Residential Care and Home Care Frequently Asked Questions
On this Page
- Existing residents and the aged care reforms
- RADs and DAPs
- Method of payment and contracts
- Means testing
- Annual and lifetime caps
- Administrative arrangements
- Means Not Disclosed
- Fees and Payments
- Home Care
- Residential Care - Higher Accommodation Supplement
Q: How will the new fee arrangements affect existing care recipients?
A: The changes to fees only apply to people entering aged care on or after 1 July 2014. In residential care, continuing residents will remain under their current fee arrangements unless they leave care for more than 28 days or move to a new facility and elect to be covered by the new arrangements.
The fees that can apply to existing pre 1 July 2014 home care recipients are unchanged from current arrangements. They will be covered by the new arrangements if they enter residential aged care.
Q: What happens if a pre-1 July resident transfers to a new facility after 1 July 2014?
A: Residents who are already in residential aged care prior to 1 July 2014 will not be subject to the new financial arrangements unless they choose to opt in when they change facility. This means bonds can be rolled over in the same way as in the current arrangements.
As per the current arrangements, the maximum amount the resident can pay the new facility is the amount left over after the retention amount has been subtracted from the accommodation bond. Both parties must agree to continue to roll over the bond.
If a resident chooses to opt in to the post 1 July 2014 arrangements, they will need to be assessed by the Department of Human Services (Centrelink) as a new entrant.
Residents who are already in residential aged care prior to 1 July 2014 will not be subject to the new financial arrangements unless they choose to opt in or they re-enter care after a break of 28 days.
Q: Do the annual and lifetime caps apply to continuing care recipients?
A: No. The annual and lifetime caps only apply to care recipients who entered care on or after 1 July 2014.
Q: What are all the things that we must allow a resident to draw down from the RAD?
A: There is no restriction on what a resident can draw down for. A service provider must allow a resident to draw down a DAP from their RAD. Any other draw downs for, e.g. payments associated with care or services, are to be negotiated between the provider and the resident.
Q: How long does a resident have to pay a RAD?
A: A resident has 28 days from the date they enter the facility to decide to pay a RAD. If they choose to pay a RAD, they have 6 months to pay. A resident must pay a DAP until the RAD is paid.
Q: How often do we need to recalculate the RAD if someone is drawing down DAPs from it?
A: Service providers and residents will need to agree how often they will recalculate as part of their accommodation agreement. The service provider cannot request a resident pay a DAP more than one month in advance.
Q: How do I calculate the DAP?
A: The formula used to calculate a DAP is:
Equivalent daily payment = (refundable deposit × maximum permissible interest rate)/365
Q: Can a provider charge a lower price than the one on the MyAgedCare site as the price?
A: Yes. A service provider can negotiate lower prices with a resident.
Q: Is a new resident allowed to agree to a payment option on admission or before admission, or MUST they wait 28 days?
A: Residents cannot elect their payment method before admission. Residents have up to 28 days to decide on a payment option and can make a decision at any time during this period – they do not have to wait the entire 28 days.
Q: If a resident chooses to wait 28 days before making a decision, do we charge the full applicable DAP until they make their choice?
Q: After 28 days, can a resident change their mind on how the accommodation is paid? If so, how much notice do they have to give?
A: If a resident is paying a DAP, they can decide to pay a RAD at any time. The DAP is charged and payable until the RAD has been paid to the service provider.
The service provider will need to agree to any change in payment options if a resident has paid a RAD and wishes to pay a DAP.
Q: How is the principal residence assessed under the new means assessment?
A: Consistent with current arrangements the principal residence will be exempt from the means assessment if occupied by a spouse or other protected person.
If the home is not occupied by a protected person the value of the home up to a capped amount will be included in the assets test.
Q: How frequently will assets and income be assessed?
A: Unlike current arrangements, changes in both income and assets will result in changes to the means-tested care fee and/or the accommodation contribution paid by residents who receive government support with their accommodation.
Centrelink and the Department of Veteran’s Affairs (DVA) will use the information they collect for income support payment purposes to update a resident’s income and assets for aged care purposes. Consistent with current arrangements this would include the resident advising when there are significant changes to assets.
A self-funded retiree should advise Centrelink of any changes in their circumstances.
Q: What is the period the annual cap is measured over?
