Aged care fee shambles?

CPSA1CPSA points out contradictions in Government’s new means test

“From 1 July 2014, aged care fees will change, but with just four weeks to go, the Department of Social Services and the My Aged Care helpline have failed to address a major anomaly in the aged care means test”, said Charmaine Crowe, Senior Advisor, Research & Advocacy.

“In the Government’s new double-dip means test, the money you need to pay for your accommodation charges is also counted in the calculation of your co-contribution towards your care fee. As a result, you’ll be asked to pay more for your accommodation and care than the Government’s own means test says you can afford.”

Let’s use the Government’s own example of Peter.[1] Peter enters a residential care facility on 10 July 2014. Peter has assets of $1,344,500 and an annual income of $65,000.

The Government works out his daily means-tested contribution (his capacity to pay) as $167.21 per day, of which $114.72 per day would go towards care costs. That leaves $52.49 for accommodation. Peter has high care needs so the full $114.72 goes towards his care costs.[2]

Except, Peter’s accommodation costs $100 per day. That brings Peter’s bill to $214.72 per day – $47.51 more than what he is means-tested as being able to pay.

“Despite CPSA’s best efforts over a period of months to get clarification, no one in the Department of Social Services or at the My Aged Care helpline could justify the new means test, except to say that people can negotiate a lower accommodation fee or apply for financial hardship.”

“However, in practice the cost of your care is worked out after you enter a nursing home, when you have signed on the dotted line and handed over the money to cover accommodation charges. Also, care costs typically increase over time due to higher needs. This means nursing home residents will risk eviction or downgrading of their accommodation over time.”

“This scenario won’t just apply to people with high wealth. It could potentially apply to any resident with assets over $199,179, which is a threshold easily crossed if you are single and sell your house on going into a nursing home.”

“CPSA calls on the Government to sort out this mess as a matter of urgency. Departmental and My Aged Care helpline staff at least need to be able to explain to people what they could expect to pay and how they will afford it.”

[1]Information Booklet on fees for home care packages and residential care:  http://www.dss.gov.au/our-responsibilities/ageing-and-aged-care/aged-care-reform/reforms-by-topic/information-booklet-on-fees-for-home-care-packages-and-residential-aged-care-for-people-entering-care p.19

[2] Peter won’t have to pay this care fee once he has paid $25,000 in care fees, which would happen after 217 days in care.

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