The five major changes coming to aged care this year
The means test is in line with the age pension. Thresholds will depend on whether you are single or a couple and your homeowner status. The test, whether assets or income, that creates the greatest contribution is the one that will apply.
For a single homeowner, as an example, if assets (excluding the home) are below $314,000 and annual income is below $35,266, the payment will be 5 per cent for independence services and 17.5 per cent for everyday living services.
For assets beyond $913,442 or annual income of $99,025, they will pay the maximum contributions of 50 per cent for independence services and 80 per cent of everyday living services .
With assets or income between the thresholds, contributions will be pro-rata.
More funding
Four levels of package will increase to eight with maximum funding increasing from $56,000 a year to $78,000. Eliminating the need to “save up” funds, there will be immediate funding for assistive technology and home modifications (up to $15,000) and end -of-life care (up to $25,000). Saving up is of limited benefit as only $1000 or 10 per cent of your annual budget can be rolled over.
Higher lifetime cap
The lifetime cap on means-tested fees covering home care and residential aged care will increase to $130,000 (from $82,000) and the home care annual cap ($13,670) will be abolished.
People who were approved for a package, were in the queue or were receiving a package as of September 12 last year will be protected by a “no worse off principle” that applies to home care and means-tested fees if they later move to residential aged care.
Perhaps the most exciting part of these changes is the promise that it will reduce wait times. Currently, there are 83,000 people in the home care queue and it takes 11 months on average to get the package you need.
The reforms aim to reduce the wait to three months. The cost of care and how much funding is available mean nothing if you can’t get the care you need.
Rachel Lane is the author of the bestselling book Aged Care. Who Cares? and Downsizing Made Simple with fellow finance expert Noel Whittaker. The new edition of Downsizing Made Simple is now available online.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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