Residential care
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Residential care
Many mainstream residential aged care homes (for example, hostels and nursing homes) receive funding from the Australian Government. To live in one of these homes permanently, you will need to be assessed by an Aged Care Assessment Team to see whether you need either a high level or a low level of care.
If you live in an Australian Government subsidised aged care home, you may need to pay:
- an accommodation payment
- a basic daily care fee
- an income tested daily fee
- an additional fee if you are in an 'extra service place'.
An 'extra service place' is where the home provides you with a higher standard of accommodation and services, which will cost you more. Extra service does not mean you will be provided with a higher level of care. The extra amount you pay for an extra service place varies from home to home.
Note: Some of the rules regarding aged care fees and accommodation payments may be different for residents who are moving from one residential aged care service to another when compared to the rules that apply to new residents entering aged care. To find out more about the different costs that aged care residents may need to pay, telephone the Aged Care Information line at the Department of Health and Ageing on Freecall™1800 500 853.
Accommodation payments
There are 2 different types of accommodation payments, accommodation bonds and accommodation charges. Accommodation bonds are usually paid as a lump sum amount but they can also be paid in part or in full by periodic payments. Lump sum accommodation bonds are exempt assets for social security purposes. Accommodation charges are paid as a daily amount only.
The type of accommodation payment paid by new residents is based on both the level of care required at the time of entry to the aged care home and whether it is an extra service place.
If you need high level care you may need to pay an accommodation charge. If you need low level care, or are going into an extra service place, then you may need to pay an accommodation bond.
The amount of the accommodation payment depends on the value of your assets. Members of a couple are each considered to have half of the combined assets of both partners.
Since 1 July 2005 the value of assets for accommodation payment purposes has been assessed by Centrelink on behalf of the Department of Health and Ageing if you receive a social security payment or you are a self funded retiree. This assessment and how it is worked out may be different from the way Centrelink works out asset values for social security purposes.
One of the main differences is that the value of a customer's home is counted as an asset for aged care accommodation payment purposes unless at the relevant time the customer's:
- partner or dependent child/student lives in it, or
- carer who is eligible to receive an Australian income support payment has been living in it for the past 2 years, or
- close relative who is eligible to receive an Australian income support payment has been living in it for the past 5 years.
To find out more about accommodation bonds and accommodation charges or to obtain an application form for a residential care assets assessment, telephone the Aged Care Information line at the Department of Health and Ageing on Freecall™1800 500 853.
For more information about Centrelink's residential care assets assessments telephone Freecall™1800 227 475.
People receiving a Department of Veterans' Affairs means tested pension should contact the Department of Veterans' Affairs about residential care income and assets assessments and about how moving into an aged care home can affect their payment.
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Basic daily care fee
Basic daily care fees are for living expenses like meals, laundry, heating/cooling, and also your nursing or personal care. You can find out more about basic daily care fees from the Department of Health and Ageing.
Income tested daily fee
You may also have to pay an income tested daily fee to your care service provider. You usually only have to pay this if you are a part-pensioner or a non-pensioner.
Note: If you are a non-income tested pensioner such as an age (blind) pensioner, and you have income above the pension income free threshold, you might also have to pay this income tested daily fee.
Even if you don't get a pension, how much you have to pay is based on your assessed income which is different to taxable income. If you are a member of a couple you will be assessed as having half of the combined income of both you and your partner. The assessment of income for aged care purposes is done in a similar way to how Centrelink works out income for social security purposes and includes the calculation of deemed income on financial assets and on money or assets gifted within the last 5 years.
Centrelink assesses residents' income on behalf of the Department of Health and Ageing for both pensioners and non-pensioners. The Department of Veterans' Affairs assesses the income of people receiving a service pension or an income support supplement.
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Payments affected by moving into an aged care home
If you receive a payment from Centrelink and you have a change in your circumstances, for example if you move into a residential aged care home or if you sell, gift away or rent out your home, you need to let Centrelink know within 14 days in case it affects your payment.
Many customers will keep on getting the same amount of pension when they move into an aged care home. However, in most cases rent assistance will no longer be paid. If you are a member of a couple, under a special rule called 'separated due to ill health', you may get a higher rate of pension.
A customer's home is exempt from the pension assets test while they live in it and it remains exempt for 2 years after they leave it to enter a care situation such as an aged care home. The date that the 2-year exemption period commences can vary if the customer is, or was, a member of a couple at the time that they entered the aged care home. However, unless an additional exemption such as the one outlined below applies, once the 2-year exemption period has ended the value of the customer's former home will be counted as an asset for the pension assets test and this can affect the rate of pension that is or may otherwise be payable.
Renting your home
If you are paying either an accommodation charge or an accommodation bond by periodic payments and at the same time you are renting out your former home that you left to enter care:
- the rental income from the former home is exempt in full for both the pension income test and aged care fees, and
- the value of the home is exempt from the pension assets test.
For more information about the income assessment for residential care fees telephone Centrelink on Freecall™1800 227 475.
To find out more about the cost of residential care, telephone the Aged Care Information line at the Department of Health and Ageing on Freecall™1800 500 853.
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