New Arrangements for Aged Care

This publication is meant for residents who were in residential aged care on 30 June 2014 and intend to move to a new aged care facility. If you are outside of care, other than on approved leave, for more than 28 days after leaving your former aged care home, you are automatically subject to the fee and payment arrangements that came into place on 1 July 2014 when you later re-enter care.

If you are outside of care for 28 days or less, your fee and payment arrangements will continue to be calculated under the arrangements in place on 30 June 2014. You also have the option of choosing to have your fees and payments calculated under the new arrangements from 1 July 2014. If you choose to be covered by the new arrangements, you cannot later decide to return to your existing arrangements.

From 1 July 2014 residents can be asked to pay a basic daily fee, a means-tested care fee, an accommodation payment, and fees for extra or additional optional services.

The basic daily fee covers living costs such as meals, power and laundry. Everyone can be asked to pay this fee. The means-tested care fee is an additional contribution towards the cost of care that some people may be required to pay, based on an assessment of both income and assets.

An accommodation payment is for your accommodation in the home. Some people will have accommodation costs met in full or part by the Australian Government, while others will need to pay the accommodation price agreed with My Aged Care and the aged care home. Additional fees may apply if you choose a higher standard of accommodation or additional services.

Everyone can be asked to pay the basic daily fee. Under the new arrangements, a person’s means-tested care fee is determined on both income and assets. Under the pre 1 July 2014 arrangements this fee was based only on income.

Under the new arrangements there is an annual cap of $25,000 on means-tested care fees and a lifetime cap of $60,000 covering both means-tested care fees in residential care and income-tested care fees in home care.

A person’s eligibility for assistance with accommodation costs is determined based on both income and assets. If you are not eligible for assistance, you will pay an accommodation price agreed with the provider, who is required to publish prices on the My Aged Care website. You may choose to pay as a lump sum, regular rental-style payment, or a combination of both.

Opting in to the new arrangements may result in a change to the fees you pay. The new means testing arrangements consider both income and assets in determining a person’s capacity to contribute to the cost of care and accommodation.

You may wish to obtain financial advice when considering whether to remain under your current arrangements or opt in to the new arrangements commencing 1 July 2014. My Aged Care can be contacted on 1800 200 422.

More information about the new fees and payment arrangements is available on the My Aged Care website and the Department of Social Services website. A Residential Care Fee Estimator is also available on the My Aged Care website.

The fee estimator provides an indication of the fees and charges you may be asked to pay based on information you enter at the time. Your actual fees and charges will depend on the Department of Human Services assessment of your income and assets.

If you are entering a new residential care home more than 28 days since leaving your previous residential care home, your fees will automatically be calculated under the new arrangements described above.

If you are entering within 28 days and wish to remain subject to the pre 1 July 2014 arrangements, your fees and payments will continue under the arrangements that previously applied to you. You do not need to do anything to make this happen.

If you wish to opt in to the new post 1 July 2014 arrangements, you will need to complete an opt-in form and give it to your new provider before moving into the new aged care home. Your provider can give you a copy of this form, or it is available from the Department of Human Services website.

If you opt in, you will need to have your income and assets assessed to determine eligibility for government assistance with accommodation costs and care fees. Without an assessment, you can be asked to pay the full cost of care and receive no assistance with accommodation costs. Financial advice may be of assistance when considering whether to opt in.