Sometimes age and frailty can mean older people can no longer live independently in the community. More community care at home may be needed or residential care in an aged care home may be the best care option. An Aged Care Assessment Team (ACAT) can assist you in looking at your choices.
Before a resident can enter a residential aged care home, they will need to be assessed and approved for care by an ACAT. An ACAT can also help arrange a place in a suitable home. If a place is not immediately available, the ACAT can help arrange more services in the home in the meantime. For more information about the ACAT assessment see the
'Eligibility for entry to aged care' section.
There are two broad types of residential aged care—low level care and high level care.
- Low level care homes (such as hostels) generally provide accommodation and personal care, such as help with dressing and showering, together with occasional nursing care.
- High level care homes (such as nursing homes) provide care for people with a greater degree of frailty, who often need continuous nursing care.
While some aged care homes specialise in either low level or high level care, others offer both low level and high level care, which may allow you to stay in one location even if your care needs increase. This is often called ageing in place. The ACAT members or representatives of the homes can tell you about the care and services each home provides and whether you can remain at that home as your care needs change.
All residential aged care homes are required to employ suitably skilled and qualified staff to provide assistance to residents. They must also provide a specified range of care and services, according to each resident's care needs at no additional cost to the resident. For all residents, services should include such things as:
- staff to help at all times, including in emergency situations
- assistance with daily living activities such as bathing and dressing
- assistance with medications, meals and refreshments
- basic furnishings
- a laundry service
- social activities.
For residents with high level care needs, the services will also include such things as:
- continence aids
- basic medical and pharmaceutical supplies
- nursing services and therapy services.
On top of these basic services, aged care homes can offer a range of services at extra cost, such as hairdressing.
People naturally wonder about the cost of aged care. While the Australian Government helps you with the cost of your residential care, by providing funding to aged care homes, it also expects those who can afford it to contribute to the cost. Aged care homes may charge a number of fees and charges, though depending on your circumstances, you may not have to pay all of them. For explanation of the fees and charges you might have to pay see the
'Residential daily fees' section.
Some aged care homes provide what is called extra service. This does not refer to the standard of care because the same standard of high quality care has to be provided to all residents. Extra service could include bigger rooms or wine with meals (if medically permitted). This will cost you more. If you are interested in obtaining a place in a home that offers extra service, you should ask about the services provided and the costs involved, when visiting homes.
When you have been offered a place within a home, you may arrange to visit before you move in, to familiarise yourself with the home's surrounding. Once you have agreed to accept a place, you have up to seven days to move into your aged care home.
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Residential care: finding an aged care home
Eligibility for entry to aged care
Before you can enter a residential aged care home, you will need to be assessed and approved for care by an Aged Care Assessment Team (ACAT). The assessment is free.
What does an Aged Care Assessment Team do?
The ACAT helps older people and their carers work out what kind of care will best meet their needs when they are no longer able to manage at home without assistance. The ACAT provides information on suitable care options and can help arrange access or referral to appropriate residential or community care.
How can the Aged Care Assessment Team help me?
The teams are made up of doctors, nurses, social workers and other health professionals who can provide a thorough assessment of your care needs and offer advice on suitable and available care options. The questions the ACAT will ask you are designed to work out how much help you need with daily and personal activities.
You can contact an ACAT directly or your doctor, health centre, or local hospital can provide a referral to the nearest ACAT. Commonwealth Respite and Carelink Centres can put you in touch with an ACAT in your local area. Call your nearest Commonwealth Respite and Carelink Centre on Freecall
TM 1880 052 222. Calls to this number are free from fixed phones. Mobile calls are charged at mobile rates.
Also, on the
Aged Care Australia website (www.agedcareaustralia.gov.au) there is a facility called The Aged Care Assessment Team (ACAT) Finder. The ACAT Finder enables you to look for the ACAT nearest to you.
A member of an ACAT will visit you and ask you some questions about your lifestyle and your health needs to help work out the best care option for you. With your approval, your doctor may tell the ACAT member about your medical history. You may want your carer, friend or family member to be present.
An ACAT can:
- approve eligibility for entry into residential aged care, in either low level care or high level care
- give you information about residential aged care and home care services in your area
- help you arrange special respite care if this is what you require
- approve eligibility for a package of community care to help you continue living at home or refer you to other services that will help you to continue living at home.
