When the time comes to enter aged care, you may be left wondering how income and assets affect your financial situation. Income and assets do play a part in how much your aged care fees will be, however the answer is not straightforward. There are a number of costs involved when entering aged care; daily fee, means tested care fee, accomodation deposit and extra service fees. For a breakdown, we have another article which goes into detail here.
To enter an funded aged care facility, eligibilty is determined through an assessment. Regardless of your financial situation, if you need care, you will recieve the right level of care. The only thing that will vary will be how much you have to pay towards care.
How is it assessed?
The assessment for your fees is done by Services Australia or DVA. A submission is made using a form where you outlay all your income and assets, and a determination is made. This form can cause angst and this is the perfect time to have us involved. We help clients with these forms every week, and will make sure you have completed it to ensure you recieve maximum entitlements. You can get an estimate from myagedcare.gov.au, however we strongly suggest seeking financial advice before submitting the final form to ensure you recieve the maximim entitlements.
How does income and assets affect the assessment?
The circumstances can vary from person to person. If there is a family home involved and a ‘protected person’ eg spouse is remaining in the home, that does not count as an asset. Other assets are calculated such as savings, investments and income. If these change over the time you are in aged care, your entitlements can change as well.
Mary’s story – how her income and assets affected her payments
Mary is 84, she is married to Bill who is 85. Mary had a fall and has been assessed as requiring care. Together, they have a home worth $600,000. Bill will be staying in the home, so this does not count towards Mary’s assets. They live of an income of $88,000pa and have assets worth $142,000. As a couple, the split is 50/50, so Mary has a $44,000 income and assets worth $71,000. This is submitted and comes back showing Mary is eligble for assistance. She will need to pay:
A basic daily fee of $53.56
Accomodation contribution of $31.41 per day
Based on her situation, she cannot be asked to pay a means tested care fee.
These fees are based on her current circumstances, so should Bill enter care or her financial circumstances change, her fees can too. This is why recieving professional financial aged care advice before entering aged care is imperative to set yourself up and understand all your options. Contact us for a chat about your circumstances, let us guide you through the process and help you and your family make informed financial choices.