What happens when a parent needs to go into a nursing home?

Our clients often tell us that the decision to move a parent into residential care leaves them feeling overwhelmed with emotion and apprehension. While they know permanent residential care is the right step for their loved one, the financial considerations can compound any stress and uncertainty they are already feeling.

A common concern about moving into an aged care facility is whether your parent has enough money to move to the place of their choice. While everyone’s situation is different, understanding the assessment process and the finance options can help alleviate this concern.

The first step is usually to identify if a parent will be classified as a market payer (also called a RAD payer) or low means resident (also called a concessional resident). This is an outcome based on the resident’s personal circumstances on the day they transition to permanent residential care.

The personal circumstances taken into consideration to determine their classification include:

• Marital/partnership status – single, partnered, widowed
• Home ownership status
• If a homeowner, whether a ‘protected person’ remains living in the home
• Their Centrelink assessable assets and income

If they are assessed as a market payer, the following aged care fees are generally payable:

• The advertised Accommodation Payment payable as a Refundable Accommodation Deposit (RAD), a Daily Accommodation Payment (DAP) or any combination of the two
• A Basic Daily Care Fee set at 85% of the maximum basic single age pension. All residents generally pay this fee.
• A Means Tested Care Fee, based on Centrelink assessment of their assets and income. This fee has both an annual and a lifetime cap
• An extra or additional service fee, where the aged care home provides services which are in addition to those required under the Quality of Care Principles 2014

If assessed as a low means/concessional resident, they will generally be required to pay:

• A Basic Daily Care Fee set at 85% of the maximum basic single age pension. All residents generally pay this fee.
• A contribution towards their accommodation costs based on Centrelink’s assessment of their assets and income, capped at the facility’s maximum accommodation supplement. This can be paid as a lump sum amount called a Refundable Accommodation Contribution (RAC), a Daily Accommodation Contribution (DAC) or any combination of the two.
• A Means Tested Care Fee is not usually payable, however this may become payable in the future where Centrelink’s assessment of their assets and income increases.
• An additional fee sometimes for services provided in addition to those required under the Quality of Care Principles 2014

These fees can vary in the future if the resident’s circumstances change but their initial classification will not unless they change facilities or leave the system for at least 28 days.

Our specialist advisers will explain the aged care system to help you find the right home, work out the costs and choices you have to cover them and organise finances for now and the future.

If appointed as your parent’s nominee, they will also complete and lodge the various forms, deal with the government departments on your behalf and provide additional support as you navigate various decision that will need to be made.

Our clients tell us that working with us relieves them of the financial and emotional burden. Most of all, they gain confidence in their decisions and peace of mind.

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