Affording aged care if you have no assets
If you receive an age pension and have no or very few assets, the good news is that you can still afford quality aged care in a nice facility. Most aged care residential facilities have what are called ‘supported beds’. These are beds that are offered to people who are low means (as defined) and the Federal Government provides additional funding to the facility for supported beds. They are in high demand so you are more likely to get a supported bed in the facility of your choice if you plan ahead. This article sets out more detail about the eligibility criteria and how to find a supported bed.
Asset thresholds for supported beds in aged care
If you have assets below the relevant thresholds, you will not be required to pay any bond (called an Accommodation Payment or Accommodation Contribution) at all unless you have an independent income source other than your pension. As at the date of publishing this article, the relevant asset thresholds are:
- for a single person below $46,500
- for a couple combined below $93,000.
If you have some , but not a lot, of assets and depending on whether you have an independent income source, you may be eligible for a partly supported bed meaning that you will be required to make a contribution towards the cost of your accommodation. This contribution is called an Accommodation Contribution. The amount you will be required to contribute depends on the amount of your assets and income. As at the date of publishing this article, the relevant assets thresholds for a partly supported bed are:
- for single, assets from $46,500 to $159,631.20
- for couples combined assets from $93,000 to $319,262.40
Up to date thresholds can be found in the current Schedule of Resident and Home Care Fees and Charges
Treatment of the family home, other assets and independent income
Your home is excluded for these asset thresholds if a protected person will remain in the house. A protected person is a spouse or dependent child, a carer on income support who has lived there for at least 2 years or a close relative on income support who has lived there more than 5 years. If there will not be a protected person remaining in the home, the home is included and its value is capped. At the moment that cap is $159,631.20 which means that, if you own a home and no protected person will be remaining in it, you will most likely not qualify for a supported bed.
If you receive income other than an age pension and returns from investing your assets, you may also not qualify and you should seek independent advice. Remember that personal assets like household furniture and cars, boats and caravans are also included in this threshold test.
If you qualify, the only payment you will be required to make for your aged care costs, apart from the Accommodation Contribution, is the daily fee which is pegged at 85% of the full age pension plus any additional fees for extra things that you agree to with the owner of the facility. You should either avoid any facilities that ask for these fees or ask them if they waive the fees in cases such as yours as these additional fees can add up very quickly.
Change of financial position whilst in care
The asset and income assessment is not static – it is regularly revised during your time in care. If your asset or income position changes whilst you are in care, for example if the protected person leaves the home or you inherit a sum of money, you may be asked to contribute more to the cost of care after you have moved in.
Finally, sometimes paying an Accommodation Contribution can cost you more than paying the amount of bond (Accommodation Payment) that the facility is asking for from someone who is not low means. This is more likely if you are at the upper end of the thresholds. We recommend that you speak to us or seek independent advice from a suitably qualified and specialist aged care financial adviser.
Finding a supported bed
You can use an aged placement agency such as us. They usually have relevant and up to date information about available supported beds. Otherwise, the best way is to ring around the aged care residential facilities in or around the area you want to live in and ask them if they have supported beds and whether any are available now or in the future. You should ask if they are any conditions for supported beds. For example, some may only have supported beds in shared rooms or may require you to pay additional fees for extras. You can ask to put on a waiting list for supported bed and then call at regular intervals to make sure you remain on the waiting list. Many wonderful aged care facilities have supported beds and sometimes you can get very lucky. The harder you try, the luckier you will get.
If you need advice or help, call or email us.
Until next time
Sara and Margaret