Question 1

Is the age pension considered as income?

The age pension is considered income under the Aged Care Asset and Income assessment rules. It will be assessed if it and other received income currently exceeds $27,840 and above per annum for a single person or $27,320.80 per annum and above for each member of a couple.

Question 2

With people possibly leaving aged care due to COVID-19 and returning at some stage, what new fees will they need to pay? Noting the different requirements for those who enter before 1 July 2014; Also possible implications for pensions (aged and disability pensions) if their finances change. For example, move out and received a return on their bond, will this will affect their pension?

Residents are allowed to take 52 social leave days per annum without affecting their resident status. Under Government Covid19 rules residents will be able to still retain their place in residential care if they take emergency leave from 1 April 2020 until 30 September 2020. Should a person leave a facility permanently or be absent for 28 days they will be considered a new resident and would have to be admitted as such. The fees and charges would be subject to their assets and income assessment at that time of entry. If they receive a bond or RAD refund then the money would be subject to the age pension assessment rules. If the amount exceeded the minimum or maximum asset test limits it could mean a reduction or loss of age pension. The lump sum RAD or bond will also be subject to the age pension income test at a deemed rate of interest. If residents want to voluntarily move aged care facilities and they entered care prior to 1 July 2020 then they would enter the new facility under the old rules. If a facility wanted to have them enter as a RAD paper then they must opt into the post July 2014 system before they are given permanent entry.

Question 3

Is it true that the government will change its funding instrument in the near future?

The Department is looking into a new assessment and funding model for Residential Aged Care. However, the timeframes for this would most likely not be “near future” as the commissioned study by AHSRI and their pilot was due to be completed in June 2020. The pilot was only the final step in the Wollongong University RUC study and sought to explore the Commonwealth’s capability to administer a national workforce of external assessors.

We have not received formal feedback from the Department on the outcome of this trial and suspect with the COVID-19 crisis playing out in Residential Aged Care, it will call into question the viability of sending an independent workforce of assessors to facilities across the country, especially when the Health Minister Hon Greg Hunt has directed limiting and reducing workforce sharing across sites.

Due to the above, we would not expect any “near future” changes to be imposed on our Industry just yet.

Sources for consideration:

Funding Reform:

AN-ACC Factsheet:

Single Site Operations Directive from Hon Greg Hunt MP:

Mirus Australia has invested significantly in people, processes, and technology to support the current funding model and we have a vested interest in monitoring closely to support our clients now and in the future.

Question 4

If a Resident is asked to pay the maximum accommodation subsidy and it is greater than the DAP, are providers obligated to charge the lesser of the two?

You are no doubt referring to Daily Accommodation Contribution (DAC) for low means residents. This must be charged to the resident either as a DAC or converted to a lump sum Residential Accommodation Contribution (RAC). The maximum RAC that can be taken is currently is $518,033 ( maximum accommodation supplement $58.19 per day x 365 days/4.10% MPIR). We note some operators are charging RAD’s & DAP’s which are less than the maximum RAC. This is entirely at the discretion of the operator.

Question 5

Can Mirus help in compiling the ACFI packs for facilities?

• Yes. Mirus Australia supports Aged Care Organisations with managing and preparing their necessary documents for both the purposes of funding as well as accreditation.
• Clinical Assessment Support & Education (CASE) – We provide a capacity support offering to Residential Aged Care Providers to prepare and write out functional assessments and care plans within our clients’ Care Management Systems. This is a Co-Sourced offering where both you + us work together to achieve a common objective (processing ACFI claims or improving quality assessment outcomes & care plans). As with all of our services, we focus on upskilling our client’s clinical teams with every interaction that we have.
• ACFI Evidence Reviews – A comprehensive review of an organisation ACFI Evidence pack, similar to a Dept Run Desktop Validation but with a focus identifying clinical gaps and supporting the Provider to improve in areas of need.
• ACFI Planning & Mentoring – Ongoing planning and organisation of the required ACFI processes. These are weekly huddles with our client’s clinical team to discuss, plan out, and run the necessary weekly activities to ensure a sustainable revenue management function at a facility.

More Information can be found here

Further to these services, we also offer 100% remote learning courses for individuals and organisations available at our Mirus Academy.

In cases where the facility decides to limit the resident’s contribution to the $350,000 RAD room, the equivalent daily amount would be $39.31 per day. Meaning the amount received by the facility would be $18.88 per day lower ($58.19 – $39.31 = $18.88 per day) or $6,891.20 per year.

Question 5

If a resident is admitted to an Extra Services facility and assessed as a RAD/DAP payer on the day of becoming permanent and their funds subsequently reduce below $171,535.20 because of their DAP payments, will Centrelink automatically reassess them as low means?

No, once assessed as a RAD/DAP payer on their day of entry to permanent residential care, they will always remain a RAD/DAP payer unless they change facilities or leave the system for 28 days. If their assessable assets & income fall below the relevant thresholds, they may be able to apply for financial hardship.

Question 6

If one member of a couple goes into care and is assessed as low means because the house is protected. When the second comes into care and the house is sold, are they allowed to use all the house sale proceeds to pay a RAD or do they have to halve the value of the house so the first person’s DAC goes up and the means tested fee goes up?

If the home is sold, the first member to enter care will remain a low means resident but will normally then be required to pay the maximum DAC (equal to the facility’s maximum accommodation supplement). They will normally also be required to pay a Means Tested Care Fee – subject to the annual and lifetime caps.

The second member to enter care will likely be required to pay an increased Means Tested Care Fee (the same rate as their partner because Centrelink/DVA assess assets 50%/50%).

The sale proceeds can generally then be used to pay a lump sum RAD and/or convert the DAC to a lump sum RAC in any combination – the RAD and RAC are still assessed 50%/50% by Centrelink/DVA.