What are the tricks, traps & pitfalls?
Moving into a residential Aged Care facility is governed by laws, rules & regulations, determined by 4 different Government departments (Centrelink, Department of Veterans Affairs, Medicare & the Department of Social Services), all of whom have slightly different views to how they see your financial position.
Many people make the major mistake of thinking that a simple financial situation (eg a home a few thousand dollars in the bank) makes aged care, simple. But the bureaucracy of the rules & regulations, are anything BUT simple, & makes this move extremely complicated. It is the interaction of the rules with your financial situation, is where it all unravels. Further complicated by the fact that Centrelink staff (in the main) do not understand aged care, & provide information to the public which is frequently incorrect.
A simple financial situation can be quite complex, but add private companies, or private trusts, to the financial situation & this adds a whole extra dimension on complexity & probably additional cost. Or when there is a partner remaining at home, is also more complex, & the need to get it right is even more important.
- Completing the Means Tested Form for Centrelink (SA457)This form is intended to determine, whether or not the resident needs to pay anything towards their Accommodation in Aged Care, & if so, how much needs to be charged, it also determines the amount of Means Tested Fee, that the resident may be charged. The problem is that the outcome is frequently not correct, & most people would not be aware that the outcome is wrong & consequently they may be paying more for their aged care than they need to. This is due to;
- The form being completed incorrectly
- Centrelink or DVA making mistakes
- Centrelink or DVA ignoring the form & using detail they hold on file for the resident (which is usually out of date)
- The outcome of the form is based on the resident’s situation at the time, before moving into care. However once the resident has moved into care, & paid the Accommodation Payment, by either selling the or renting their home, or selling other assets, or whatever option they select, then the Means Tested Fee can change, as can the Accommodation Contribution
- Therefore, this can mean that a resident who could be a “Supported resident”, might not be supported, & therefore pay more for their aged care than they need to. Or a resident who is assessed as being supported, might not be accepted into the facility of their choice, as they either don’t want supported residents, or have filled their quota of supported residents & don’t need any more, & you might have to go looking for another facility somewhere else.
- Many people will take this form to a Centrelink office, this is NOT a good idea, as it usually becomes lost. There is an address to send it to, on the inside cover of the form, send it to this address & remember to keep a copy of it, as the form is sometimes lost, & you don’t want to have to fill it in again
- So completing this form correctly, & ensuring you understand the issues, & what the outcome SHOULD be, before sending it in to Centrelink can be critical to getting an outcome you desire.
- Listening to other people’s advice It is normal to speak to other people (friends, relatives, neighbours) to get their experience & guidance, however we find that whilst their intentions are good, their knowledge is not.
- There were very big changes to aged care in July 2014, so anyone who went through the experience of putting someone into care prior to this date, will probably be out of touch with these major changes, so any suggestions they have could be completely wrong.
- Assuming that their situation is the same as yours, will often have disastrous consequences. There are situations where we have had clients, who sought our help, & we were able to obtain a great outcome for them, told their friends, who then adopted the same strategy. However, what works for one won’t necessarily be the same for someone else, & then it may be difficult or sometimes impossible to undo, what has been done. Everyone’s objectives, & desired outcomes are different, don’t assume your situation is the same. We have helped over 9,000 people move into aged care over 15 years, & no two people have been the same yet
- Many people do a great deal of research & believe they know it, but in reality, there are many aspects to aged care, that is not in the literature, or not on the My Aged Care website, & hence the crucial bits are missed. (Eg how does the ACFI assessment change the Means Tested Fee- in your case)
- The treatment of the home differs from one Government Dept. to another, & hence we hear people quoting what they believe to be correct, eg saying “but I thought the home is exempt from the assets test” & the answer is well for some people it is exempt, for others it isn’t exempt, & then it depends on for what purpose
- For pension purposes it is exempt for up to 2 years
- For pension purposes, it can be exempt for more than 2 years- depending on how you fund the Accommodation Payment
- For Aged Care Accommodation Purposes, the home is counted for a single person, but not counted for a member of a couple, & then for a single person, who has someone else living at home, it may be counted or may be exempt depending on whether the other person is eligible to receive a means tested pension.
- For Means Tested Fees, the rules are different again
- So, as you can see this is not a simple matter, & if you have made a decision about how to fund your aged care, & not quite grasped this important concept, you could lose your pension, or pay more in Accommodation Payment than necessary, or more in Means Tested Fee than is necessary, & you wouldn’t even be aware that you are paying too much, or not even aware you are not getting enough pension.
- Accepting what Centrelink tells you, about aged care, to be correct.
I would love a dollar for every client that has come back to tell me that that Centrelink told them, that what we have done is wrong, only to later prove that we were not wrong.
The problem is that Centrelink staff have NOT been trained in aged care, & they assume that the rules that apply to pensions, are exactly the same as aged care, & this is NOT correct eg
If a person has moved into aged care retained & rented their home, then they will NOT be required to complete a “Mod R” form for 2 years, & then the home is either exempt or counted as an asset (depending on whether the home is rented & how the accommodation Payment has been paid). I had a client recently who went to Centrelink to fix up her mother’s pension entitlement, & was told that a MOD R form needed to be completed, as the home was being rented (which for pension purposes is correct- but not for pension purposes, when the resident is in aged care). Consequently, her parents lost the pension, AND they had their Means Tested Fees increase. Had she not called me to complain, she wouldn’t have known any different & accepted what Centrelink told them was correct.
I had to take her to Centrelink, & demand a formal “Review” which proved that the MOD R did not need to be completed yet, & the home should be exempt from the assets test & the rent exempt from the income test, & the pension was reinstated, & the Means Tested Fee once again reduced, to what it should have been, but it cost my client more money for me to fix the mistakes that Centrelink had made.
- Starting the Aged Care process, when the detail Centrelink/DVA have about you are incorrect, or out of dateThe very first thing we do with our clients in an “Aged Care Options” appointment, is determine whether the pension entitlement they are currently receiving is correct, because if it isn’t, then the Means Tested Fee could well be too high, & the amount of Accommodation Payment required may also be wrong. Therefore, we need to fix the problems that Centrelink have BEFORE proceeding with Aged Care.When the Means Tested form is completed, & sent in to Centrelink, they may not even look at the detail included in the form, & use the detail they have on file, leading to false outcome, & you wouldn’t even be aware of it.
I can’t give away all our intellectual property for free, that is what people pay is for. Suffice it to say, that knowing how Centrelink, DVA, & the Aged Care system works, is what saves our clients thousands of dollars a year, & we are doing this, every day of the week.
Whether it is getting our clients a pension, when they didn’t think they could, or getting them more pension, or reducing the Means Tested Fee, or improving the cash flow, this is the benefit of getting help, & an Aged Care Options appointment, is the start to getting a better outcome.