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How Much More Expensive Will Aged Care Be For Me?

How Much More Expensive Will Aged Care Be For Me?

 From July 1, changes to aged care will make aged care more expensive for most people.

The number of people aged 65 and over is expected to increase from 13.4 percent in 2014 to 25.3 per cent by 2047. Making the demand for Aged Care services in Australia huge.

Part of Government reasoning for the aged care reforms is to prepare for the increasing demand for aged care services over the next 40 years.

Under the new scheme, residents under the new system will be categorised into three payment options depending on their assets and income. This is similar to the current three category system however, the cost of care is likely to be more expensive becasue of assets now being included in determining the residents financial standing. Depending on which category you land in, you will either pay nothing towards the cost of your care, a little bit, or the full amount.

The system will work as follows:

 

Fully Supported Resident - If you have assets of less than 44,000 and an income of less than 20,700 you won’t have an accommodation payment at all.

 

Partially Supported Resident- If your assets are $144.500 and income is less than $59,101 you will have a reduced accommodation payment but the facility doesn’t have to take you if you can't fund the full amount of the bond yourself.

 

Not Supported Resident- If your assets are above $144, 500 and income greater than $59,000 you will have to pay the full accommodation payment and some of this payment may go towards helping others.

 

Examples - Under the new Scheme

The inclusion of your assets in your Centerlink assessment will likely mean that you will pay more for care after July 1 2014. . .

 

A fully supported (poor Australian) resident will be $90 per year worse off because of the inclusions of assets.

An average resident who sells their home for $650,000, pays bond of $400,000 and invests the rest at 3.5% will be $7,611 per year worse off.

A middle class resident who rents their home for $500 pw, pays bond of $400,000 using savings will be $6,672 per year worse off.

Posted: 16-Jun-2014. Author: Jordie Cox

 

 
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