AGED CARE TERM EXPLAINER

Recently there have been significant changes in Aged Care, with more expected in the coming years. The Federal Government legislation “Living Longer Living Better” came into force on 1 July 2014, with the aim of increasing transparency in Aged Care. However, despite this admirable goal, in the short term it appears quite complex. This document is intended as a brief introduction to this complex area, but does not delve into all the nuances of the sector. However, if you would like more information please do not hesitate to call on 1300 889 338 or email us at enquiries@seniorsfinance.com.au, and we can either assist or introduce you to an expert in your local area.

The following clarifies what the majority of homeowners will be required to pay should there be the need to move into Aged Care.

 

Fee

 

What this covers

 

How it works

Refundable Accommodation Deposit (RAD)

This is effectively a room accommodation fee.

 

It does not cover your care costs.

The RAD is paid as a lump sum, and is refunded to you or your estate when you leave care. In metropolitan areas, this could typically be in excess of $400,000.

Only the lump sum is refunded and it does not accumulate interest.

Daily Accommodation Payment (DAP)

This is effectively a room accommodation fee.

It does not cover your care costs.

The DAP is paid daily, and would approximately cost

$65 per day (based on a RAD fee of $400,000)*. This is not refundable.

RAD and DAP combined

This is effectively a room accommodation fee.

It does not cover your care costs.

This method has two options:

  1. Partial payment of both.
  2. Drawing the DAP from the RAD.

Daily Bed Payment (DBF)

The cost of your bed in care.

Rate is set at 85% of the base aged pension, and is payable by all residents.

Means Tested Care Fee (MTCF)

This is a contribution towards your care costs.

The amount you are required to pay is based on your income and assets, with an annual cap of $25,431.05 and lifetime cap of $61,754.55. These amounts are indexed and based on November 2015 statistics*.

Additional Services Fee

These pay for any extras required, such as Foxtel or a glass of wine with dinner.

 

 

 

 

 

 

 

IMPORTANT NOTICE: This information may change from time to time. This information has been prepared without taking account of the objectives, financial situation or needs of any particular individual. Applicants should consider their own circumstances and, if necessary, seek professional advice. Applications are subject to loan approval criteria. Terms, conditions, fees and charges apply. Credit provided by ASF Custodians Pty Ltd. Please note the information set out in this document may change from time to time. Please retain this insert for future reference. Australian Credit Licence Numbers: Australian Seniors Finance Pty Ltd - 386760 (ACN 108 875 636) / ASF Custodians Pty Ltd

- 386781 (ACN 106 822 780)

*Please note the information (including rates, fees and charges) set out in this document may change from time to time. Please retain this insert for future reference. Information has been sourced from http://www.myagedcare.gov.au/ as at June 2018.

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