A: The annual caps are set over a start-date year. The start date is the date the care recipient first entered aged care, including pre-entry leave, either in home care or residential care. A start date year is the year between that date and the anniversary of that date. For example, if someone enters home care on 14 July 2014, that will be their start date, regardless of when they later enter an aged care home.
Q: Do the annual and lifetime caps move with a care recipient when they change to a different provider?
The annual cap follows a care recipient as they move between providers, services and care types. Centrelink will monitor the caps and advise the person and their provider once a cap has been met.
Means tested resident care and income tested home care fees accrue against a person’s lifetime cap from the date of their first entry into home or residential care after 1 July 2014.
For more information on how the caps apply see the detailed Information Booklet: Fees for Home Care Packages and Residential Aged Care for people entering care from 1 July 2014.
Q: How will a provider know the balances of a care recipient’s annual and lifetime caps?
A: Centrelink will advise a consumer and their provider when the recipient has reached their annual or lifetime caps. Once the cap is reached, the Australian Government will pay the means-tested or income-tested care fees through subsidy payments to the provider and the consumer will pay the basic daily fee and/or any accommodation costs.
Q: What information should providers collect from care recipients? Who should the provider send that information to (either to Centrelink, the Australian Taxation Office, or the Department of Social Services)?
A: As is the case now, a provider does not need to collect financial information from the resident. Completed assessment application forms should be sent by the resident or person assisting them to Centrelink or DVA.
Q: What information will the providers need to supply with the RAD and DAP details to DSS in order to allow monitoring of impacts?
A: The Aged Care Financing Authority (ACFA) has been asked by Government to monitor the impact of the reforms. ACFA is engaging with the key industry associations to determine what information could be provided to assist the monitoring task. The Aged Care Entry Record that providers send to Centrelink will also include information on accommodation prices and RAD/DAP choices.
Q: Does a provider have to notify Centrelink about anything to do with a resident and the RAD/ DAP or care fee?
A: A provider will need to complete an Aged Care Entry Record for each new resident on entry. The Aged Care Entry Record includes details on the agreed price and the resident’s elected method of payment. If the resident has not chosen their method of payment at the time the Aged Care Entry Record is first due to be submitted, these details will need to be updated once known and re-submitted by the service provider.
Q: Will aged care providers be told what the maximum care contributions and accommodation contributions will be for care recipients?
A: Yes. Centrelink will calculate the fees and charges payable and notify the resident and provider of any fees that can be charged. Centrelink will also advise whether the resident is liable to pay an accommodation payment, agreed with the home, and if the resident is to receive a full or partial government accommodation supplement. Some people may need to make no or only a limited accommodation contribution.
Q: How does a provider ensure that the resident has the means to pay a RAD?
A: These arrangements do not change from what they currently are for payment of bonds.
Q: Will there be new forms from 1 July?
A: From 1 July 2014, there will be new Aged Care Entry Record forms. The new forms can be used for both residential and home care information. For residential care they will include details on the agreed price and the resident’s elected method of payment if known. If the resident has not chosen their method of payment at the time the Aged Care Entry Record is submitted, these details will be updated later by the service provider.
Q: Can a resident refuse to have their means assessed by Centrelink?
A: Yes. A resident who refuses to have their income and assets assessed will not be eligible for government assistance with their fees and accommodation. Centrelink will write to residents seeking income and asset information. If information is not provided, the resident can be asked to pay the maximum mean tested care fees based on the cost of their care and an accommodation payment agreed with the home.
Q: Which government subsidies will be paid for a care recipient who enters aged care without a valid means assessment?
A: Residents will be allowed a set period of time after entry to request a combined asset and income assessment from Centrelink. Consistent with the current arrangements, prior to the finalisation of an ACFI appraisal, a pre-ACFI subsidy will be paid. Once an ACFI determination has been finalised this will be adjusted to reflect the ACFI determined subsidy. Where a person does not disclose their means after 2 requests from Centrelink they will be considered a Means Not Disclosed resident and liable to pay maximum means tested care fees and their subsidies will be adjusted accordingly. This is consistent with current processes.
Q: What means tested care fees does a resident pay if they have a status of ‘means not disclosed?’
A: A resident who has not disclosed their income and assets to Centrelink, can be asked to pay the full cost of their care. That is the amount determined by their basic subsidy and primary supplements.
The resident can also be asked to pay the accommodation payment agreed with the provider prior to entry.
Q: Does the annual cap apply to a resident with a means not disclosed status?
