Day of aged care reform arrives

Those entering residential aged care from today (1 July 2014) will have their assets included in calculating the fees payable for living expenses and care.

From today, the distinction between high level and low level care will be removed, giving everyone the choice to pay their accommodation costs as a lump sum, a daily payment amount or a combination of both.

Consumers will also be able to select additional services for an extra daily fee in participating facilities. The reforms will cover both care in the community (Home Care Packages) and care in an aged care facility.

Importantly, the previous income tested care fee, which is based on assessable income, will be replaced with a means tested care fee, which will be based on assessable income and assets. For many, this will mean ongoing care fees will be higher if entering an aged care facility on or after today.

On top of the basic daily care fee, people might have to pay a means tested fee of up to $25,000 annually, based on income and assets. However, no one will pay more than $25,000 a year or a lifetime amount of $60,000 in means tested residential care fees.

A person’s ability to contribute towards the cost of a Home Care Package will be assessed based on your income. If a person’s assessable income exceeds $22,701 per annum (single) or $35,210 per annum (couple), they will need to contribute toward their home care package at the rate of 50 cents per dollar above these thresholds.

Adjunct Professor John Kelly, chief executive of aged care body, Aged and Community Services Australia (ACSA), claimed the reform process has been in train for a number of years and the aged care sector has been involved throughout. He said ACSA would keep a “close eye on” the changes to see the effects, especially in the first six to 12 months.

Today will also deliver the start of national disability insurance scheme trial sites in Western Australia, Northern Territory and the ACT, while the sites in NSW, Victoria, Tasmania and SA will expand.

Veterans are set to gain from higher indexation of the Defence Forces Retirement and Benefits schemes, while mature aged people out of work could benefit, with a payment of up to $10,000 available to employers who hire them and the superannuation guarantee rate will rise from 9.25% to 9.5%.

Better understand your payment options

With changes to the way Australian’s pay for aged care coming into effect as of today, aged care provider, Regis Aged Care, has taken the step of introducing an online payment calculator to its website.

The payment calculator is designed to assist those looking to enter care to better understand their payment options for the cost of their accommodation.

How do I use it?

Users simply have to place the advertised price of a room into the calculator and then use the slider option to see payment options for varying degrees of a lump sum Refundable Accommodation Deposit (RAD) combined with a Daily Accommodation Payment (DAP).

The payment calculator is for accommodation payment options only and users should be aware other fees and charges still apply. A full list of fees and charges can also be found on the Cost page of the Regis website.

“Whilst the payment calculator is an indicator only we hope this calculator goes a long way to assisting families to understand the new payment options for aged care in a simple and easy to use format,” Ross Johnston, Regis Aged Care chief executive, said.

“We strongly encourage those looking at aged care to visit their preferred facility and get a detailed quote based on their specific circumstances; this will take into account all fees and charges, so you can make an informed decision,” he added.

Find out more information on the 1 July 2014 aged care reforms and the effect it may have on consumers and providers.