1. Aged Care Costs

2. © Commonwealth of Australia 2016
Disclaimer
Today's presentation is based on the standard Aged Care fees and charges which apply to a person who enters residential aged care on or after 1 July 2014.
Aged Care Rates Quoted are Current at 1 October 2016
The information in this presentation is intended as a guide only. Human Services cannot warrant that it is complete, accurate or free from faults. You are advised to discuss your personal situation with your Aged Care Facility, or the relevant Government Department.
© Commonwealth of Australia 2016
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney General’s Department,  National Circuit, Barton ACT 2600 or posted at
We just talk about standard entry - if we tried covering the variations we would be here all day
Although the rates differ slightly, the principles remain much the same

3. myagedcare.gov.au 1800 200 422 My Aged Care
The Government’s entry point for the aged care system
Access timely and reliable information
Supports you to find aged care services
When someone is looking to know more about entering aged care, finding services and what the Australian aged care system is all about – the myagedcare.gov.au website has all the answers.
myagedcare.gov.au was introduced on 1 July 2013 to alleviate some of the issues (such as multiple information sources and difficulty navigating the aged care system) that made it difficult to access the aged care system.
The My Aged Care phone line operates 8am- 8pm weekdays and 10am – 2pm on Saturdays across Australia.
Aged Care Providers will also be able to use the site to see how their services compare with others.

4. Respite Care
No changes have been introduced to Respite Care Arrangements
Commonwealth Respite and Carelink Centres
The location details for all Centres can be found at the Commonwealth Respite and Carelink Centre website

5. Income Testing in Home Care
Consumers can continue to be asked to pay a basic daily fee for Home Care $9.77 per day
Some consumers can be asked to pay an income-tested care fee
The amount of subsidy paid is reduced by the consumer’s income tested fee
DHS administers the income assessment
There is a fee estimator on My Aged Care website
From 1 July 2014, the income testing arrangements in Home Care will be strengthened to ensure they are applied in an equitable manner so that those with the financial capacity to contribute to the cost of their care do so. There are two types of fees consumers can be asked to pay:
The first is the basic daily fee which consumers currently pay. This is up to a maximum of 17.5% of the single full rate pension. Currently, this is $ per person, per fortnight (valid from 20 March 2015). This amount is indexed in March and September each year in line with changes to the Age Pension.
In addition, new consumers from 1 July 2014 may be asked to pay an income tested care fee, dependent on their income.
Calculating the income tested fee:
based on "assessed" income (pension rules)
pension is included, but Pension Supplement Minimum AND ENERGY ADVANCE not included
The Government will reduce the amount of subsidy it pays based on the care recipient’s income tested fee.
The income test will be conducted by the Department of Human Services.
In addition there is now a fee estimator available at the My Aged Care site – and via the call centre. People can get an estimation of the fees and charges they may be liable to pay. This estimator will become available on the My Aged Care website from 1 July 2014.

6. Grandparenting arrangements Caps on the amount of income tested fees
Home Care Safeguards
Grandparenting arrangements
Caps on the amount of income tested fees
Full pensioners will not pay any income tested fees
Part pensioners pay up to $5, pa ($14.30 pd)
Self Funded Retirees pay up to $10,416 pa ($28.61 pd)
Financial Hardship Assistance
Grandparenting for consumers already in care will enable a smooth transition to the new system. Consumers can continue to be asked to pay the daily fee and any income tested fees payable under the current arrangements. The grandfathering arrangements also apply if a consumer moves between packages, the new fee arrangements will only apply if someone leaves home care for more than 28 days without approval, and then re-enters care.
There are also the caps on income tested fees that I have just mentioned.
The family home, like other assets, will not be included for the income tested fees, they are only assessing income.
Residents will not be denied care on the basis that they can’t afford it.
Financial hardship assistance helps you when you have difficulty paying fees and charges for Home Care Packages or an aged care home. Your fees and charges may be reduced or waived according to your individual circumstances. In these circumstances, the Australian Government will pay some or all of your fees and charges on your behalf.
Hardship assistance will be granted in circumstances beyond your control, such as difficulties selling your home, and not due to a choice you have made (such as giving away your assets).
There are hardship provisions that previously applied in residential care and these are being extended to Home Care packages. The hardship provisions allow a reduction of aged care fees (and a corresponding increase in Government subsidies), where hardship can be demonstrated. These arrangements can cover both income tested fees and the basic fee.
To apply for financial hardship assistance you must complete and lodge the relevant Department of Human Services application for financial hardship assistance form. There are separate forms for Home Care Packages and aged care homes.