A: Yes. Once a resident has paid means tested care fees up to the annual cap of $25,000, they cannot be asked to pay anymore means tested care fees for the remainder of the year. The Government will pay the subsidy to the provider for the remainder of the year.
Q: What subsidy will a provider receive if the resident has not had an ACFI?
A: If the ACFI has not been completed, then the interim subsidy amount will apply. The interim subsidy amount will be set by Ministerial Determination before July 2014.
Q: Can I charge a resident a means tested care fee if they have not received advice on the amount of means tested care fee payable from Centrelink?
A: While the means tested care fee is unknown, a provider may wish to consider charging an interim fee up to the resident’s care costs. The provider should discuss with the resident what would be a reasonable charge, taking into account the resident’s financial circumstances. Any overpaid amounts will need to be refunded to the resident once the formal assessment by Centrelink has been completed.
Q: What subsidies can a provider receive for a resident who does not yet have a status of ‘means not disclosed’ and how will it change once the resident’s status changes to ‘means not disclosed?’
A: If the resident has entered care without having their income and assets assessed, Centrelink will give a resident a period of time to submit their income and asset information to Centrelink. Centrelink will notify the provider that the resident has not supplied their income and asset information. Centrelink will also contact the care recipient asking him or her to supply this information.
During this time, the provider will receive an interim subsidy prior to the ACFI being completed. Once the ACFI is completed, the provider will be paid the full subsidy based on the person’s care costs.
If the resident does not provide income and asset information within the required timeframe, Centrelink will inform the resident and provider that the care recipient’s means tested care fee is the cost of their care.
Centrelink will deduct subsidy amounts already paid from future payments to the provider.
Q: How will the amount of accommodation supplement be calculated for new entrants from 1 July 2014?
A: Centrelink will undertake a means test covering both income and assets to determine how much of a contribution to their accommodation a resident who is entitled to government support will be required to pay.
The resident’s accommodation contribution will either be the means tested amount or the maximum accommodation supplement for the facility, whichever is lower.
The amount of accommodation supplement payable will be the difference between the resident’s accommodation contribution and the maximum accommodation supplement payable to the facility.
Q: If a person's assets increase after they have entered care, can they be asked to pay an accommodation payment if they were previously eligible for government help with their accommodation costs?
A: No. A resident's income and assets at entry determines whether they can be asked to pay an accommodation payment agreed with the aged care home. A person who, at entry, was eligible for some government assistance with their accommodation costs can only be asked to make an accommodation contribution determined by Centrelink (supported by a government accommodation supplement). They cannot later be asked to pay an accommodation payment as agreed with the home in the same facility. If a person's assets or income change after entry it will only be the amount of means tested care fee and accommodation contribution payable which will change, and Centrelink will advise the resident and provider of any change.
Q: What is the administrative process for assessing income?
A: In Home Care, the amount of income tested care fee payable is determined by the consumer’s income. Similar to the current process in residential care, Centrelink or DVA will assess a person’s income. Centrelink will calculate the amount of income tested fee payable and notify the care recipient and provider. The Government will reduce its subsidy based on the amount of income tested fee payable.
Consumers on an income support payment need not submit an income assessment form, as Centrelink and DVA will already have access to this information.
Self-funded retirees who do not receive income support from Centrelink or DVA will need to submit an income assessment form, or will be assessed to pay the maximum fee payable.
Q: How will the collection of fees work in home care?
A: Providers can determine their own collection process as they currently do for basic daily fees. Providers cannot charge fees more than one month in advance.
Centrelink will notify the provider and care recipient of the maximum income tested care fee and basic daily fee payable, it is up to the provider whether they charge a care recipient the maximum amount or a lower amount.
Q: What happens if a consumer is having trouble paying their fees?
A: The consumer can apply for financial hardship assistance through Centrelink.
Caps in home care
Q: How are the annual caps applied in home care?
A: There are two annual caps that may apply in home care. These are applied at a daily rate:
- The income tested care fees for a consumer who is on income equivalent to a part pensioner ($47,882 and below) will be capped at $5,000 a year, which is equivalent to $13.74 per day (March 2014 rates).
- The income tested care fee for a consumer who is on income equivalent to a self-funded retiree (more than $47,882) will be capped at $10,000 a year, which is equivalent to $27.47 per day (March 2014 rates).
Centrelink takes these caps into account when determining the daily fees that can be charged.
FAQs are available on the higher accommodation supplement Frequently Asked Questions page.