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In Care Assessment Rules

Document
Last amended 
5 December 2016
Illness separated couples entitled to single rate of pension

Where one or both members of a couple are 'in care', they may be determined to be an illness separated couple. Members of an illness separated couple are entitled to be paid the higher single rate of pension.

In order for the definition of illness separated couple to be met, the couple must be living apart due to the illness or infirmity of one or both members of the couple.    

 

Homeowner's basic assessment rules

    

 

If the person was previously a homeowner and has retained that home, for the purposes of the pensions assets test the residence the person vacated to enter (or provide) care will continue to be regarded as the person's principal home. The home therefore remains exempt from the assets test assessment and the lower assets value limit applies.

The homeowner rules apply for the following periods:

  • up to 2 years beginning from the day the person starts to be 'in care',
  • as long as the person's partner resides in that home,
  • up to 2 years beginning from the day the partner leaves the home to be 'in care', or from the partner's date of death,
  • for as long as the aged care resident is paying (or there is a liability to pay) daily accommodation payment or a daily accommodation contribution an accommodation charge or all or part of an accommodation bond by periodic payments and rents out the former home and entered care before 1 January 2017.

In these cases, the home is exempt from the assets test and the rental income is exempt from the income test.     

 

The homeowner rules also apply for up to 2 years while the person is absent from the residence and is personally providing community-based care for another person.

The non-homeowner rules will apply once the exemption period expires. If the person still owns the former home, it may be counted as an asset.

Renting the former home during exemption period

    

 

If the home is rented out during the exemption period, the home remains an exempt asset, but net rent is counted as income, unless the special rules that apply for some aged care residents are triggered. The special rules mean that any rent received is not assessable, and are triggered where the person entered care before 1 January 2017 and is paying (or there is a liability to pay):

Selling the former home during exemption period

If the home is sold before the end of the exemption period, the person will be assessed as a non-homeowner. This applies even if another house is purchased with the proceeds of the sale. This is because a house is only able to be exempted from assessment where it is the former principal home of the person entering care. Where the person has never lived in the house, this definition cannot be met and the value of the new house must be included in the pension assessment. However, this does not apply when the partner of the person in aged care still resides in the new house. This is because the continued occupancy of a home by the spouse establishes it as a principal home for both members of the couple and for the partner in care, homeowner status is retained.

Test of “liability to pay”

    

 

The test to be applied in these cases of former principal home and rental exemption is that the person has a “liability to pay” at least a part of the accommodation costs periodically. This liability to pay arises out of the resident agreement which is regulated under the Aged Care legislation and agreed by both parties. The agreement should specify the frequency of any periodic payments, how they are to be calculated, and any other matters of interest to both parties.

The resident agreement protects the interest of both the resident and the provider.  As such, the preferred method for confirming a “liability to pay” accommodation costs periodically is that the arrangement is part of a valid resident agreement.  If the agreement does not indicate periodic payments, but the resident informs DVA of changed payment arrangements with their provider, the delegate should request evidence to that effect.  This could be validated by a letter from the facility outlining the specifics of the periodic payment commitments, and/or the resident’s bond or fee statement/s showing actual payments being made and accepted. The delegate may consider that an informal arrangement exists for the payment of some of the amount periodically if they are satisfied with the documentation provided.  

It will also be necessary for the parties to enter into a revised resident agreement, meeting the requirements of the Aged Care legislation, and which provides for at least some payment of the accommodation costs by periodic payments.    

 

Non-homeowner's basic assessment rules

If the person was not previously a homeowner, has not retained that home, the exemption period has expired, or the person no longer meets the required conditions, the person is a non-homeowner. The high assets value limit applies to non-homeowners.    

 

Pre 1 October 1997 rules

Pensioners who were already residing in hostels, or entered hostels before 1 October 1997 may be assessed under the pre 1 October 1997 nursing home rules (home exempt for two years), or hostel (entry contribution) rules, whichever is to their advantage.    

More →

 

Reference Library – Departmental Instructions – Aged Care Reforms – Homeownership Status

DI/C12/1998

 

More → (go back)

 

Rent assistance eligibility

    

 

A person who is in care may, in some circumstances, be eligible for rent assistance. Their eligibility may depend on whether or not the accommodation cost is Australian Government subsidised, the type of care they are receiving and whether the rent assistance criteria are met.

Where the person is eligible for rent assistance, only the portion of rent that is payable for their accommodation is treated as rent for rent assistance purposes. If the component cannot be identified, then two-thirds of the total amount paid is treated as rent.

Aged care residents are not eligible for rent assistance. This is because the rent assistance criteria require that a person is not an aged care resident.

