The aged care system
What SMSF trustees should know around retirement.
From July 1, 2014 an aged care system has applied in Australia that places a greater emphasis on assisting Australians to stay in their own homes. The system only applies to people who have entered aged care facilities, or who receive care packages, after July 1, 2014.
The previous system differentiated between low care, that covered self supported living arrangements, and high care that related to nursing homes. Under the system there is only one class of aged care facility.
This means Australians have a choice between staying in their own home and receiving assistance under a “Home Care Package” or going into “Residential Care”. Both types of aged care include a basic fee and an income tested fee. In addition residential care has extra fees such as an accommodation payment or increased daily care fees.
As was the case under the former aged care system it does pay to shop around rather than being forced into an age care facility due to personal circumstances. This is because, as was the case under the former system, an age care facility can still take all of the assets of a resident and leave them with only $40,000.
Below are the key terminologies in the aged care system:
- Refundable Accommodation Deposit
- Daily Accommodation Payment
- Refundable Accommodation Contribution
- Daily Accommodation Contribution
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