Accommodation Costs

Paying for Residential Care

It is important to note when comparing the different Aged Care facilities that all fees are set by the Australian Government, and will be the same from metropolitan to country areas, and from state to state.
The only exception is the price of your room, for Residents who are not supported by the Government. Room costs are determined by the Aged Care Facility, and are usually similar across facilities in a particular area.

Means Testing

From 01 July 2014, all Residents considering entry into Residential care, will be required to have their assets and income assessed, to determine whether the Government will contribute to their costs of accommodation.

You must complete and lodge an Asset and Income Assessment, even if you are receiving an aged or service pension. Residents contemplating entry into Residential care, are encouraged to lodge their Asset & Income Assessment prior to entering care, as processing can take more than 4 weeks. Asset & Income Assessments are usually valid for 120 days from issue. Most Aged Care facilities will not admit a Resident to Residential care until the Asset & Income Assessment is provided.

Means testing will determine whether the Resident is classified as:
• A Low Means Resident
• A Partially Supported Resident
• An Unsupported Resident

Means Tested Fee Formula

Centrelink or Department of Veterans Affairs will calculate your means tested fees based on the Asset & Income Assessment lodged by the Resident.

The following will be considered in calculating the Means Tested Amount

• Any investments you have will be expected to earn a commercial rate of return, not what you might be earning.

For example; If you had an investment property occupied by Family members rent free, you would be assessed on what is the going rate for rent in the area.

• If your Family home is occupied by a Protected Person, the value of the property will not be included in your assessable assets.

• If the house is not occupied by a Protected Person, then only the first $162,815 (as at 20.09.2017) of the value of the house will be include in your asset assessment.

• If you are a member of a couple, half of your combined income & assets are used, to determine your Means Tested Care Fee, regardless of which partner earns the income, or owns the asset.

Asset Tested Amount

a) The first $47,500 of assets is not included.
b) 17% of assets between $47,500 and $162,815
c) 1% of assets between $162,815 & $393.446
d) 2% of assets above $393.446
i. Divide the total of b), c) & d) by 364, then deduct the accommodation Supplement $55.44 = MTF

Income Tested Amount

a) Total assessed income.
b) 50% of the assessed income over $26,327 (as at 20.09.2017)
ii. Divide b) by 364 = daily fee $xx.xx

Annual & Lifetime Caps on Means Tested Fees

There are annual & lifetime caps that apply to Means Tested Fees for Aged Care Residents. Once these caps are reached you will not be required to pay any further Means Tested Fees, and the Government will pay the fee on behalf of the Resident to the Aged Care Facility.

The maximum Means Tested Fee you can be asked to pay in any one year (Annual Cap), is $26,566 as at 20.09.2017. This amount is indexed and increases each year. Once the Annual Cap is reached, you make no further Means Tested Fee payments until the anniversary date of your entry into the Facility.

The maximum Means Tested Fee you can be asked to pay in your lifetime (Lifetime Cap), is $63,760 as at 20.09.2017. This amount is indexed and increases each year. Once the Lifetime Cap is reached, you make no further Means Tested Fee payments during your stay in Residential care. Any Means Tested Fee amounts paid by a Resident towards a Government funded home care package, will count towards the Annual & Lifetime caps.

Means Not Disclosed

The requirement to provide an Assets & Income Assessment is not compulsory, but if it is not provided you will not be eligible for any Government assistance towards your Aged Care costs. A Resident who does not provide an Assets & Income Assessment will be required to pay the maximum Means Tested Fee, based on the costs of their care. (The ACFI funding the Government will pay to the Facility) The amount you have to pay as a Means Tested Fee, will depend on the level of care you require, and the amount the Government agrees to fund for your care. The amount won’t be determined until the Resident has been at the Facility for 2-4 weeks.

Typically a low level care Resident may be funded for $60.00 per day, and a high level care Resident by $210.00 per day. The Annual Cap and the Lifetime Cap applies to any Means Tested Fees paid.

Low Means Resident

Low Means Residents will pay the Basic Daily Care Fee of $49.42 per day as at 20.09.2017. This fee covers living costs such as meals, power, heating, cooling, cleaning, laundry etc. The Basic Daily Care Fee is set by the Government at 85% of a single aged pension, and is indexed on 20 March & 20 September each year in line with changes to the Aged Pension. All Residents pay the same Basic Daily Care Fee regardless of their assets & income. From 20.09.2017 till 19.03.2018, the Basic Daily Care Fee is $49.42 or 85% of a single aged pension excluding supplements ($814.00 per fortnight) or $49.42 per day.

Residents with assets under $162,815 as at 20.09.2017, may be classified as a Low Means Resident. Residents with assets less than $47,500 as at 20.09.2017, will not be expected to pay any contribution to their accommodation, and will be fully supported by the Government.

