Aged Care changes from 1 July 2014
As part of a ten (10) year reform plan which commenced in July 2013, a number of changes to aged care funding and service arrangements will take place from 1 July 2014. Existing residents in care on 30 June 2014 will continue under their current arrangements unless they move between services and elect to have the new rules apply.
Funding arrangements vary according to the level of care.
Home care
-
Consumers will be subject to an income test
-
Full aged pension recipients will not pay any fee
-
Part aged pension recipients’ fees will be capped at $5,000 p.a.
-
Self-funded retirees will pay a maximum of $10,000 p.a.
-
There will be a lifetime cap of $60,000 on income - tested fees
-
The daily care fee will be 17.5% of the basic age pension and consumers may also pay an income-tested fee
Residential care
-
The distinction between “low care” and “high care” will be removed
-
The basic daily care fee is up to 85% of the single basic age pension
-
Consumers will be subject to a combined income and assets test and the fee will be based on a combination of income and assets calculations
-
A means-tested fee may apply in addition to a basic daily care fee for consumers other than full aged care pension recipients
-
A reduction based on a sliding scale will apply – this is called the care subsidy amount
-
Means-tested care fees will be capped at $25,000 p.a. and a lifetime cap of $60,000 will apply
-
In calculating the applicable assets the value of the home is capped at $144,500
-
Consumers will have a choice of paying for accommodation via a fully refundable lump sum, periodic payments or a combination of both
Other changes
-
The Government will set a maximum accommodation payment that can be charged
-
The Aged Care Pricing Commission and an Aged Care Financing Authority will be established to set and monitor fees and charges including the accommodation payment
-
An independent review of the reforms will be conducted in 2016 and reported on to Parliament by 30 June 2017
-
In the event a provider becomes insolvent and is unable to refund an accommodation bond when a consumer leaves aged care, the Government guarantees to repay the outstanding balance. The guarantee will be funded by a levy on all aged care providers.
Further clarity will come when the changes have been legislated and the rules are in operation. The “Living Longer, Living Better” website answers many questions and a downloadable document gives worked examples of how fees will be calculated.
Sources;
Department of Health and Aging – www.livinglongerlivingbetter.gov.au
Copyright ClientComm 2014