What happens after the assessment?
When the ACAT member has assessed your care needs, you will be provided with a copy of a completed assessment form and a description of the assessment outcome in writing, including reasons for the decision. This will tell you whether you are eligible for residential aged care or other care services. If you are assessed as eligible, you should keep this copy of the assessment form and give it to the aged care provider when you move into residential aged care.
Many people are assessed as needing community care services, such as Home and Community Care (HACC), to help them to stay in their own home for as long as possible. If you have complex care needs and you prefer to remain at home, an ACAT may also approve a Community Aged Care Package (CACP) or an Extended Aged Care at Home (EACH) Package, which are packages of coordinated care services provided in your own home. For explanation of these community care services and packages see the
'Community Aged Care Packages' section.
If you are not satisfied with the assessment or recommendations made by the ACAT, you should tell the person in charge of the team who conducted your assessment or you can ask for a review of the decision by the Department of Health and Ageing.
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Finding an aged care home
If the ACAT has approved you as eligible for residential aged care, either permanently or on a respite basis, you may wish to begin the process of finding an aged care home. The ACAT can give you information about residential aged care and home care services in your area.
You are not restricted to applying to one home nor are you restricted to applying to homes in your area. (For instance, if your family have all moved away for work reasons you can apply to homes closer to where they now live.)
The best way to find an aged care home that suits you is to visit a range of homes. You can take a family member or friend with you. Make sure you understand what level of care is available in each home and whether you could stay there if your care needs increased. A good idea is to take a checklist with you on each visit. A booklet containing several copies of a suggested checklist, to allow you to compare different homes, can be obtained from the Commonwealth Respite and Carelink Centre by calling Freecall
TM 1800 052 222. Calls to this number are free from fixed phones. Mobile calls are charged at mobile rates.
The
Department of Health and Ageing has an Aged Care Information Line 1800 500 853 you can call or visit their websites (www.agedcareaustralia.gov.au) or (www.health.gov.au).
The
Aged Care Australia website is your best source of comprehensive impartial information about aged care. If you are an older Australian or looking after an older family member or friend, you'll find a wealth of information in these pages that can help you work out what services are available to help you and how you can get started. On the
Aged Care Australia website there is a facility called The Aged Care Home Finder. This feature enables you to look for the Australian Government-funded aged care homes that meet your particular needs. Please be aware there are other accommodation options, for example, retirement villages, available for older Australians that are not covered by this feature.
While you may not be able to move into an aged care home straight away, there are some things you and your family can do to help things go smoothly when you do. For instance, it can be a good idea to talk to a Centrelink Financial Information Services Officer in advance about the costs you will be paying and your options for paying any accommodation payment. You can make an appointment to do this by calling 13 2300. You do not have to be receiving a pension from Centrelink to use this service. People who receive pensions from the Department of Veterans' Affairs (DVA), superannuants and self-funded retirees are also welcome to make an appointment. The service is free.
You might also want to start thinking about what things you will want to take into the home and make a list to help with getting ready when the time comes. If you have visited a few homes, you will have an idea of the size of the rooms and how much you will be able to take.
When a place becomes available, the aged care home will contact you or your nominated contact person. If you wish to accept the place, you (and if you wish a family member or friend) should then meet with the home's manager to discuss your resident agreement. Once you have accepted the place, you should notify any other homes to which you applied.
In most cases an ACAT approval for high level residential care does not lapse. However, approvals for low level residential care are only valid for 12 months. Therefore, you will need a new ACAT assessment if you do not move into a residential aged care home within 12 months of the approval or if your care needs change.
Residential care: what happens when you move in
When you are offered an aged care place, you may be asked to let the home know within a short time whether you want to accept the place. If you decide to accept the place, you need to fill in any parts of the application form that you did not complete when you first applied to go into that home.
You need to move in to the aged care home within seven days of accepting the place. The manager would then offer you a Resident Agreement, which is a formal agreement between you and the aged care home. You have up to 21 days to sign it. It covers important things like levels of care, daily fees, the circumstances in which you could be asked to leave the aged care home and how the home would help you find other suitable accommodation and how the aged care home would deal with any complaints. T
The Resident Agreement should clearly set out the aged care home's responsibilities to you as a resident and your responsibilities as a resident in the aged care home.
