Financial considerations, fees and costs associated with entering aged care
The following information is provided to give residents and their families a basic understanding of the many and varied financial and legal considerations and requirements when a person enters residential care at Edgarley Assisted Living. This information can seem overwhelming, lengthy and difficult to understand. If you have questions or would like clarification about any of this information, please contact the Chief Executive Officer. Incoming residents are always encouraged to seek independent advice.
WHERE TO START:
It is recommended new residents seek assistance from appropriately qualified professionals to be fully informed about the financial considerations of the aged care industry before committing to a move. Please contact the Edgarley Assisted Living Chief Executive Officer to arrange an appointment and discuss your financial position as there are several options available and a suitable financial arrangement can be tailored to suit your requirements.
Information regarding moving into aged care can be found on the Federal Government website www.myagedcare.com.au or
All incoming residents to Edgarley Assisted Living will need to complete the Centrelink form Permanent Residential Aged Care Request for Combined Assets and Income Assessment. This form outlines income, assets and liabilities and is the basis for our financial negotiations. The form can be found on the Centrelink website or is available from the Edgarley Assisted Living office.
The following information outlines the processes and financial requirements when entering care at Edgarley Assisted Living. If, at any time, you require this information explained, please contact the Chief Executive Officer.
AGED CARE ASSESSMENT:
The first step to move into an aged care facility is to have an aged care assessment undertaken. These assessments are conducted by an independent body (Aged Care Assessment Services) and determines a person’s care needs and their ability to access Commonwealth funded residential care or respite care.
These assessment interviews cover a series of topics and include: any limitations, assistance, current medical diagnosis, living environment, cognitive and psychological behaviours, nutrition, mobility and other factors. The assessments involve a one on one meeting with a potential resident and it is highly recommended if the resident could be supported through this process by having a family representative with them during the interview.
An ACAS assessment will only need to be undertaken once. To arrange an ACAS assessment contact ACAS on 03 5561 9300 or go to the Myagedcare website and complete the process online.
Following the ACAS assessment, incoming residents will be approved for care as one or more of the following care services provided by Edgarley Assisted Living:
Respite is designed for people who require care for a shorter, less permanent reason, ie recovery from a hospital stay, a carer going away, and the requirement of some short-term assistance. Eligible persons are allocated approximately 63 days per financial year of respite care, dependent on their individual status (i.e pensioner, Department of Veterans Affairs (DVA) etc.) Respite care residents are classified as either low or high care. Respite residents will not be asked to pay any accommodation payments. Edgarley Assisted Living charges the daily care fee for respite care residents. You can find more about our respite care services HERE
Residents are assessed as requiring permanent residential care by the ACAS process. There is no longer a classification of high or low care as the level of the care required will be determined through the Aged Care Funding Instrument (ACFI) conducted by Edgarley Assisted Living staff. This assessment is a set procedure defined by Medicare and Edgarley and is subject to independent audits to ensure Edgarley is applying the correct assessment criteria for each resident. You can find more about our aged care services HERE or by downloading our Incoming Resident Handbook.
EDARLEY ASSISTED LIVING’S EQUITY STATEMENT:
Edgarley gives an undertaking, endorsed by the Edgarley Home Inc Board of Management, that no person requiring our services will be denied entry based on their financial position. Edgarley is a community-based organisation that exists to serve the community and it takes this guiding principle to heart.
If you require care, please contact Edgarley and to discuss your situation and reach an agreement that is suitable for all parties.
NEGOTIATION OF FEES:
Edgarley has a number of set fees in place to ensure quality care is provided to all of its residents. Some of these feeds are set, some are determined by each individual’s financial position and some are determined by supply and demand, the current market environments. Edgarley is open to, and will, negotiating with you the set fees to ensure a suitable arrangement for both parties can be achieved.
As part of the move into aged care, there is a requirement to establish the level of Refundable Accommodation Deposit (RAD) a resident may need to pay. Please refer to information below for an explanation of RADS. The level of RADS for Edgarley – set at $300k and $180k – is a maximum figure, and not what has to be paid.
