The findings of the Aged Care Royal Commission were handed down way back in 2021.
We are now about to see aged care – how it is funded and who pays for it – redefined in “once in a generation” changes to take place this year.
What does it mean to you and your family?
This article will focus on residential aged care and my next article will turn its attention to home care.
The overarching Government focus doesn’t change – they aim to ensure aged care is available for everyone.
When it comes to moving into a residential care facility, if you (currently) have assets over $206,039, you will still be responsible for paying the market price (think RAD and DAP in aged care speak) for your accommodation.
There is no-change to the means-testing of the family home – it’s included up to the capped value of (currently) $206,039 unless a “protected person” remains living in the home, in which case the home is exempt.
The refundable accommodation deposit (RAD) cap increased from $550,000 to $750,000 on 1 January this year. The cap is simply the amount a facility can charge for a room without obtaining Government approval. Does a rising tide lift all boats? It appears the case in aged care with room prices increasing around the country since 1 January.
RAD’s are currently returned in full less any outstanding costs when someone voluntarily or involuntarily leaves the facility. From 1 July this year, facilities will charge an exit fee of 2% per year of your RAD paid for up to 5 years. For example, if you paid a RAD of $750,000 - $75,000 will be deducted when you leave after 5 years.
People who choose to pay by daily accommodation payment (DAP) will have their fee indexed at the-then CPI rate twice a year, rather than the current fixed rate.
Everyone will still pay a basic daily fee regardless of your financial means.
Beyond this you will pay a hotelling supplement and a capped non-clinical care contribution based on your assets and income, and a higher everyday living fee if you choose to get “extras”.
When it comes to the ongoing cost of your aged care, the Government will pay for clinical care.
If you are a current resident, or have family who are in a residential care facilitiy, they will be protected under the "no worse off" principle. This will ensure current facility residents won't see their costs increase.
The Government estimates that about 30% of full-pensioners and 75% of part-pensioners may face higher costs. While it’s been communicated that wealthier Australians will pay more for aged care, it seems that the reality will be most Australians will pay more – in some cases, much more.
How Family Aged Care Advocates (FACA) work
Family Aged Care Advocates guide you and your family through this ever-changing aged care maze so you can clearly understand what all these changes exactly mean for your particular situation. Mistakes or misunderstandings can be costly and time-consuming to fix. Feel free to visit FACA at www.familyagedcareadvocates.com.au or call Shane Hayes on 0411 264 002.
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