There may be three types of payment to be made.
1 All residents pay a Basic Daily Care Fee.
The daily care fee is a flat standard resident contribution fee of 85% of the age pension.
2 A Care Fee – Means tested
Residents may also be required to pay an addition Means Tested Care Fee
This amount will be determined by a resident’s assessable income and assists and the level of care that the resident will require.
This payment will be capped annually- Centrelink will determine what a resident will pay, using the same rules as those that apply to the pension.
Note: Everyone is required to complete this Means Tested assessment.
3 An Accommodation Payment – Means tested
Residents may be asked to pay towards their aged care home accommodation costs depending upon their income and assets (means tested)
- Refundable Accommodation Deposit (RAD)
- Daily Accommodation Payment (DAP)
- a combination of RAD and DAP
Residents will have up to 28 days after entry to decide how to pay for their accommodation and if no election is made, the resident must pay by a DAP. Where the resident chooses to pay a RAD, they have up to 6 months after entry to pay the lump sum. Interest is payable on the outstanding amount from the date of entry.
The RAD will be converted to the equivalent DAP using the MPIR
The calculation of the DAP and RAD is worked out as follows:
- DAP = (RAD x MPIR)/365
- RAD = (DAP x 365)/MPIR
Where the resident is paying a combination of RAD and DAP, the DAP can be deducted from the RAD. In this case, as RAD will be depleting over time, The Willochra Home will increase the DAP to ensure we continue to receive the equivalent daily amount.
No accommodation contribution is payable where:
- A resident’s income is below the lower threshold
- A resident’s assets are below the lower threshold
See the Government’s My Aged Care website for The Willochra Home’s Maximum accommodation payment amount.
Further Information For Residents and Carers.
New rules governing accommodation payments became effective on 1 July 2014. Residents who enter permanent care at The Willochra Home with an Aged Care Assessment Team approval for residential care after 1 July 2014 have a choice of paying a Refundable Accommodation Deposit (RAD) or a Daily Accommodation Payment (DAP) or a combination of both. Residents may change their choice of payment up to 28 days after admission.
What is a Refundable Accommodation Deposit?
A Refundable Accommodation Payment is an amount of money paid by a resident for entry to residential care. The balance of the Refundable Accommodation Payment (after agreed deductions have been drawn down)will be refunded to the resident or their estate on termination of the agreement for residential care services.
What is a Daily Accommodation Payment?
A Daily Accommodation Payment is an amount calculated by converting the Refundable Accommodation Deposit payment into a daily charge using the maximum permissible interest rate that applied at the time of admission. Under the previous accommodation bond rules, this was known as a periodical payment. The method of calculating the daily amount has not changed under the new rules.
How is the Refundable Accommodation Payment Determined?
The amount of the refundable accommodation payment is set for each type of accommodation offered by The Willochra Home. See the Accommodation page for details. The amount that each resident pays as a refundable payment is included in the new means tested care fee calculation.
Does The Willochra Home Keep Any Money From the Refundable Accommodation Payment?
Normally there will be no deductions from the capital value of the refundable accommodation payment while the resident is in care. Residents who choose a combination of RAD and DAP may elect to have the amount of the daily accommodation payment deducted from the capital balance of the refundable accommodate deposit.
Are There Minimum Assets that a Resident Must Be Left With?
Residents cannot be charged a Refundable Accommodation Payment if it would leave them with less than the permissible asset of 2.5 times the annual pension. A supported resident will not be asked to pay a refundable accommodation payment because they have assets less than this value.
How Long Does the Resident Pay the Refundable Accommodation Payment?
Refundable Accommodation Payments can be paid up to 6 months from the date of entry. Interest is calculated daily from the date of entry for unpaid RAD and invoiced monthly. Residents may change their mid about options for paying a RAD, DAP or combination up to 28 days after admission.
What is the Rate of Interest?
The interest rate for unpaid RAD is determined by the Australian Government, and is based on the Treasury Yield Note. The current rate of interest will be shown in the key features statement for each type of accommodation available.
What Are My Choices For Paying an Accommodation Payment?
Accommodation payments can be paid as lump sum amounts, by daily payment or a combination of both. Where accommodation payments are paid by a combination of RAD and DAP, the amount and frequency of the payment will be advised in the offer of accommodation payments are non-refundable.
When Are Refundable Accommodation Payments Returned?
As autlined in the Resident Agreement that is supplied on admission, we guarantee repayment pf the refundable accommodation payment balance in accordance with the following criteria:
- The person being cared for dies, or
permanently moves out of The Willochra Home
- The Care Home ceases o ve certified under the Aged Care Act.
What if I Choose Not to Have a Means Test Assessment?
If residents provide insufficient information to calculate the Means Test Amount the Means Tested Care Fee will be the total care subsidy + primary supplements.
The Willochra Home has also in place a “Deed of Guarantee”. Residents may be asked to provide a Guarantor if the Refundable Accommodation Deposit is less than 25% of the price of the room and the remaining 75% is to be paid by the Daily Accommodation Payment.
The changing landscape of Residential Aged Care and Home Care heightens the need for people to seek financial advice