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Who do you know is
next for Aged Care?
Yes aged
care is staring us in the face & as we have mentioned before it is a
minefield. So much so that the productivity commission has just written a
report ‘Caring for Older Australians’ & writes ‘the
opaqueness of the system’.
Hence the current rules will be rewritten which happens in
all games.
Michael S
wrote on 16th August 16, 2011 of ‘it
must make baby boomers pay more of their aged care bills.
So its countdown for you & I. How can we prepare for it?
Yes having the funds is important & having the knowledge to prepare for it
minimises your downside. Remember Proper
Preparation Prevents Piss Poor Performance.
Let’s look at some of the
framework in Aged care as they stand @ August 2011.
The first step is to be assessed
by ACAT [Aged Care Assessment Team]. ACAT assess & approve what kind of
care will best suit your needs when you can’t manage at home without
assistance.
There are two broad types of residential Aged care & the
facilities offered can vary.
1.
Low level
care as hostels providing accommodation & personal care.
2.
High
level care nursing homes providing continuous care for those who are frail.
What are the Fees
& Charges?
After classification into Low Level care then there is an Accommodation bond where the maximum
can be all your assets minus $39,000. This can be paid as a lump sum
or periodically where the facility
charges 9% or a combination of both. Out of this refundable bond the hostel
can retain $3816 p.a. for 5 years. This accommodation bond is exempt from
Centrelink asset & income tests.
This is when it is important
to seek advice before selling the family
home. In general when you
enter aged care if your spouse remains in the home then the home is exempt from the assets test.
If there is no spouse in the home
then the home is not included as an asset for 2 years. The net rent is not assessable if the bond or charge
is paid periodically.
I.e. if you sell the home it becomes an assessable asset. [this is
the subject of the productivity report.
Then there are daily fees which are a basic daily fee and an income tested fee & an extra service fee.
High level nursing home fees have
a daily charge depending on your assets. As above if your assets are less
than 39,000 then there is no daily charge. Above $102,544 then the daily charge
is 30.55. [August 2011]. In between
it is [Assets -39,000] / 2080 = ?
What happens to the family home
when assessed? It will be included as an asset unless
·
A spouse or dependent child is living there
·
or a carer eligible for income support for 2
years
·
or a close relative eligible for income support
for 5 years
This assets assessment is different from the Centrelink
assessment.
What are the daily
fees?
The standard resident
contribution or Basic fee is 84% of the pension & currently 40.25 daily if non pension income
<9,971 or for a couple 19,006. [there are variances on these.]
There is an income
tested fee in both high & low level care. & has a daily maximum of 64.69.
This is calculated as
[Total assessable income - total
assessable income free area] X 5/12
Generally an Income free area is 22,045 for singles
& 21577 each for couples.
If we
were having this discussion in three years time & you were looking
back over those three years what needs to have happened both personally &
professionally for you to feel happy with your progress.
Hence you have an
opportunity to reduce your total assessable income by utilising some planning
& coaching. There are strategies for this & you are welcome to contact
us o 07 3848 1088 or email
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A suggestion that maybe relevant
for some is the use of various long term income streams. As these may have a
return of portion of your capital then
you can reduce your assessable income
down by this return of capital. Hence your income tested daily fees are reduced
but not your income. These income streams can be tailored for you & hence
are very flexible in their design for you.
John McAuliffe
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