impact your means tested Centrelink or DVA Pension.
Christine Hopper at Financial Care Services assists clients review their asset position including the potential for claiming the Age Care Asset Assessment Home Exemption and eligibility for a Supported Resident place.
Christine does provide assistance with completing the “Permanent Residential Aged Care Request for an Asset Assessment” form for clients who have difficulty writing answers.
Financial Care Services offers independent professional financial advice to aged care residents and their families. Financial Care Services is owned and operated by Christine Hopper and has no links to any aged care operators or other service providers.
If you would like further confidential, independent and professional advice about aged care entry, 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. © 2014 Financial Care Services Pty Ltd. All rights reserved.
To make an appointment for professional advice, call Financial Care Services
(03) 9808 0338