It is important that you do not sign the Resident Agreement until you are sure you understand it. The manager of the home has a responsibility to explain and help you to understand all parts of the Agreement. It is a good idea to use the 21 days to seek further information or advice from friends, family, a Centrelink Financial Information Services Officer, a financial adviser or a legal practitioner. If you understand the document but cannot physically sign it because, for example, you have difficulty using your hands, you may ask someone with legal authority to sign on your behalf. This could be someone with power of attorney. For more information see the '
Power of attorney' section.
If, within 14 days of signing the agreement, you change your mind and wish to withdraw from the agreement, you should advise your aged care home in writing. If you paid any amounts under the agreement, other than your care fees and charges during those 14 days, these must be refunded to you.
If you agree to pay an accommodation bond or accommodation charge, you will also need to enter into an Accommodation Bond Agreement or Accommodation Charge Agreement with the home. This can be part of the Resident Agreement, or a separate agreement. For more information about accommodation bonds and accommodation charges and the details which would be covered in the
Accommodation Bond Agreement or
Accommodation Charge Agreement.
It is a good idea to think about what you would bring in with you in advance of going into aged care. You will probably be moving to a much smaller place than you are used to but you will be able to bring personal things such as photos and other mementos and often some of your own furnishings such as your favourite chair, a television set or a music system. You should discuss insurance of your valuables with the home. The home will also tell you about labelling of clothes that will be washed by staff.
You or your family will need to make sure you tell relevant people and organisations that you have moved into the aged care home. If you are receiving a pension from Centrelink or the Department of Veterans' Affairs (DVA) it is important to notify them within 14 days. As well as notifying them of your new address, you will need to tell them about any change to your financial circumstances, for instance if you pay an accommodation bond or sell your house.
If you receive other income, such as superannuation, you should tell the payer as soon as possible. You also need to tell the Australian Taxation Office and the bank or credit union you use. If you are renting, you will need to tell your landlord.
It is also important to tell your neighbours, any doctors or other health care providers, and community services providers such as Meals on Wheels. If your doctor can no longer visit you when you move, you should ask to have your medical history sent to your new doctor.
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What will happen to my Centrelink or Service pension when I move in?
For many people their Centrelink or Service pension will remain unchanged. However, the arrangements you make to pay for your accommodation and the decisions you make about your former home or other assets may mean some people's pension will change during the time in aged care. For instance, you might get more pension if you are a member of a couple and move into an aged care home.
If I am a member of a couple, what happens to our pensions?
If you are a member of a couple and one or both of you moves into an aged care home, you will both be considered members of an illness-separated couple. This could mean you could be paid at a higher rate, even if each of you currently receive the maximum partnered rate of pension. (The single rate of pension is higher than the rate of pension paid to a member of a couple.)
If this happens, your payment will still be based on your own and your partner's combined assessable income and assets but you will both be paid at the single pension rate. For more information about assessable income and assets see in the
'Income test' section.
What would happen to my Rent Assistance?
If you were receiving Rent Assistance before you moved into care, this would stop after you moved into an aged care home. Instead, different subsidies would be paid directly to the aged care home by the Department of Health and Ageing. If your partner remained in the rented family home, he or she could still be eligible for Rent Assistance.
What happens to my pension if I owned my family home?
Your former principal home is generally exempted from the pension assets test for up to two years from the time you move into an aged care home. This gives you time to decide what to do with your home. During the exemption period the home owner assets test limits apply to you. For information on these limits see in the
'Assets test' section.
After two years, your home may be assessed under the assets test and the higher, non home owner assets test limits apply to you. This happens even if you have spent some of the two years away from the aged care home, for example if you moved back to your family home for a short while.
If you sell your home during the two-year exemption period, the non-home owner assets test limits will apply to you. For information on these limits see in the
'Assets test' section.
There are special arrangements if your partner has continued to live in the family home or if he or she sells the home with the intention of purchasing, rebuilding, repairing or renovating a new home within 12 months, or up to 24 months if certain criteria are met.
There are other special arrangements if you are paying an accommodation charge in a high care aged care home or an accommodation bond by periodic payments in a low care aged care home and your former home is being rented out.
What happens if someone is still living in the family home?