To enable your transition into aged care, Edgarley will need to establish a level of RADS. While Edgarley has a set a RADS amount, this is not a set figure and we will negotiate with you to come to an arrangement suitable for both parties. Edgarley will always negotiate in good faith. Edgarley will always have its equity statement about providing care to all people, irrespective of their financial position, at the base of its negotiations.
UNDERSTANDING EDARLEY’S RESIDENTIAL CARE COSTS
The following information outlines the fee structures applied to incoming and existing residents of Edgarley Assisted Living.This information is correct as of October 2018.
DAILY CARE FEE:
The daily care fee is currently $53.56 and is set by the Federal Government. All residents entering an aged care facility anywhere in Australia will pay the daily care fee. The fee is adjusted twice a year in line with pension increases.
REFUNDABLE ACCOMMODATION DEPOSITS (RAD):
All aged care facilities across Australia, by law, must determine a pricing for their rooms and lodge these prices on the Government’s myagedcare website. Edgarley has determined the following prices: $300k for rooms in the Edgarley, Cheers, LAW and William Anderson Wings, and $180k for rooms in the Coulter Wing. These are the maximum amounts Edgarley can charge a resident. The final and total amount will be negotiated between the facility and each resident and/or their representatives.
If a resident chooses to make your payment as a lump sum, this is called a RAD. A RAD works like an interest-free loan to an aged care facility. The balance of the RAD is refunded to the resident or their estate, less any agreed amounts have been deducted, on leaving the facility.
The Federal Government, through Centrelink or Department of Veterans Affairs, will conduct an assessment of an individual’s income and assets and they will advise the individual and the aged care facility the level of fees and charges required to be paid.
If this assessment requires a resident to pay for accommodation, there is a number of choices as to how that will be paid.
Residents can choose to pay the accommodation payment as a lump sum payment (RAD), a payment schedule (DAP) or a combination of the two.
If a resident is required to pay an accommodation payment, they will have 28 days from the day they enter care to decide on the payment method. Aged care facilities cannot refuse you a place based on how you want to pay for your accommodation.
Until the ongoing payment method is decided, residents will be charged Daily Accommodation Payments while in care.
DAILY ACCOMMODATION PAYMENTS (DAP):
Based on Edgarley Assisted Living’s RADS of $300k and $180k, the DAPS equates to $54.98 per day and $32.99 per day, respectively.
Instead of paying for accommodation as a lump sum, residents can choose to pay this accommodation charge as periodic payments. The amount charged is based on a daily rate, known as the Daily Accommodation Payment (DAP). Edgarley invoices residents for DAPs on a fortnightly basis and may be charged one month in advance. DAPs are not refundable if a resident leaves Edgarley. DAPs paid in advance will be returned on departure.
Residents may choose a combination approach to paying the total RAD amount. This means residents may choose to make these DAPs out of the lump sum RAD amount. This will mean that the total amount in your RAD will be reduced over time as your DAP is deducted and reduce total funds returned to the resident or Estate on leaving Edgarley.
As the RAD is reduced, Edgarley Assisted Living may ask residents to ‘top up’ their RAD or pay a higher daily accommodation payment during the course of care. The following calculations are a guide to how this may impact your RAD:
RAD and DAP Calculations:
RAD = $300,000
DAP Calculation – RAD x Maximum Permissible Interest Rate (MPIR) / 365
= $300,000 x 6.6% / 365
= 54.25 per day.
RAD = $180,000
= $180,000 x 6.6% / 365
REFUNDABLE ACCOMMODATION CONTRIBUTIONS (RAC):
This payment is similar to a RAD, but applies only when a person who is receiving Australia Government assistance with their accommodations costs, makes a financial contribution towards their accommodations costs.
DAILY ACCOMMODATION CONTRIBUTION (DAC):
This is the contribution residents would need to pay, if they are also receiving Australian
Government assistance costs. This amount equates to the Daily Accommodation Payment, less the Government assistant amount.