7. Basic Services Provided
Basic care and services include:
Accommodation services (also known as ‘hotel services’):
Administration; maintenance of grounds and buildings; utilities; furnishings; bedding; cleaning; waste disposal; laundry; basic toiletry goods; meals; social activities at the home; assistance in emergencies.
Personal care assistance with:
bathing, showering, personal hygiene and grooming; maintaining continence; eating; dressing; moving; communicating; emotional support; administering medicines and carrying out treatments; designing a rehabilitation program; arranging access to health professionals; managing effects of any cognitive impairment.
Complex care and services you may pay extra for 
Aged care homes may provide complex care and services according to your care needs, in addition to accommodation services and personal care assistance. Complex care and services include: 
specialised bedding materials
non-customised mobility goods
incontinence aids
nursing services
allied health services.
Most people receive these care and services without having to pay any extra. If your care needs are not complex overall, the home may ask you to pay additional fees for complex care and services.

8. "Charter of Residents' Rights & Responsibilities"
Resident Rights
Further protected by:
resident agreements
complaint resolution mechanisms
support from advocacy services
"Charter of Residents' Rights & Responsibilities"
Aged Care Complaints Scheme
If you have a concern about the care you or someone else is receiving, it is important that you raise your concern.
You should raise your concern with the service provider first as this can achieve a fast and sustainable outcome. If you are unable to resolve your concern with the service  provider, you can contact Aged Care Complaints Scheme on 1800 
National Aged Care Advocacy Line
An advocate can:
support you in making decisions that affect your quality of life
provide you with information about your rights and responsibilities, and discuss your options for taking action
support you when you raise an issue with the service provider or the Aged Care Complaints Scheme
support you at any stage of the complaints process.
Advocacy is free, independent and confidential. An advocate will always seek your permission before taking action.

9. Rates quoted are current at 1 October 2016
Fees and Charges
Today's presentation is based on the fees and charges which apply to a person who enters residential aged care on or after 1 July 2014
A different fee structure applies to residents who entered care before 1 July 2014
Rates quoted are current at 1 October 2016

10. Overview Accommodation Costs Basic Care Fee Means Tested Fee
Ongoing fees
Means Tested Fee
Extra Services
Basic daily care fee: This covers living costs such as meals, power and laundry. For some people this is the only fee they are required to pay.
A means-tested care fee: This is an additional contribution towards the cost of care that some people may be required to pay. The Department of Human Services will work out if you are required to pay this fee based on an assessment of your income and assets, and will advise you of the amount. 
Fees for extra or additional optional services: Additional fees may apply if you choose a higher standard of accommodation or additional services. These vary from home to home. Your aged care provider can provide you with details of these services and the fees that apply.

11. RAD = Refundable Accommodation Deposit
Residential Aged Care Costs
Aged Care Fee Acronyms
RAD = Refundable Accommodation Deposit
DAP = Daily Accommodation Payment
RAC= Refundable Accommodation Contribution
DAC = Daily Accommodation Contribution
The Australian Government pays for the bulk of aged care in Australia, but as with all aged care services, you may be asked by your service provider to contribute to the cost of your care. 
Depending on your income and assets you may be asked to pay an accommodation payment. This is for your accommodation in the home. Some people will have their accommodation costs met in full or part by the Australian Government, while others will need to pay the accommodation price agreed with the aged care home.
The amount you can be asked to pay for your accommodation will be based on your income and assets, and will be one of the following:
No accommodation costs - if your income and assets are below a certain amount, the Australian Government will pay your accommodation costs.
An accommodation contribution - if you are required to pay part of the cost of your accommodation, the Australian Government will pay the rest.
An accommodation payment - when you pay for the full cost of your accommodation. 
The Department of Human Services will advise which applies to you based on an assessment of your income and assets.

12. Post 1 Jul 2014 Means Test (Assets & Income)
DHS have a combined assets and income test form
Based on September 2016 rates the new means test is:
50% of income over the income threshold; plus
17.5% of assets between $46,500 and $159,631; plus
1% of assets between $159,631 and $385,893; plus
2% of assets over $385,893
Providing a daily means tested amount which can vary if the income or value of assets changes after admission to care

13. Means Test Assessment DHS or DVA assess assets and income either
using information already held (existing pension details), or
by person providing information if they aren’t receiving an income support payment
via the ‘Request for an Income and Assets Assessment’ form
if a person elects not to disclose income
They will pay the maximum accommodation payment and the cost of their care (they will not be eligible for any government subsidies)
Everyone moving into an aged care home for the first time from 1 July 2014 will need to complete an income and assets assessment form (SA457). This assessment which will be used to determine the costs you could be asked to pay. 
If you currently receive a means-tested income support payment from the Department of Human Services or the Department of Veterans’ Affairs (such as the Age Pension or the Service Pension) you will only need to fill out some sections of the form.   
The Australian Government will conduct your income and assets assessment. They will advise you and the aged care home of the fees payable for your circumstances, if you can be asked to pay towards your accommodation costs, and if so how much. 
If your income and assets assessment is not completed, you will not be eligible for any Australian Government assistance towards your aged care home costs. This means your service provider may ask you to pay the maximum accommodation payment. You will pay the maximum means tested care fee (and you may not be eligible for any subsidies for your accommodation costs).

