Webinar follow up – The top 3 questions answered plus your Q&A
Question 1
If a couple is in respite and one wants to be assessed as low means, can one become permanent and the other stay on respite until the next day?
Yes, it is possible. However, we would recommend keeping one in respite for at least a week to help avoid the possibility of the same date of entry being used. It can be an extremely time-consuming exercise attempting to have a re-assessment completed.
Question 2
If a family member pays a resident’s RAD, what happens when they leave the facility?
The facility is required to refund the RAD to either the resident or their estate. Consequently, we would strongly advise the lender to obtain legal advice from a qualified lawyer and discuss the options and the need to prepare a loan agreement so that the loan can be repaid to that family member.
Question 3
We have a couple who both entered care on the same day. Both have now been assessed as having to pay a DAC? What happened there?
In all probability, Centrelink/DVA would have assessed them as either full or part-pensioners with combined assessable assets greater than $101,000 (2 x $50,500) and less than $343,070.40 (2 x $171,535.20). If they had assets in excess of this threshold, they would have both been assessed as RAD/DAP payers.
Question 4
Should the DAC be capped at the room price if a previously fully supported resident is now assessed as being required to pay a DAC of $58.19 after their spouse also moves to residential care and their former home becomes assessable?
There is no requirement for the facility to cap the DAC at the RAD/DAP room price although some providers do so.
If Centrelink assess the low means resident as being required to pay a DAC of $58.19 per day, we can assume they are in a new or significantly refurbished facility with 40% or more low means residents (see below).
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.
The DAC is a co-contribution to the accommodation supplement and in the case a resident is fully supported, the government would pay 100% of the $58.19 per day and the resident would pay 0%. Once the spouse goes into care and the former home becomes assessable (up to the cap) the split will change with the government paying 0% and the resident required to pay 100%.
Next webinar topic:
Optimising ACFI to fund quality care and what the resident pays