If the family home is still occupied by your partner, the home is exempt from the pension assets test. If he or she leaves the family home to enter care, the home is exempt for a further two years from the time your partner leaves. If the partner remaining in the family home dies, a two-year exemption period for the person in the aged care home aged care starts from the partner's date of death.
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What if I am paying an accommodation charge for high level care?
If you enter high level (nursing home) care you may need to pay an accommodation charge. This could be for a maximum of five years if you first entered residential aged care before 1 July 2004 or indefinitely if you entered residential care on or after that date. For more information on this see in the
'Accommodation charges' section.
If you are paying an accommodation charge and are renting out your former home, your former home will not be assessed under the pension assets test nor will the rent you are getting be counted as income for the pension income test or for residential care fees in the home.
What if I am paying an accommodation bond for low level care?
If you move into low level (hostel) care, you may need to pay an accommodation bond. For more information on this see in the
'Accommodation bond section .
There are a number of ways you can pay your accommodation bond, including lump sum, periodic (fortnightly or monthly) payment or combination of lump sum and periodic payment. If you rent out your former home and are paying some or all of your bond by periodic payments, the former home is exempt from the pension assets test for as long as you are liable to pay a periodic payment. Any income you receive from renting out your former home while you are liable to pay the periodic charge will not be counted for the pension income test or for residential care fees in the home.
How is my former home assessed if I move in to an aged care home from a larger rural or rural residential property?
If you move into an aged care home after having qualified to have all the land on the same title as your home exempted from the assets test, the exemption of your home and land may continue under the same arrangements as the exemption of a smaller property, as explained in the previous section.
The continuing exemption of land will depend on your continuing to satisfy the effective land use rules. A range of factors is taken into consideration to determine if a person is making effective use of the land. The factors include the person's family situation and caring responsibilities, their health, whether the land is being leased or used to support a family member and any current or potential commercial use of the land. If you do not satisfy the effective land use test, then only your home and up to two hectares of land may be exempted from the assets test.
Any income you receive from leasing/renting out your former home and/or exempt land while you are liable to pay an accommodation charge or periodic bond payments will not be counted for the pension income test or for residential care fees in the home. If other land you own is leased, any income you receive will be assessed for your pension and your income tested fees in the aged care home.
Residential care: paying for your care and accommodation
When you move into an aged care home, you may be asked to make two types of payments, daily residential fees and accommodation payments.
Residential daily fees
Residential basic daily fees contribute towards your daily living costs, such as nursing and personal care, meals, linen and laundry, and heating and cooling.
These fees are made up of two components, a basic daily fee and if eligible an additional income tested fee. All residents pay a basic daily fee while only residents who are assessed as having a higher income pay the additional income-tested fee.
Extra service fees are only payable by residents in extra service places.
The Department of Veterans' Affairs (DVA) pays the basic daily fee on behalf of Australian ex-prisoners of war.
Income-tested fees
Some residents may be asked to pay an income-tested fee, depending on their income and level of care. This fee is paid directly to the aged care home as part of the resident's daily fee.
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Who will not pay income-tested fees?
- residents who receive a full means tested pension such as the Age Pension or the Service Pension
- residents receiving respite (temporary) care
- residents with dependent children or full-time students
- residents who are Australian ex prisoners of war.
Who may be asked to pay an income-tested fee?
The amount of the income-tested fee you may be asked to pay depends on the amount of assessed income you have above a certain level. The Department of Health and Ageing determines your income-tested fee based on the income and asset information that you or your nominated representative provides to Centrelink or DVA.
For more information on basic daily fees and income-tested fees you can call the
Department of Health and Ageing Aged Care Information Line on 1800 500 853 or visit their websites (www.agedcareaustralia.gov.au) and (www.health.gov.au).
Working out the cost
To work out the appropriate level of income-tested fees you can be asked to pay, you may need an assessment of your income.
- The existing income details already held by Centrelink or DVA will be used for those residents who receive a means-tested income support payment such as the Age Pension, Service Pension or Income Support Supplement.
- Residents who do not receive a means-tested income support payment, such as superannuants and blind pensioners, will be posted a form by Centrelink to collect relevant income details after their entry to permanent residential aged care. People receiving this form have the right to decline to give their income details for assessment or to refuse permission for Centrelink to give their details to the Department of Health and Ageing. If you choose this course of action you can be asked to pay the maximum rate of total daily fees.
