How do you afford aged care if you are a pensioner with no assets?

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

Changes to the Age Pension in 2017

Changes to the Age Pension in 2017

Age Pension changes which take effect from January 2017 will mean that a considerable number of older Australians will lose part or all of their pension.  A smaller number of pensioners will be better off as a result of these changes.

The Age Pension provides income support and access to a range of concessions for eligible older Australians. Retirees who are currently aged 65 or over, and who satisfy income and assets tests and other requirements, can receive a full or part pension.  There are changes to the rules around the assets test which will come into effect on 1 January 2017.

What are the age pension changes?

From 1 January 2017, some part pensioners will receive a full pension.

  • Full pension, home owners 

    If you own a home, the new assets thresholds will allow you to hold assessable assets up to $250,000 (singles) and $375,000 (couples) without impacting your full-pension entitlements.

  • Full pension, non-home owners 

    The new assets thresholds for those who don’t own a home will be $450,000 (singles) and $575,000 (couples).

If you’re on a part age pension what will happen?

  • Part pension, home owners 

    Couples who are homeowners will not receive the pension when their assets reach $816,000 in value. Single homeowners will stop receiving the pension if and when they have more than $542,500 in assets.

  • Part pension, non-home owners 

    Singles who don’t own a home won’t qualify for the pension if assets total $742,500. And couples will lose pension entitlements if they have more than $1,016,000 in assets.

The upside of losing the age pension

People who do lose their pensions in 2017 will automatically be entitled to receive a Commonwealth senior’s health card or a low income health card. These cards will provide access to Medicare bulk billing and less expensive pharmaceuticals.

How you can prepare for the changes to the age pension?

You can find out more about age pension changes on the Department of Human Services website .

Depending on how these changes will impact you, there could be a number of things for you to consider, including:

  • If your entitlements are reduced, how will you replace lost income?
  • Are there any ways to minimise the impact of these changes?

We recommend that you seek advice about these changes soon from a qualified financial adviser.

Until next time

Sara and Margaret

How to avoid lonely old age

A while ago we went to the COTA Australia annual conference. COTA Australia is the peak national organisation representing the rights, needs and interests of older Australians. The President of COTA, a very impressive woman in her 70’s welcomed the forum and reflected on the history of COTA and its achievements During the course of her speech, she mentioned that when COTA started in the 1960’s the single biggest issue facing Australians of old age was social isolation and that remains the single biggest issue today.

We see strong evidence of this with many of our clients. With age, many of your friends and associates have passed away or are too ill to socialise, you are treated very differently; often ignored and your opinion doesn’t count, your family is too busy working and raising their own children or grandchildren to spend much time with you. And it is hard to make new friends. Social isolation is most prevalent for those who have lost their partners, particularly when they have spent many years caring for them. There is a great sense of loss of purpose when the person you have cared for passes away.

So here are some suggestions to deal with social isolation;

  • remain active. Join a group that has some form of exercise. There is likely to be some sort of local walking group or community sports centre that has fitness or exercise classes for older people.
    join a club. There are loads of clubs for older Australians. The best known are U3A and Probus which each have local chapters.
  • contact the local council to see what activities they have. Most councils have programs for older Australians and many even assist with transport to and from the event.
  • offer your services to a charity. Many charities do not allow older Australians to volunteer because they cannot insure them in the workplace but there are always some that are not ageist.
  • learn to use a computer. Local libraries often provide education sessions and help and there are private organisations devoted to helping older Australians as well. We have several clients who have learned to use Skype and it has changes their lives.
  • move into some form of community living, perhaps a retirement village or an aged care facility.
  • find transport alternatives. Often many people are isolated because they cannot get out and about. Contact you local council about transport assistance, apply for the multi purpose taxi program (which gives you half priced taxis) or apply for a home care package either through your council or through the ACAS process and use that to pay for someone to take you out.

These are just some suggestions. The trick is to think about what you like and then make the effort to do it and spend what money you can enjoying yourself. You have earned it.

Contact us if you need more help or advice.

Until next time.

Sara and Margaret

The Aged Care Centrelink form – does it need to be done?

Do you need to complete the Centrelink form for aged care?

If you or a loved one are moving into an aged care facility, you will be asked to complete an aged care Centrelink form called ‘Permanent Residential Aged Care – Request for a Combined Assets and Income Assessment’ or SA457.  The form is 32 pages long and has 145 questions and can be overwhelming.  It often comes at an emotional and stressful time. So what is that form for and do you need to complete it?