MAXIMUM PERMISSIBLE INTEREST RATE (MPIR):
The MPIR is set by the Federal Government and is the maximum interest rate a facility may charge on RAD and/or DAP outstanding monies. If this charge is to be used, Edgarley can negotiate with a resident to determine a rate acceptable to both parties.
The MPIR is altered in line with pension payments reviews that occur twice per year. The MPIR is reviewed on a quarterly basis and can vary in any given year.
MEANS TESTED CARE FEE:
This refers to an extra contribution towards the cost of care that residents may need to pay, on top of the daily care fee. The means-tested fee is based on an income and assets assessment undertaken by Centrelink through its Permanent Resident Aged Care Request for a Combined Assets and Income Assessment form.
Residents can choose to pay for their accommodation as a part lump-sum RAD and part DAP. The DAP can be deducted from the RAD. The same applies to the payments of RACs and DACs. Please refer to the specific parts of this financial information for clarification.
INCOME AND ASSET ASSESSMENT:
Any person entering an aged care facility in Australia will need to complete The Residential Aged Care Request for a Combined Assets and Income Assessment form. A copy is attached to this document. You may seek assistance with this form through Centrelink or the Department of Veteran Affairs.
ANNUAL AND LIFETIME CAPS:
The Federal Government has caps in place for the maximum amount of money a resident will be charged each year for costs associated with residential care. Details of these capped amounts are explained below:
Annual Cap: The maximum means-tested care fee a resident can be asked to pay each year is $25,000. This cap amount is indexed. Once this cap is reached, a resident cannot be asked to pay any more means-tested care fees until the next anniversary of the date of their first entry into an aged care facility.
Lifetime Cap: The maximum means-tested care fee a resident can be asked to pay is $60,000 in their lifetime. This cap is indexed. When a resident has reached this lifetime cap, they cannot be asked to pay any more means-tested care fees.
NOTE: The annual cap may see some residents paying fees and then stopping for a period of time during a year; paying again when their care anniversary comes around, then stopping for the remainder of the year; or starting to pay again an stopping once the resident reaches their lifetime cap.
Aged Care facilities may choose to negotiate with residents to provide extra or higher standards of service. These may include upgraded accommodation, hairdressing, pay TV in rooms, exclusive menus or a range of other services. If and when Edgarley Assisted Living chooses to offer these services to residents, residents will be advised.
Any resident who is deemed to have assets valued below $40,500 and an income below $22,701 is a fully supported resident.
Once the assets or income exceed these thresholds assessments as outlined in these financial pages will come into place. The government will pay the difference between the resident contribution and up to $50 as supplement.
Non-supported residents are those residents who have assets above $40,500 and income above $22,701. The following formula is utilised when determining the costs charged to incoming residents.
50 cents per dollar above $22,701.
17.5% of assets between $40,500 – $144,500.
SELF FUNDED RETIREES:
Care contributions are income and asset-tested. Residents can be asked to pay more than their cash flow and there is no daily limit, however, the maximum cap limits of $25,000 (annual cap) and $60,000 (lifetime cap) will apply.
Residents will be required to enter into a signed agreement with their Edgarley Assisted Living upon entering care. The agreement will set out all the rights and responsibilities of the residents and Edgarley, along with all financial arrangements for the duration of a resident’s stay. A copy of this signed agreement will be given to the resident.
This information is provided to act as a guide only. It is not to be relied upon in making of any decision by any person. The information provided in this document is based on current advice from the Department of Social Services. The contents of the information may change from time to time and it is up to the individual to make themselves available of up to date information.
Before any person reading this information decides to move into aged care they must seek their own independent advice.
ALL INCOMING RESIDENTS SHOULD SEEK PROFESSIONAL ADVICE:
The payment method which is most suitable for each resident will depend on their own personal and financial situation. Edgarley Assisted Living strongly recommends prospective residents seek professional advice from an appropriately qualified person (for example financial adviser, bank advisor, accountant, lawyer) before making a decision on which payment option they choose when entering aged care with Edgarley Assisted Living, or any aged care facility. Researching the option that best suits an individual’s circumstance will make the process of moving into care more enjoyable and without any complications.