Pam’s fears on nursing home fees

Pam and her husband are approaching their 80s and rely on the Age Pension only. They need a plan should one of them need to enter a nursing home. 

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Q. Pam
As my husband and I approach our 80s and as we rely on the Age Pension only, we need to have some sort of plan should one of us need to enter a nursing home. The family home is in my husband’s name only. If he entered a nursing home, would our home have to be sold to cover the bond? Or would he be eligible to be covered by the 85 per cent of his pension plus the additional daily charge? I believe the additional charge is about $55 per day, which we would not be able to afford.

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A. Before a person enters aged care, Centrelink will assess their combined income and assets to determine if that person can receive help with accommodation fees.

Centrelink will add up the value of assets in Pam’s name, her partner’s name and both names, and divide the total by two. The same process applies for any income earnings.

The family home will be exempt from the assets test if the partner of the aged care recipient remains living there. However, if that person moves out, the home may start to count as an asset.

Centrelink advises Pam to contact them to request an aged care means test for residential care and to complete an additional assessment with an Aged Care Assessment Team (ACAT) to determine their suitability for entering aged care. They can apply for an aged care means test with Centrelink at any time, and don’t need to wait until they’ve completed an ACAT test.

Centrelink advises that regardless of the value of the family home, when it’s counted as an asset, its value will be capped at $162,815.20 (as at 20 September 2017).

Pam refers to the basic daily fee, which is set at 85 per cent of the single pension rate of the Age Pension, and covers day-to-day living costs, such as meals and laundry, according to Centrelink. The basic daily fee is the same for everyone, whether or not they receive an Age Pension.

People entering aged care may need to pay an additional means-tested care fee towards their day-to-day personal care and nursing costs. To determine if they are eligible for subsidised aged care fees, Centrelink will conduct a means test assessment.

The means-tested care fee will be based on a person and their partner’s combined income and assets, regardless of who earns the income or owns the assets. Annual and lifetime caps are also in place to limit the amount of the means-tested care fee they can be asked to pay.

As well, people may be required to pay accommodation costs, which are set and charged by the aged care home. Aged care entrants can receive government subsidised accommodation costs up to a maximum of $55 per day. The result of their aged-care means test will be valid for up to 120 days.

All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

If you have a Centrelink question, please send it to [email protected] and we’ll do our best to answer it for you.

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Written by Janelle Ward

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