Costs of aged care

Before reading on, you will need to understand that aged care costs have 2 main components;

  1. Accommodation Costs (often referred to as a bond or RAD); and
  2. Care and Services Costs.  There are 3 potential sub components of the Care and Services Costs (namely daily fees, means tested care fees and additional services or extra services fees).

Think of the Accommodation Costs as purchasing or renting a home and the Care and Services Costs as the daily costs of living such as food, utilities, provision of care and other daily expenses.

What the form assesses

The form assesses the care recipient for the following:

  • In relation to Accommodation Costs: whether the care recipient is entitled to a supported bed.  If the care recipient has low means, they are able to have some or all of their Accommodation Costs paid by the Federal Government; in other words they may be entitled to pay a reduced or no bond.  ‘Low means’ is a defined term and the threshold changes every March and September.  As at 1 July 2016, a person with assets less than $46,500 (or one of a couple with less that $93,000 in assets), excluding the home if a spouse or other protected person will remain in it, might be entitled to pay no contribution towards their Accommodation Costs. A person with assets less than $159,423.20 (twice that for one of a couple), excluding the home if a spouse or other protected person will remain in it, might be entitled to make a reduced contribution towards their Accommodation Costs; and
  • In relation to Care and Services Costs: how much a care recipient will be required to pay towards the cost of care through the means tested care fee.  Care and Service Costs are additional to Accommodation Costs.  They are also in addition to the basic care fee. All care recipients pay the basic care fee which is an amount pegged at 85% of the aged pension (currently $48.25 per day).  Aged care costs a lot more than $48.25 per day and the Federal Government subsidises the rest of that cost unless you have the means to contribute.   The assessment works out how much a person will contribute to that subsidy.  The amount a care recipient has to contribute depends on 2 things; the means test and the actual cost of care.  A care recipient with low care needs may contribute anything from $0 to around $150 per day and a care recipient with high care needs may contribute anything from $0 to around $250 per day.  The means tested care fee is capped at around $26,000 per annum and $62,000 over a lifetime.  The means test assessment uses a complicated formula made even more challenging by what is included or excluded from the test or included at reduced amounts.  You can get an estimate of the means tested care fee by using the calculator on the MyAgedCare website .  If you want to receive a more accurate assessment, you should contact a financial planner who has the software to conduct the calculations and can help you optimise the aged care costs and manage cashflow.

What happens if you do not fill out the form?

The form does not have to be completed but if it is not, the care recipient will be liable for the full cost of care up to the annual and lifetime caps.  For care recipients with substantial assets or income, completing the assessment may not be worthwhile as it will make no difference.

Aged care fees and charges are complicated and confusing.  We always recommend you seek advice about the costs of care as several components are negotiable and some costs can be avoided or minimised.  If you need assistance, contact us at

Until next time

Margaret and Sara

Organising a break for carers

Carers need a break

Carers provide countless hours of care and support for our ageing population.  Sometimes they need a break.  This can be organised through respite care.

Respite options

There are different types of respite which are outlined below:
1. In Home Respite, this is when a carer comes in to your home so the carer can get a break for a few hours or the carer can take the person requiring respite out for a while. This type of care can be delivered during the day or overnight.
2. Centre Day Based Respite. This respite takes place at a day centre or club. It offers activities and outings and usually run between 10am – 3pm. Some of these centres offer a pick up and drop off service as well.
3. Residential Respite Care. This is for individuals who need help every day and therefore enter in to a aged care residential facility or a supported residential service for a short stay. This can be planned for a rest break or the carer may be going on a holiday.

Residential Respite Care can be paid for privately (cost varies from facility to facility) or through subsidised services.  It can cost as little as about $50 per day. In order to have access to a subsidised bed care recipient must have an ACAS assessment approving respite. ACAS is a free service and an assessment can be organised by calling MyAgedCare on 1800 200 422.

Residential Respite Care that is accessed through an ACAS entitles individuals to up to 63 days respite per financial year, most aged care residential facilities require respite to be taken in 2 week blocks.

Not all aged care facilities have respite beds so plan ahead and make a booking.

Help in a emergency

Don’t forget there is also access to emergency respite care which can be organised by contacting your local Commonwealth Respite and Carelink Centre on 1800 052 222 during business hours (Monday to Friday, 8.30am–5.00pm) or 1800 059 059 outside business hours.

If you need help organising a break, call us on 1800 744 676 and we can help.

Until next time

Margaret and Sara