What if my income changes?
If you enter residential care and your income changes during that time you need to inform Centrelink and request a new income assessment. Your new fees and charges will be calculated based on the updated information at the next quarterly review of income tested fees.
What if I am in hardship and cannot pay my aged care costs?
The Australian Government has made arrangements to help residents of aged care homes who may experience difficulty in paying for their care. Hardship provisions exist to help residents who have genuine difficulty paying daily fees and/or accommodation payments. More information about the hardship provisions can be obtained from the Department of Health and Ageing.
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How are my house and other assets assessed for aged care?
To work out whether an aged care resident can be asked to pay an accommodation bond or accommodation charge and, if so, how much, the value of their assets needs to be worked out. Centrelink or DVA will do this. If you have a partner, only half of your combined assets are taken into account in your assets assessment.
In many situations the value of your former home is not included in your assets for an aged care assessment.
The value of your former home is not included in the assets assessment for aged care if, at the time when you go into an aged care home (or when Centrelink or DVA decide on the value of your assets, if that is earlier):
- your partner or a dependent child still lives in your former home
- a close family member who is eligible for an income support payment has lived in your former family home for at least five years
- your carer who is eligible for an income support payment has lived in your former family home for at least two years.
The assets test for aged care is different from the pension assets test. For information on how your home and other assets are assessed for pension purposes see in the
'Assets test' section.
What about if I have given away some of my assets?
Since 1 January 2007 the rules about assets you have given away are the same for aged care as for pension entitlements. This is regardless of whether you are a pensioner. Any amount of over $10,000 given away from 10 May 2006, in a single financial year, or $30,000 given away in a five financial year period, will be included in the assessment of your assets. Under the deeming rules, this can also affect your income-tested fees. For an explanation of deeming see in the
How deeming works People who were already in care on 31 December 2006 are not affected while they remain in that aged care home.
When can I have my assets assessed for aged care?
You do not have to wait until you have an offer of an aged care place to apply for an assets assessment. As soon as you are approved by an Aged Care Assessment Team (ACAT) for permanent residential aged care, you or your family can submit a request for an assets assessment to Centrelink or to DVA if you receive a Service Pension.
Having an assets assessment will help you make decisions about going into aged care. This can be a good time to speak to a Centrelink Financial Information Service Officer to talk about some of the financial decisions you may have to make. You can make an appointment with the Financial Information Service by phoning 13 2300. This is a free service.
Is it essential to have an assets assessment in order to enter aged care?
It is not compulsory for everyone going into aged care to undergo an assets assessment. Assets assessments are only necessary if a person wants to establish their eligibility for an Australian Government subsidy for all or part of their aged care accommodation costs. This is the case even if you have already given Centrelink or DVA information about your assets for pension purposes.
What about if I have moved in from a farm or larger rural property?
A home on a family farm is exempted in the same way as other homes, if a partner, dependent child, close family member or friend is still living in it. The family home includes up to two hectares of adjacent land and possibly more if a 20 year attachment exists. Land, other than land adjacent to the home that has been exempted under the pension assets test, is generally assessed as part of the assets test for aged care. As for pension assessments, an exemption from the assets test for aged care could be provided where productive use was being made of the land on the same title as the home or efforts were being made to lease the land.
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Accommodation payments
When you move into an aged care home, as well as paying for your care you may be asked to pay an accommodation payment. Accommodation payments contribute towards the costs of your accommodation in an aged care home. You only pay accommodation payments if your assets are more than a certain amount set by the Australian Government.
There are two kinds of accommodation payment:
- accommodation bonds if you require low level care or an extra service place with low or high care level needs. For more information on accommodation bonds see below
- accommodation charges, if you require high level care. For more information on accommodation charges see in the 'Accommodation charges' section.
Respite residents cannot be asked to pay an accommodation payment.
Accommodation bonds
An accommodation bond (the bond) is an amount you may be asked to pay if you require low care or enter an extra service place. It is like an interest free loan to the aged care home and, by law, it must be used by the home to improve building standards and the quality and range of aged care services provided.
A bond can only be charged by an aged care home that is certified as meeting minimum building and care standards. You are entitled to know the home's certification status.
