Quiz

Grace lives in a unit that is jointly owned with her brother, Tony, who lives elsewhere. The unit is valued at $310,000 and she is in receipt of the full Age Pension.

Grace has $10,000 in a bank account and personal assets of $5,000.

1. Will Grace be considered a resident that has the means to be an Accommodation Paying resident?
2. If Tony entered care, would the unit jointly owned with Grace be subject to the home-cap?

Answer 1:
Tony lives elsewhere so is not a ‘protected person’. Consequently, Grace’s assessable assets are;
Home unit $155,000 (50% x $310,000) + bank account $10,000 + personal assets $5,000
Total Assets $170,000

As this is below the low means asset threshold of $171,535.20 (and her assessed income is below the income threshold) she will be assessed as a low means resident.

Answer 2:
As Tony was living elsewhere, his share of the home would not be subject to the home-cap. The cap is only applicable to the resident’s former principal place of residence. Centrelink/DVA will assess his share of the home as an investment property.

Attendees’ Questions

In the above quiz, what happens if Tony was living in the house and was dependent on Grace?

If Tony was living in the house and it was his principal place of residence, following his move to residential care, his share of the home would be subject to the home cap. If Grace, a full age pensioner, had been living in the home as his carer for at least 2 years, she would be considered a protected person and the home would be excluded from his aged care asset assessment whilever she remained living there.

However, the day Grace ceases living there, Tony’s share will be assessed at market value but limited to the capped rate for the aged care fee assessment.

What happens if a DAC payer (a low means resident) requests a voluntary move to a larger room, with a higher RAD. Can the son contribute to cover the difference?

If a resident has been assessed as low means on the day they moved to permanent residential care (DAC payer), they will always remain a low means resident unless they change facilities and are re-assessed, or they leave the system for 28 days or more. The only exception is if Centrelink/DVA become aware of previously undisclosed information after the resident has moved to residential care. Under these circumstances, they will retrospectively amend the assessment.

A DAC is a co-contribution towards the accommodation supplement and can be converted to a lump sum RAC using the formula – (DAC x 365 ÷ MPIR).

The RAC is the maximum accommodation payment that can be charged regardless of the advertised RAD for the room. If the RAD/DAP for the room is higher, the facility cannot accept an additional contribution from the son to cover the difference.

How do you ensure they are left with $50,500 in assets?

This only applies if you are fully cognisant of the resident’s financial circumstances and they are under no obligation to disclose their financial circumstances to you or anybody else. The requirement to leave the resident with the ‘minimum permissible asset value’ (currently $50,500) only applies for the first 28 days after they enter permanent residential care.

If a resident fails to disclose their financial circumstances to Centrelink or DVA, they may be assessed as ‘means not disclosed’. As such, they will be required to pay the maximum means tested care fee, caped at their ACFI and subject to the annual and lifetime caps.

Additional Service fees can clearly impact on potential resident’s payments and funds remaining. Would you please address how to approach this fee?

Additional Service fees need to be included in the estimate of daily/monthly fees that need to be paid. As discussed during the webinar, our advisers have access to several funding options and will be happy to discuss these with you on a case by case basis. If there is a likelihood of the resident being unable to pay some fees, even for a short period, you need to take this into account when deciding whether to accept their application to move to your facility.

We are an extra services facility. How can we determine if the resident can afford to pay the RAD/DAP and what information can we request from the resident that confirms they are not a low means resident?

You can request any information you consider relevant but the resident and/or their family are under no obligation to comply with your request. However, you are under no obligation to accept their application if you suspect they may be assessed as low means. Admitting a low means resident to an extra services facility can be problematic from a security of tenure perspective, regardless of your rights under the terms of your residential care agreement. Encouraging a resident to seek personal financial advice prior to their admission can help them make an informed decision. An Alteris Lifestyle and Care adviser would be happy to assist.

Is it the resident or the facility that applies for financial hardship and who receives the supplement?

It is the resident who applies for financial hardship and the facility who receives the supplement. Applying for financial hardship can be an extremely difficult process. The resident and/or their family would be well advised to seek specialist financial assistance from an Alteris lifestyle and Care adviser.

No provider would return the RAD before probate.

Not so. It’s not so uncommon for a provider to refund the RAD to a beneficiary/s without sighting probate where the provider is confident the recipient is entitled to the proceeds. We still consider this a risky option and we would suggest seeking advice from an appropriately qualified lawyer.

We have a situation where family disputes are delaying probate. We have tried to get the RAD refunded to the solicitor’s trust account with no luck. Meanwhile we are accruing interest!!

This is not an uncommon problem. The legislation stipulates that the RAD must be refunded to the resident or their estate. Interest accrues at the base interest rate from the day following the resident’s death until 14 days following the grant of probate or letters of administration. Thereafter, interest accumulates at the maximum permissible interest rate (MPIR) until it is refunded.

To refund the RAD prior to the grant or probate or letters of administration, could prove to be extremely costly, possibly having to refund it a second time. In these situations we would suggest seeking advice from an appropriately qualified lawyer.