From 1 July 2005, the refundable balance of all lump sum accommodation bonds, paid on entry to residential aged care, will be exempt from the social security and veterans' entitlements assets tests. The exemption applies regardless of when the bond was paid or when the resident entered aged care.
Assistance will also be provided to aged care residents who pay their accommodation bond periodically, or through a mix of lump sum and period payments:
- Residents who pay their accommodation bond partially or wholly by periodic payments will be able to rent out their former home, without the rental income or the value of their former home affecting their rate of pension.
The exemption of accommodation bonds from the assets test implements a Government election commitment. The exemption will provide older Australians and their families with peace of mind about the security of pension entitlements when moving from their home to residential aged care.
As a result of this change, up to 3,000 current aged care residents receiving a social security or Veterans' Affairs pension are expected to receive more income support from 1 July 2005. There are expected to be around 850 pensioners entering aged care every year who will also benefit from this measure.
1 July 2005.
Total Government Funding
$66.3 million over five years (including $2.9 million in 2004-05).