The aged care home is allowed to deduct monthly amounts, called retention amounts, from the bond. The government sets a maximum retention amount. This rate is fixed at your date of entry. The balance of the bond is refunded to you or your estate when you leave the home.
Not everyone can be asked to pay a bond. You will not be expected to pay a bond if you have assets of less than 2.5 times the annual single basic pension. From 20 September 2009 this figure will reduce to 2.25 times the annual single basic pension.
Depending on the value of their assets, a person who enters an aged care home will be considered to be either a supported resident or a not supported resident for accommodation payment and subsidy purposes. A supported resident may still be asked to pay an accommodation payment if their assets are between the minimum and maximum asset thresholds. The government may pay the aged care home an accommodation supplement for residents with limited assets who are assessed as supported residents.
How much bond do I have to pay?
The amount of the accommodation bond is agreed by the resident and the aged care provider and is based on the resident's assets level. This accommodation bond may vary widely between residents in an aged care home, as well as between homes. The Australian Government has never placed a ceiling on the size of accommodation bonds and this remains the case.
The Aged Care Act 1997 sets down a number of protections that limit the size of the accommodation bonds residents may be asked to pay, including that the maximum bond size is affected by the value of the assets the resident has at their time of entry into residential care.
Aged care providers are required by legislation to use the income they derive from bonds to improve the standard of accommodation and services in their aged care home. As the income from bonds, including interest earned and the retention amounts, is needed for this purpose, interest may be charged if there is a delay in the payment of the bond or where the bond is paid by periodic payments. Most aged care providers use lump-sum bonds to repay debts incurred to build and upgrade their aged care home.
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Agreeing the amount of your bond
You have 21 days after entering an aged care home to enter into an accommodation bond agreement with the approved provider. New residents have up to six months to pay an accommodation bond as a lump sum. However, you will need to agree on an amount within 21 days. You may be charged interest on the bond amount from the time you enter the aged care home.
It is important to note that many aged care providers allow flexibility around the amount of the accommodation bond requested in situations where residents need to realise assets in order to pay the full accommodation bond amount. In such situations, the accommodation bond agreement includes information that a lesser amount of accommodation bond is to be paid if a property or other assets fail to realise their anticipated price.
Refunding your bond
The aged care home is allowed to deduct monthly amounts from your bond to use in maintaining and improving your accommodation. This is called a retention amount. You need to agree on the retention amount when you move in. However, there is a maximum amount which can be deducted each month. This maximum amount is set by the government and can be ascertained by visiting the
Department of Health and Ageing website (www.health.gov.au) or by calling the Aged Care Information Line on 1800 500 853. This deduction can only be made for a maximum of five years after you move into the home.
When you leave the home, your bond, minus the retention amounts and other amounts agreed with the resident, must be repaid. The home must give you a written guarantee to repay the bond within a set period. If you give the home more than 14 days notice of your intended departure, the bond must be repaid on the day you leave. If you give 14 days or less notice, the bond must be repaid no more than 14 days after you give notice. If you do not give notice, the bond must be repaid within 14 days after you leave. In the case of death, the bond must be repaid no more than 14 days after the home is shown probate or letters of administration. The approved provider is not required to wait until probate or letters of administration are presented before refunding the accommodation bond. They can choose to refund the accommodation bond without such evidence. However, they are also compliant with the Act if they wish to see such evidence.
In the event your provider is unable to refund your bond because it is bankrupt or insolvent, the government will repay your bond balance entitlement, including any interest that has accrued on the bond balance.
Working out periodic payments
If you decide to pay some or your entire accommodation bond as periodic payments, the periodic payments will be made up of two parts. The first part is the retention amount that the provider can keep. After five years, this amount is no longer charged. The second part is an amount representing the interest the provider would normally receive on the lump sum. This amount would be paid indefinitely.
What if I move to another home?
If you move to another aged care home within 28 days of leaving the last home, to receive low level care or on an extra service basis and have paid an accommodation bond, the balance of your bond and any remaining retention periods transfers with you. If you transfer to high care in the same home, your bond will transfer with you. If you move from low care to high care in another home within 28 days of leaving the last home, you may, with the agreement of the new home, either:
- have the balance of your accommodation bond refunded and pay any accommodation charge due to the new home or
- transfer the balance of the bond, and any remaining retention period, to the new home.
