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Maggie Beer Addresses New Centrelink Rules

October 29, 2014 0 Comments

Maggie Beer is looking into improve the new Centrelink regulations and procedures that affect the quality of life of aged care home residents. What a wonderful advocate for improving aged care!

According to the celebrity cook, “[aged care home residents face] low budgets, huge complexity and some mind numbing regulations.”

The Maggie Beer Foundation has conducted extensive research on how to better the regulations and make it easier for the elderly to plan their residency with an aged care home. Using the information their foundation has gathered, Maggie Beer introduced a step-by-step guide which will help cut through the complexities.

New Regulations

On July 1, new regulations came into effect on how the government assesses its funding, removing the distinction between high and low level care. It also introduced a new system on how to pay accommodation bonds.

According to aged care adviser and managing director of Joseph Palmer & Sons, Rodney Horin, “The new rules have had the effect of making the industry even more complex. The new Centrelink form itself is 32 pages long and involves answering 144 questions.”

The First Step

The aged care process remains the same. An assessment of what type of care is needed, whether it is at-home or in accommodation and the qualified funding, are all done as previous years.

Andrew Larpent, Chief Executive Aged Care Provider at Southern Cross Care, describes the first step as, “Known as an Aged Care Assessment Team (ACAT or ACAS) assessment, this determines eligibility for aged care and can be arranged by your local doctor.”

Paperwork

Before one can complete the Centrelink assets and income test, it is pertinent to get financial advice first. This is because there are many different ways to arrange finances, most of which will affect your aged care fees.

The family home, for instance, has some exceptions. If you rent out your family home, rental income will be counted in the income test. If it is sold, any money from the sale will be counted as a financial asset and can reduce the Age Pension entitlement which will then increase any ongoing fees.

New Asset Test

Before, there were two separate tests to determine your income and assets. Now, there is only one test.

Ipac Chief Executive Patrick Canion says, “The key to dealing with these new rules is to work out what the assets are and how best to use these to get the best result.”

According to Canion, what you do with your family home is a large factor which will affect your potential aged care fees.

Canion says that if a resident owns a home worth $700,000, is receiving a full Aged Pension, and has around $150,000 in other assets – the difference could mean an extra cash flow of $20,000 per year if their home is rented out.

Accommodation Fees

Accommodation fees, also known as accommodation bonds or bed fees, are now called Residential Accommodation Deposits (RADs).

Each home will have its own RAD amount. However, charges are regulated by the government and anything above $550,000 will require their approval.

Ian Campbell, managing director of KeyInvest, says “The quoted prices are maximums so there may be some wriggle room to offer less but be wary of doing so, as there is a good chance that there is a waiting list.”

“There may also be benefits in paying a higher entry cost as lump sums are an exempt asset for age pension purposes,” he added.

Three Types of Costs

In aged care accommodation, there are three main types of ongoing fees involved that residents need to be aware of:

  1. Basic Daily Fee – Set by government and around 85% of Age Pension.
  2. Means-Tested Care Fee – Calculated on your income and assets test by Centrelink.
  3. Extra Service Fees – Extra services required, will vary from home to home.

Still, the biggest financial burden for the elderly is the accommodation cost. Accommodation costs can go as far as $2 million, but are averaged around $500,000. If this fee can’t be payed in a lump sum, an equivalent interest rate will be paid as an on-going fee (or a combination of both).

Ian Campbell states, “To calculate the amount someone pays toward their care can involve up to 15 separate calculations so it really can be complex and confusing.”

“The decisions made about how to pay the entry cost (accommodation deposit) cannot only significantly affect how much you will contribute but will also impact on existing pensions entitlements,” Campbell finished.

With ongoing passion and focus on the aged care system, people like Maggie Beer will help to truly make a difference in the lives of aged care home residents.

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