Maximising government help in an aged care home: know the rules.
Key Points
Government support for aged care costs is highest for Australians of “low means” - with a complicated test to determine if you are “fully” or “partially” supported with aged care home accomodation costs.
About 20% of aged care residents pay no accomodation cost (fully supported), and another 20% have their cost subsidised (partially supported).
Confusingly - full rate age pensioners are not automatically classified as low means.
Many aged care residents will not know for sure if they qualify for the maximum rate of support until after they submit information to the government - and this can make for some confusion when trying to understand how things will look financially once a loved one is in aged care.
Being admitted as a low means/concessional resident has great ongoing benefit - even if your financial situation changes over the time in an aged care bed.
Avoid confusion and talk to us - not only will you save time, you may also end up saving a lot of money when paying for care.
Below is a simplified guide with links to more detailed Government websites.
Is “concessional” the same as “low means”?
Yes. Aged care homes get a “concessional resident supplement” for the beds they offer to “low means” residents.
This means aged care homes will refer to residents who qualify for these beds as “concessional”.
So when talking about being admitted as a concessional, or looking for a concessional bed, as the resident you are will need to be considered “low means” to qualify.
The next step is working out if you qualify as “low means” - and it’s not the same as being a full rate age pensioner.
To make things even more confusing a “low means” resident may be “fully supported” or “partially supported”.
Is a full rate Pensioner the same as “low means”?
No. A full rate age pensioner is not the same as a “low means” resident.
Firstly - a resident may have income and assets that qualify them for a full rate age pension, but are too high to qualify as low means for residential aged care.
Also - the home is considered in the tests for aged care costs - it can be excluded in certain situations - meaning a close look of the rules is essential.
The team at Later Life Advice are experts in helping people like you understand aged care costs - please email us if you need more help.
How do I know if I am “low means”?
This is where it pays to know how the asset and income tests work. Most importantly, which assets are ruled in, and which are ruled out - especially when it comes to the family home.
The treatment of the former home, and the timing of couples entering into full time residential aged care can have a big impact on costs - it pays to get good advice.
In very rough terms - a resident with assessable assets less than about $200k would be considered “low means”, provided they have assessable income less than about $32k (and this includes the age pension).
The home may or may not be included in this test depending on who lives there. It’s very important to understand the rules around how the home is treated for the test for whether or not the resident is “low means”.
How do I find a place as a low means resident?
Aged care providers need to provide a certain amount of aged care beds for low means residents.
The proportion of beds is based on their location. For example, in the Northern Sydney region, aged care homes that are not “extra service status” need to have a supported resident ratio of 16%. In other aged care regions in Australia the ratio can be as high as 40%.
You can find a listing here.
Where can I find out about more about the rules?
Besides reading through the legislation itself, there are two Government websites that address some of the complexity.
Firstly, you may consider reading about Residential Aged Care Means Testing Scenarios from the Department of Health and Aged Care.
From the aged care home point of view, you may like to read about Managing accommodation payments and contributions for residential aged care.
In each case - there are links to many more pages, forms, processes and updates of threshold, supplements, fees, payments and a whole range of other terms.
Or - for simplicity and save time, you could call us to help you work out exactly what rules apply to you, and what opportunities are available to you in how you approach paying for care.
Get help when you need it
We offer a fast and reliable service to help you get to the bottom of aged care costs at a difficult time.
We bring more than 20 years of experience to help you understand all your financial options when moving a loved one to residential aged care.
We are here to assist if you need us on (02) 9173 8560.
Brendan
*We have simplified, rounded and generally streamlined the rules to make our charts and tables work. We hope this helps you get a better understanding of how you sit within the system. There are a few quirks we may have skimmed over for simplicity - as there always are with government rules and systems - the objective is to call you to action to get to the bottom of your story.
Paying for care?
Do you want someone to work with you to solve the confusion around the costs of aged care homes?
Make sure you are getting all you are entitled to, and that care costs can be easily supported with our help.
Brendan Ryan CFP
We have been working with clients solving the complexity of aged care costs for more than 20 years.
In this time we have learnt that downloading guides, trawling through government websites and reading endless news articles only confuses people at a time when they need absolute clarity.
Let us help you get clear on your situation and ways to maximise government support.
Call me on (02) 9173 8560 or send me an email.
Brendan Ryan CFP