Retirement villages are generally built as a group of units or villas with entry restricted to people who are over 55 and retired from full-time employment. Retirement Villages operate under the relevant state or territory legislation, often called the Retirement Villages Act.
For people who enter residential aged care after 1 July 2014 a means tested amount is used to determine how much they can pay for accommodation and care.
Aged Care Providers are required to refund the balance of a resident’s Refundable Accommodation Deposit/Contribution or Accommodation Bond within legislated timeframes.
Prior to 1 July 2014 Residential Aged Care was categorised into three types; Low Care, High Care and Extra Services. A different financial arrangement applied to each and while some facilities offered only one type of care others had more than one — and perhaps all 3 — in the same facility.
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.
While the NDIS continues to be rolled out across Australia until 2020 young people living in aged care may find themselves as “dual participants” – living in aged care and able to access NDIS funding.
The Means Tested Care Fee applies to residents who enter aged care after 1 July 2014, including Low Means residents when they have a change of circumstances.
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 to an assessment are referred to as “Means Not Disclosed” and can be charged their cost of care.
People who enter an Aged Care Facility after 1 July 2014 have their ability to contribute towards the cost of their accommodation and care calculated based on their assets and income.
Where the calculated amounted is less the maximum accommodation supplement of $55.44 per day (as at 20 September 2017) the resident is classified as Low Means.
Home Care Packages provide care and support to assist older people who want to stay in their own home.
To be eligible to receive a Home Care Package, a person must be assessed and approved by the Aged Care Assessment Team (ACAT). ACAT assessments determine eligibility for Government Funded Care Services. An ACAT assessment remain valid indefinitely unless the approval was granted for a specific time period.
Gifting is a term used when a person, or their partner, gives away or transfers assets or income and in return receives nothing or less than the market value in money, goods or services.
Pre-paying a funeral enables a client to choose and pay in advance for their eventual funeral. They can pay for the funeral in full or pay it off in regular instalments over a period of time. The cost is fixed in today's dollars, even if the funeral is not for many years. Funeral bonds are an investment product that can only be withdrawn after death to pay for a funeral, they may not cover the cost of a funeral.
For most people looking at funding aged care the biggest decision they face is whether to keep (and possibly rent) or sell the former home.
If someone is suffering from financial hardship and unable to pay for their cost of aged care, they may be eligible for financial hardship assistance for some or all of their aged care fees.
Deeming is a set of rules used to assess income from financial investments for social security and aged care purposes. Deeming assumes that financial investments earn a certain rate of income, regardless of the amount of income they are actually earning. If income support recipients or aged care residents earn more than these rates, the extra income is not assessed.
When a couple is entering into Residential Aged Care consideration needs to be given to the timing of their move and the impact this can have on their means assessment.
Post 1 July 2014 a person's ability to contribute towards the cost of their accommodation and care is subject to a means test which incorporates both assets and income.
The reforms removed the distinction between low care and high care, creating a single payment structure for aged care residents:
An insurance or investment bond is an investment which has features similar to a managed fund in terms of an investment whilst also being a life insurance policy.
An annuity provides guaranteed regular payments for a set period of time in exchange for an initial capital investment. Unlike market linked retirement income streams, annuities give clients certainty - they know how much they will get and how long it will last.
This document contains a glossary of terms related to Residential Aged Care.