If you move within 28 days the accommodation bond agreed at the new home cannot be more than the balance of the original amount. If you are out of permanent residential aged care for more than 28 days your eligibility to pay and the amount of any accommodation payment will be reassessed.
Does the amount of a lump-sum accommodation bond affect my pension?
No. All lump-sum accommodation bonds are exempt from the social security and DVA assets test. This is irrespective of when they were paid.
Does the amount of the accommodation bond I pay periodically affect my pension?
Bonds paid periodically are not included in your assets under the social security and DVA assets test.
What happens if I am paying my accommodation bond by periodic payments and renting out my house?
If you are paying some or all of an accommodation bond by periodic payments, and are renting out your former home, the rental income is exempt in full from the pension income test and for the assessment of your aged care fees.
Your former home is also exempt from the pension assets test for as long as you are liable to pay the periodic payment.
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Accommodation charges
An accommodation charge (the charge) is the daily amount you may be asked to pay if you require a high level care. It is fixed from the date you enter care and you cannot be asked to pay the charge more than a month in advance. By law, it must be used by the home to improve building standards and the quality and range of aged care services provided.
A charge can only be charged by an aged care home that is certified as meeting minimum building and care standards. You are entitled to know the home's certification status.
Not everyone can be asked to pay a charge. You will not be expected to pay a charge if you have assets of less than 2.5 times the single annual basic rate of the Age Pension. From 20 September 2009 this figure will reduce to 2.25 times the annual single basic pension.
How much accommodation charge do I have to pay?
If you first entered permanent residential care before 20 March 2008 and have not been out of care for 28 days or more, the amount of any charge is agreed on between you and your aged care provider. However, the government sets the maximum accommodation charge residents may be asked to pay.
If you first enter permanent residential care on or after 20 March 2008, the maximum amount of any charge you may be asked to pay is set by the Department of Health and Ageing based on the value of your assets at the time you entered care.
Agreeing the amount of your accommodation charge
You cannot be asked to pay an accommodation charge unless you have entered an agreement to do so. You have 21 days after entering an aged care home to do this.
The exact amount of the charge may not be contained within the agreement as this may not be known until after the 21 days has expired. If this is the case, your agreement must specify that the charge can be adjusted once the amount has been advised by the Department of Health and Ageing.
Setting the amount of your accommodation charge
The amount of an accommodation charge is calculated by the government depending on the assessed value of your assets. A resident who has assets that are equal to or less than 2.5 times the maximum age pension cannot be asked to pay an accommodation charge.* Residents with assets of more than the maximum threshold may be asked to pay the maximum charge. Residents with assets of between the upper and lower thresholds may be asked to pay a charge at a reduced rate.
* From 20 September 2009 this figure will reduce to 2.25 times the annual single basic pension.
Deferring accommodation charges
If your aged care home agrees, accommodation charges can be deferred and paid from the estate. Interest can be charged, at no more than double the lower pension deeming rate at the time you enter the home. For explanation of deeming rates see in the
'How deeming works' section.
What if I have moved from low care to high care?
If you move from low care to high care in the same home, your bond arrangements remain in place. That would mean you would not have to pay an accommodation charge.
What if I have moved from another aged care home?
If you move within 28 days as a high care resident from one aged care home where you paid the accommodation charge to another aged care home, your accommodation charge in the second aged care home cannot be higher than the charge you were paying in the previous aged care home.
If you have moved from an aged care home where you had paid an accommodation bond to another home where you will receive high level care, you may, with the agreement of the new home, either:
- have the balance of your accommodation bond refunded and pay any accommodation charge due to the new home or
- transfer the balance of the bond and of any remaining retention period to the new home.
If you choose to pay an accommodation charge in the new home you will need an Assets Assessment so the amount of your accommodation charge can be calculated.
If you are out of permanent residential care for more than 28 days, your eligibility to pay and the amount of any accommodation payment will be reassessed.
What happens if I am paying an accommodation charge and renting out my house?
If you are paying an accommodation charge by periodic payment and are renting out your former home, the rental income you receive is exempt from the pension income test. In these circumstances, your former home is also exempt from the pension assets test.
If you decide to stop paying by periodic payments these exemptions may no longer apply.