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2014 Aged Care Changes

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The world of Aged Care is changing. As you may be aware, the Government’s proposed ‘Living Longer, Living Better – aged care reform package’ will turn our existing aged care system on its head. The changes are to be introduced from July 2014.

Whilst a lot of information has already been released, we are still waiting on the final legislation; due in April 2014.

To assist you in understanding some of the major changes to occur in Residential Aged Care, we have provided a summary below. Many of our clients are now facing the challenges of placing parents in Aged Care and we specialise in providing advice in this complex area. To read on please click on the heading above.

If you would like any further information on the topics discussed, please do not hesitate to contact our office and talk to Aged Care specialist Melinda Planken.

Accommodation Payment

This payment will replace the Bond which currently applies for people entering Low care. However after the removal of Low and High care categories, this payment will apply to ALL residents. In a similar way to the current bond, the payment will be means tested and subject to asset thresholds.

The payment will be divided into three levels, based on the facility’s charges.

  • Level 1– $0-$50 per day, or a lump sum Refundable Accommodation Deposit equivalent of $238,845
  • Level 2– $50-$85 per day, or a lump sum Refundable Accommodation Deposit of $406,037
  • Level 3– Over $85 per day.

All approved providers will be required to publish their accommodation prices. Level 3 providers must be pre-approved by Government Authority to charge above Level 2 rates.

Residents will have the ability to make the payment as a daily fee (Daily Accommodation payment), lump sum (Refundable Accommodation Deposit) or a combination of both. They will have up to 28 days to determine their preferred payment option.

Unlike the current Bond, no retention amount will be taken from the Refundable Accommodation Deposit.

These rule changes will also mean the removal of ‘bonus’ bonds as facilities must adhere to published prices.


Daily Care Fee

The Daily Care fee will continue to reflect 85% of the single basic Age Pension and will be indexed twice yearly.

Extra Service facilities can continue to charge an Extra Service Fee based on the additional extras provided. This additional fee will be determined by the specific facility.


Means Tested Fee

Similar to what we currently know as the Income Tested Fee, a new Means Tested Fee will be determined via both the Income and Asset tests. Thresholds will apply and the care recipient’s home will have a capped asset value of $144,500, unless exempt. The applicable thresholds are expected to be indexed in March and September, as with current fees.

The Means Tested Fee for residents will be capped at $25,000 annually and $60,000 in a lifetime. The annual period is determined from the anniversary date of entering care, not by calendar year.


Determining the value of assets

The value of a person’s assets continues to exclude;

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  • A person’s home; provided their spouse continues to reside there or a protected person, such as a carer, in receipt of a Centrelink income support payment, has lived there for 2 or more years.
  • Gifts and pre paid funerals within the allowable thresholds.
  • Complying Income Streams purchased prior to 20/09/2007.
  • If the home is assessable, then for the purpose of the Means Tested Fee it will be assessed at $144,500. The value of the home that exceeds this sum is ignored. However the Accommodation Payment is calculated by using the full value of the home.




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