Residents with assets above $47,500 as at 20.09.2017, and less than $162,815 as at 20.09.2017, will be considered to be a Partially Supported Resident. Partially Supported Residents may have to pay an accommodation contribution, but do not pay Means Tested Fees or Accommodation Payments.

The maximum accommodation contribution paid by a Partially Supported Resident is $55.44 per day, as at 20.09.2017. The Resident is able to pay their accommodation contribution as a daily fee (DAC) or a lump sum (RAC = daily fee grossed up). In most cases the Resident would be unable to fund the accommodation contribution by RAC as they would have insufficient assets.

Unsupported Resident

All Residents who are not Low Means Residents, are referred to as Unsupported Residents. Unsupported Residents will pay the Basic Daily Care Fee of $49.42 per day as at 20.09.2017. This fee covers living costs such as meals, power, heating, cooling, cleaning, laundry etc.

The Basic Daily Care Fee is set by the Government at 85% of a single aged pension, not including supplements, ($814.00 per fortnight as at 20.09.2017) and is indexed on 20 March & 20 September each year in line with changes to the Aged Pension. All Residents pay the same Basic Daily Care Fee regardless of their assets & income.

Means Tested Fee

This is an additional cost towards the cost of care that some Unsupported Residents may be required to pay. The Department of Human Services (Centrelink) or Department of Veterans Affairs (DVA) will work out if you are required to pay a Means Tested Fee based on the assessment of your assets & income.
Refer to section Means Testing above.

An Accommodation Payment

Unsupported Residents entering Residential care after 01 July 2014, are now required to provide the Aged Care Facility with a copy of their Asset & Income Assessment, and agree on the amount of any Accommodation Payment, prior to entering the Facility. Each Aged Care Facility is required to publish the maximum Accommodation payment for each room within their Facility, on their website & on the Governments My Aged Care website. Rooms of different quality can have different prices. The Aged Care Facility can set the maximum amount of Accommodation Payment for each room.

Manor Court’s maximum Accommodation Payment is negotiable upto $550,000. (as at 01.06.2017).

The maximum Accommodation Payment that can be charged by a Facility is $550,000, and any amount above that requires specific approval by the Government Prices Commissioner. Once the Accommodation Payment is agreed between the Resident & the Facility, the equivalent Daily Accommodation Payment (DAP) will be payable from the day of entry to the Facility.

To calculate the DAP follow this example.
• Agreed Accommodation Payment of $400,000
• Maximum Permissible Interest Rate for the period 01.01.2018
to 31.03.2018 = 5.72%
• $400,000 x 5.72% divide by 365 = $62.68 per day
At any time during the first 28 days of occupancy, the Resident will have a choice of choosing how they intend to pay there Accommodation Payments.

The options are:
a) Daily Accommodation Payment (DAP)
b) Refundable Accommodation Deposit (RAD)
c) Or a combination of a) & b) above
In determining the amount of a RAD to be paid, the Resident must be left with a minimum of $47,500 of assets (as at 20.03.2017) which is based on 2.5 times the single pension. This doesn’t apply to Residents paying a DAP.

Example 1
Mrs Brown agrees to enter the Facility on 01.04.2017, and agrees to the payment of an Accommodation Payment of $350,000. On 15.04.2017 Mrs Brown agrees to pay $200,000 as a RAD and $150,000 as a DAP, and gives the Facility a cheque for $200,000.
• From 01.04.2017 till 15.04.2017 – DAP of $55.42 day is payable
• From 16.04.2017 until the Resident departs, the DAP reduces to $25.75 day ($150,000 x 5.78% divide by 365)
Example 2
Mr White agrees to enter the Facility on 01.07.2016, and agrees to the payment of an Accommodation Payment of $250,000. On 28.07.2016 Mr White agrees to pay $250,000 as a RAD, and lists his house for sale. On 15.01.2017 after sale of the house, Mr White gives the Facility a cheque for $250,000.
• From 01.07.2017 till 15.01.2017 – DAP of $41.16 day is payable. ($250,000 x 6.01% divide 365)
• From 15.01.2017 the DAP ceases

Example 3
Mrs Green agrees to enter the Facility on 01.01.2017, and agrees to the payment of an Accommodation Payment of $400,000. On 28.07.2016 Mrs Green agrees to pay $400,000 as a DAP.
• From 01.01.2017 till 28.01.2017 – DAP of $63.12 day is payable. ($400,000 x 5.76% divide 365)
• From 28.01.2017 the DAP stays at $63.12 per day
Refundable Accommodation Deposits (RAD) RAD’s are required to be refunded to the estate of deceased Residents, no more than 14 days after receipt of Grant of
Probate or Letters of Administration. If a Resident chooses to transfer to another Facility, Manor Court will require 14 days prior notice of the date of departure. In this
case the RAD will be transferred on the date of departure. If a Resident chooses to transfer to another Facility, and we are not provided with 14 days’ notice, Manor Court will transfer the RAD 14 days after we cease to provide services to the Resident.