14. Income includes Assessing Income Earnings from employment
Rental income
Business income
Superannuation pensions and income streams
Overseas pensions
Income and distributions from family trusts
Deemed income on financial assets
Note: Periodic income from reverse mortgages is not assessed as income
We exclude the Pension supplement minimum and the energy advance amount for pension income

15. Financial Assets Bank, building society & credit union accounts
Cash, term deposits, cheque accounts
Managed funds
Shares and securities
Short term income streams (5 years or less)
Loans and debentures
Gold & other bullion
Excess gifts above thresholds

16. All financial investments are aggregated
Deeming
All financial investments are aggregated
(cash, shares, bank accounts, investments, loans)
… irrespective of the actual income received
how deeming works...

17. Deeming - Example deemed income............
so even though the person actually gets $169 pf - it will be the bottom figure that is used to work out their pension or allowance: the fact that they get more...good luck to them..this is what deeming is all about - an incentive to make best use of our financial resources

18. 50% of income above thresholds
Post 1 Jul 2014 Means Test (Assets & Income)
50% of income above thresholds
Single
$992.00
Couples
$974.00
Income Calculating:
based on "assessed" income (pension rules)
pension is included, but minimum supplement and energy supplement are not: $49.10 pf
As at 1 July 2014

19. Asset Tested Amount Calculating the asset tested fee:
based on "assessed" assets (pension rules)
Home is included unless ‘protected person’ is living in the home. The value of home is capped at $159, (for couples $159, each)

20. Assessment of Former Home
Included as asset unless it is still occupied by
Resident's spouse or dependent child
A carer eligible for pension or other income support payment who has lived there for 2 years
A close relative eligible for pension or other income support payment who has lived there for 5 years
Unless the principal home is occupied by a protected person at the relevant time it will be included in the combined assets and income means test
However, the value of the principal home that is included in the combined assets and income means test calculation of the resident’s means tested daily amount will be capped ($157,051 at March 2015 prices)
The exemption of the principal home can be lost if the protected person subsequently moves out of it.

21. Accommodation - Contribution or Payment?
Accommodation contribution or Accommodation payment?
The new combined assets and income test determines the customer’s ‘daily means tested amount’
If the customer’s daily means tested amount at entry is less than the maximum accommodation supplement rate ($54.39) they are considered to be a ‘moderate means’ resident and they won’t pay an accommodation payment
Instead they will pay an accommodation contribution up to $ per day (equal to their daily means tested amount)
If the daily means tested amount at entry is over $54.39 the customer pays an accommodation payment (RAD or DAP)
From 19 May 2014, all aged care homes must publish their maximum accommodation prices on the My Aged Care website, their own website and in other relevant materials they provide to prospective residents.  
The prices will be provided as:
the maximum lump-sum refundable accommodation deposit you could be asked to pay
the maximum rental-type daily accommodation payment you could be asked to pay
an example of a combined payment method, such as 50% payment by lump-sum refundable accommodation deposit and 50% rental-type daily accommodation payment.
The aged care home must also publish their extra service costs if any. These are packages of higher standard accommodation, meals and services which the home can provided at additional cost.
The published accommodation prices are the maximum an aged care home can charge. You and the aged care home can agree to a lower price, so it is recommended that you discuss the options with the aged care home you are interested in. 
You cannot be charged more than the maximum published price. If there is no published price, the provider is unable to charge for accommodation. 
There may be different maximum accommodation payments for different room types in a home. Aged care homes must provide details of the type of accommodation they will provide for a particular accommodation price. This will allow you to compare the prices of  different room types, for example a private room with an ensuite bathroom.
Aged care homes wanting to charge accommodation payments of more than $550,000 as a lump sum, or as rental-type payments based on a daily rate, must have their prices approved by the Aged Care Pricing Commissioner. 

