Age care is something we will all come across in our life, either for our partner, parents, grandparents or ourselves.
It is a very confusing stage of life and quite complicated. Unfortunately usually when someone has to go into age care they do not have the capacity to understand the cost and charges and how they work. It is up to the spouse, child or grandchild to make the arrangements.
As you are dealing with other people’s money it is important to understand what is happening.
The first hurdle will be the accommodation bond, this is is usually paid when a resident permanently enters a low care or extra services high care aged care home, and the resident has more than $43,000 in assets.
The accommodation bond is an interest free loan from the resident to the aged care provider.
The aged care provider uses the interest earned from the accommodation bond monies to maintain their current building or to build new aged care homes for future residents.
There is no set level for the amount of the bond. The rule set out by the government provides that a resident must be left with at least $43,000 in assets.
The amount of the bond needs to be negotiated between the family and the aged care operator. Given the general lack of available places in age care the family is generally in a tough position.
Be aware that the size of the bond can vary between age care facilities and residents in the same age care facility. The only rule is that the resident is left with $43,000.
There is no relation between the level of the bond paid and the level of the care provided once you have been admitted into the age care facility. There is no minimum bond level however the age care facility may request that you pay a minimum bond.
Daily care fees are the same whether you are a resident in a low-level or high-level care home.
These fees have two components. (1) Basic daily care fees are based on the pension and are indexed and (2) Income tested daily care fees for residents with a higher income.
Aged Care Funding Instrument (ACFI) determines the level of financial assistance for personal care and lifestyle costs when a resident enters Commonwealth subsidised residential care.
The ACFI divides care into three categories and each category has three funded levels.
- Activities of Daily Living
- Behavioral Supplement
- Complex Health Care Supplement
Each of these areas is then broken down in the levels of care being low, medium and high. Depending on the level of care you require at each level will determine the amount of government subsidy you will receive.
The subsidy paid to residential care provider is the lesser of the sum of the amounts payable in each level (activities of daily living, behaviour supplement and complex health care supplement) and the maximum ACFI rate, which is currently $181.21 per day.
The resident makes up any difference in the cost of the daily care fee or the facility can take a bond.
Note: This is just a brief overview and you should consult a professional for more information.