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Neither the Aged Care Income Assessment (for determining an Income Tested Care Fee in Home Care) or the Combined Income and Assets Assessment (for determining someone’s ability to contribute towards the cost of Residential Aged Care) are compulsory. People who choose not to submit an assessment are referred to as “Means Not Disclosed” and can be charged their cost of care.
Loans from family to fund a RAD have impacts on the cost of care and potentially estate planning. The Aged Care Act 1997 does not preclude a family member of a resident making a contribution towards their accommodation payment. However, an aged care provider must not accept a lump sum payment which would leave the resident with less than the minimum permissible asset level within 28 days of entry and the provider has sufficient information to know the person’s means.
Reverse mortgages, also known as 'equity unlock loans' are equity release loans designed for older borrowers including those entering aged care, who are 'asset rich' but 'cash poor'. They enable the borrower to access the equity in their home. The borrowed funds can generally be taken out as a lump sum, a regular income stream or a combination of both.