22. Accommodation Payment
If you are required to pay for your accommodation, you will now have greater choice in how you pay.
You can use a:
lump-sum payment, called a ‘Refundable Accommodation Deposit’
regular rental-type payment called a ‘Daily Accommodation Payment’, or
a combination of both.
You will come across a number of acronyms. These include:
RAD (Refundable Accommodation Deposit): This is a lump-sum style payment if you are asked to pay all of your accommodation costs. 
DAP (Daily Accommodation Payment): This is a rental-type payment if you are asked to pay all of your accommodation costs. 
RAC (Refundable Accommodation Contribution): This is a lump-sum style payment if you are asked to pay some of your accommodation costs. 
DAC (Daily Accommodation Contribution): This is a rental-type payment if you are asked to pay some of your accommodation costs. 
You will find the acronyms RAD and DAP are used more than RAC and DAC. Lump-sum payments, whether a RAD or a RAC, work in the same way. Likewise, rental-type payments, whether a DAP or DAC, work in the same way. The different acronyms are used to distinguish if you are paying some or all of your accommodation costs.
If you choose a combination approach, there is the option to have your rental-type daily accommodation payment taken out of your lump-sum refundable accommodation deposit. 
This will mean that the total amount in your refundable accommodation deposit will be reduced over time as your daily accommodation payment is deducted. 
As your refundable accommodation deposit is reduced, your provider may ask you to top up your refundable accommodation deposit or pay a higher daily accommodation payment.

23. Accommodation Payment
Residents have 28 days after entry to a residential aged care home to decide how they want to pay their accommodation payment (RAD or DAP)
Retention amounts will not be deducted from Refundable Accommodation Deposits (RADs)

24. Safeguards for Residents
Grandparenting arrangements
Annual and lifetime caps (apply to means tested fees only):
Annual cap of $26,041.09
Lifetime cap of $62,498.66
Safeguards on the family home
Financial Hardship Assistance
From 1 July 2014 strong safeguards will be in place to ensure access to care for those who cannot afford to contribute to the cost of their care and accommodation including:
Grandparenting for residents already in care will enable a smooth transition to the new system.
The following caps will apply to means tested care fees:
An annual cap of $25,528. Once the annual cap is reached, the resident cannot be asked to pay any more means tested care fees in that year. The Government will pay the full amount of the care recipient’s subsidy and supplements to the provider.
There is also a lifetime cap of $61,268. This means that if a person pays $61,268 in means tested fees in either Home Care or Residential Care, they cannot be asked to pay any means tested fees in either home care or residential care fees for the rest of their life.
The Basic Fee doesn’t count towards the caps, only the Income Tested Care Fees and Means Tested Fee. Residents who have hit one of the caps can still be asked to pay the Basic Fee.
The family home will continue to be exempt from any means testing if occupied by a protected person ie a spouse or dependent child. If the home is not occupied by a protected person the value is capped at $159,423.
Residents will not be denied care on the basis that they can’t afford it.
There are hardship provisions in this situation and they will continue. The hardship provisions allow a reduction of aged care fees and accommodation payments (with a corresponding increase in Government payments) where hardship can be demonstrated. 

25. Basic Daily Care Fee
$48.44 per day
Rates change each March and September each year in line with Age Pension indexation
85% of Maximum basic single Age Pension

26. Daily Means Tested Care Fee
The daily means tested care fee is determined by comparing the means tested daily amount in excess of the maximum accommodation supplement ($54.39) up to the cost of the subsidy per day that is being provided for the care.
Person cannot pay more than the cost of care.

27. Means Test Assessment Process
Resident charged the difference between cost of care and government subsidy
Resident
Aged Care Facility
Income and asset details provided
Subsidy paid to facility
DHS or DVA
DSS
Total means tested amount advised to DSS
Neither the amount nor sources of income are disclosed to the Aged Care facility

28. Former home remains exempt from Pension Assets Test
Exemption of Principal Home
Former home remains exempt from Pension Assets Test
For 2 years from entry to care, or
Indefinitely if partner still lives there

29. Exempt indefinitely home is rented*
Exemption of Principal Home
Exempt indefinitely home is rented*
AND
Person is paying any part of accommodation payment by rental type payment (DAP or DAC)
* rental income is exempt from assessment for the Pension. However, if person enters care after 1 January 2016, net rental income from the home is included as income for aged care means test.
Point out that if the person is not paying DAP or DAC (e.g. low means resident because former home was exempt as family member lived in house) they cannot get the benefit of indefinite assets test exemption and rental income exemption

30. My aged care contact centre 1800 200 422
Additional Information
My aged care website
myagedcare.gov.au
My aged care contact centre
Updates available at Social Service’s website
dss.gov.au/agedcarereform