Who do you know is next for Aged Care?

Who do you know is next for Aged Care?

Yes aged care is staring us in the face & as we have mentioned before it is a minefield. So much so that the productivity commission has just written a report ‘Caring for Older Australians’ & writes ‘the opaqueness of the system’.

Hence the current rules will be rewritten which happens in all games.
Michael S wrote on 16th August 16, 2011 of ‘it must make baby boomers pay more of their aged care bills.
So its countdown for you & I. How can we prepare for it? Yes having the funds is important & having the knowledge to prepare for it minimises your downside.

Remember Proper Preparation Prevents Piss Poor Performance.

Let’s look at some of the framework in Aged care as they stand @ August 2011.

The first step is to be assessed by ACAT [Aged Care Assessment Team].
ACAT assess & approve what kind of care will best suit your needs when you can’t manage at home without assistance.

There are two broad types of residential Aged care & the facilities offered can vary.
1. Low level care as hostels providing accommodation & personal care.
2. High level care nursing homes providing continuous care for those who are frail.

What are the Fees & Charges?

After classification into Low Level care then there is an Accommodation bond where the maximum can be all your assets minus $39,000.

This can be paid as a lump sum or periodically where the facility charges 9% or a combination of both. Out of this refundable bond the hostel can retain $3816 p.a. for 5 years.

This accommodation bond is exempt from Centrelink asset & income tests.

This is when it is important to seek advice before selling the family home.
In general when you enter aged care if your spouse remains in the home then the home is exempt from the Centrelink assets test.

If there is no spouse in the home then the home is not included as an asset for 2 years. The net rent is not assessable if the bond or charge is paid periodically.
I.e. if you sell the home it becomes an assessable asset. [this is the subject of the productivity report.

Then there are daily fees which are a basic daily fee and an income tested fee & an extra service fee.High level nursing home fees have a daily charge depending on your assets.

As above if your assets are less than 39,000 then there is no daily charge. Above $102,544 then the daily charge is 30.55. [August 2011]. In between it is [Assets -39,000] / 2080 = ?

What happens to the family home when assessed? It will be included as an asset unless
• A spouse or dependent child is living there
• or a carer eligible for income support for 2 years
• or a close relative eligible for income support for 5 years
This assets assessment is different from the Centrelink assessment.

What are the daily fees?

The standard resident contribution or Basic fee is 84% of the pension & currently 40.25 daily if non pension income <9,971 or for a couple 19,006. [there are variances on these.]
There is an income tested fee in both high & low level care. & has a daily maximum of 64.69.
This is calculated as [Total assessable income - total assessable income free area] X 5/12

Generally an Income free area is 22,045 for singles & 21577 each for couples.

If we were having this discussion in three years time & you were looking back over those three years what needs to have happened both personally & professionally for you to feel happy with your progress.

Hence you have an opportunity to reduce your total assessable income by utilising some planning & coaching.

There are strategies for this & you are welcome to contact us o 07 3848 1088 or email info@wealthcoach.net.au

A suggestion that maybe relevant for some is the use of various long term income streams.

As these may have a return of portion of your capital then you can reduce your assessable income down by this return of capital. Hence your income tested daily fees are reduced but not your income. These income streams can be tailored for you & hence are very flexible in their design for you.


John McAuliffe