There’s no denying that the Australia aged care system can be overwhelming to navigate. One area that confuses a lot of people is aged care income and asset testing. Not only how it actually works, but how it will affect what you pay for aged care and what decisions you make about selling assets such as the family home.
If you or a family member are considering transitioning to aged care, understanding how aged care income and asset testing works will help you get a better picture of your aged care costs. You can then more adequately compare the costs of entering residential aged care with other aged care options, such as home care and aged care communities.
The main purpose of the income and asset assessment is to determine if you are eligible to receive assistance with your residential aged care accommodation costs from the Australian Government and if you need to pay a means-tested care fee. The means-tested care fee is a contribution towards the cost of care that some people may need to pay. The care fee contributes to your day‑to‑day care costs in an aged care home.
The way your income is considered for aged care purposes is different to how it is considered for tax purposes, as some of the financial guidelines are different.
A good starting point is to have a look at the fee estimators, tools and checklists on the My Aged Care website. These tools are provided as a guide only but can give you a general picture of what effect your income and assets will have on your aged care costs if you or your loved one will need to move into residential aged care.
The aged care income and asset test includes five main areas you should be aware of:
More information on these areas of the aged care income and asset testing is available on My Aged Care website.
Before you enter care, you should seek a formal assessment of your income and assets through Department of Human Services. If you do not complete an income and assets assessment, you will not be eligible for any Australian Government assistance towards your care or accommodation costs.
At Seasons, we are an aged care community rather than a residential aged care provider so we don’t rely on an income and assets test to work out your accommodation and care costs.
All our ingoing, ongoing and outgoing costs are a set price for each of our residents, regardless of their assets or income. This means that as long as you have the finances to afford your ingoing contribution (which is a set fee for your chosen apartment) and 85% of the base age pension for your weekly fees, your other investments and assets don’t need to be mentioned or considered.
While you weigh up your financial options and make your way through the aged care income and asset testing maze, it’s a good idea to get some professional financial advice.
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This blog post was first published on Seasons Aged Care.