Aged Care Gurus

Factsheets

These fact sheets are used to find quick answers to common questions and clarify any technical queries you may have. These are for you and your team to help you navigate retirement living and aged care advice.

Annuities

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.

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Bond In Trust

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. Centrelink assess financial assets held in a Trust structure differently to those held in a client's own name.

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Deeming

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.

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Financial Hardship

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. Financial hardship assistance can apply to the basic daily fee, means-tested care fee and/or accommodation contribution/payment, it does not apply to extra or additional service fees.

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Funeral Expenses

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 Funeral bonds are an investment product that can only be withdrawn after death to pay for a funeral, they may not cover the cost of a funeral.

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Gifting

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.

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Home Care Overview

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.

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Home Care Package Funding and Fees

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.

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Income Support Payments

An income support payment is a regular payment that helps you with living costs. An income support payment includes: Age pension, austudy, bereavement allowance, carer payment, disability support pension, farm household allowance, ewstart allowance, parenting payment, partner allowance, sickness allowance, special benefit, widow allowance, wife pension, youth allowanace. In addition; DVS ISP include income support supplement, service pension and veteran payment.

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Loans to fund a RAD

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.

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Means Not Disclosed

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.

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Means Tested Care Fee

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. The Means Tested Care Fee is used by the government to offset funding provided to the facility through the Aged Care Funding Instrument (ACFI). The amount the resident can pay is capped at the lesser of the calculated amount or their cost of care. There is also an annual limit of $28,087.41 and a lifetime limit of $67,409.85 (which includes any Income Tested Care Fees paid towards a Home Care Package).

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NDIS in Aged Care

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. NDIS funding can be used to pay towards some (not all) of the costs of aged care accommodation and care. NDIS funding can also be used to access services in addition to the aged care services, where the aged care provider is also an approved NDIS provider these services may be delivered by the aged care provider.

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Pre-2014 Reforms

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.

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Retirement Villages

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.

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Reverse Mortgages

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.

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Superannuation

Superannuation, when held in accumulation phase by a client under age pension age, is an exempt asset for pension and aged care means testing. Account-based pensions are assessable assets that are subject to deeming except where they qualify for grandfathering.

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Fact Sheets