A person in respite care is not regarded as an aged care resident. They are therefore eligible for rent assistance, provided that the rent assistance eligibility criteria are met. 

 

Fees payable in respect of home care packages are not considered rent and therefore do not attract rent assistance.

 

Type of “in care” situation

Rent assistance eligibility

An approved place in an Australian Government funded aged care facility i.e. Aged care resident

Not eligible

Accommodation not subsidised by the Australian Government, or the State Government for example, community-based care or other Non-Government subsidised care

May be eligible*

Receiving nursing home type care in a hospital     

More →

 

Nursing home patient in a hospital (NHTP)

9.2.4/Types of Care Situations

 

More → (go back)

 

Eligible in respect of any money paid for their accommodation.

Respite care

May be eligible*

Personally providing community based care

May be eligible - in respect of any rent that continues to be payable for the person's usual principal home

 

*All eligibility criteria must be met for rent assistance to be payable. Where an approved care provider is receiving an Australian Government subsidy in respect of a person, then they will not be eligible for rent assistance.

Assessment of accommodation payments

A lump sum accommodation payment is exempt from assessment under the pension assets test.

The accommodation payment balance is exempt under the assets test while the person remains in care. However, if a person leaves the aged care facility, the refunded amount may be assessed as a financial asset, (depending on what the person has done with the funds), and deeming provisions may apply.    

More →

 

Impact of leaving care on accommodation bonds and information on deeming provisions

9.2.7/Departure from Aged Care

 

More → (go back)

 


 

An illness separated couple is a couple who cannot share a home because of the illness or infirmity of one or both partners. Illness separated couples may be paid the higher single rate of pension. Refer to subsection 5R(5) of the VEA for the full definition.

 

 

Most income support pensions and many of the associated allowances are paid at different rates depending on whether the recipient is partnered or single.  Typically, the single rate is higher than the partnered rate since single persons do not benefit from the economies of pooling their resources with another person.

 

 

A payment for accommodation costs worked out by converting the refundable accommodation deposit (RAD) to a daily amount, which is payable as a periodic amount by aged care residents.

A payment for accommodation that accrues daily and is payable as a periodic amount by aged care residents for whom the Government is also making a contribution.

An accommodation charge is an additional daily fee, which is paid by person's residing in ACAT approved permanent High Level Care.

It is paid in addition to the standard resident daily care fee and any additional income tested fee, which may apply.

Accommodation charges are payable for as long as a resident remains in care.  For those residents who entered care prior to 1 July 2004 the accommodation charge is limited to a maximum five years.

 

See Also:

http://clik.dva.gov.au/glossary/acat - defintion of ACAT

http://clik.dva.gov.au/glossary/high-level-care - definition of 'High Level Care'

 

 

An accommodation charge only applies to those persons entering an aged care facility prior to 1 July 2014.

 

 

An accommodation bond is an amount of money paid by Low Level Care and Extra Service Care residents in an aged care facility. An accommodation bond may be paid as a lump sum, or by periodic payments, or a combination of both lump sum and periodic payments.

The provider can deduct a monthly retention amount, for a maximum of 5 years, from the accommodation bond. The monthly retention amount is a fixed amount specified in the accommodation agreement and cannot exceed the capped maximum amount applicable at the time of entry to the facility. The provider also retains any interest derived from the bond.

The balance of the lump sum accommodation bond is refundable to the resident or their estate on departure.  The refunded accommodation bond balance is an assessable asset.

If there is a liability under the accommodation bond agreement for the bond to be paid wholly, or partly by periodic payments and the former principal home is rented out, then both the former home and the rental income are exempt from the income and assets tests.

 

 

A payment for accommodation costs worked out by converting the refundable accommodation deposit (RAD) to a daily amount, which is payable as a periodic amount by aged care residents.

A payment for accommodation that accrues daily and is payable as a periodic amount by aged care residents for whom the Government is also making a contribution.

An accommodation charge is an additional daily fee, which is paid by person's residing in ACAT approved permanent High Level Care.

It is paid in addition to the standard resident daily care fee and any additional income tested fee, which may apply.

Accommodation charges are payable for as long as a resident remains in care.  For those residents who entered care prior to 1 July 2004 the accommodation charge is limited to a maximum five years.

 

See Also:

http://clik.dva.gov.au/glossary/acat - defintion of ACAT

http://clik.dva.gov.au/glossary/high-level-care - definition of 'High Level Care'

 

 

An accommodation charge only applies to those persons entering an aged care facility prior to 1 July 2014.

 

 

Nursing Home type services which provide a higher level of care for people who need continuous nursing care as well as help with personal care.

Services in this category include:

  • Specialised furnishings and equipment items (such as those to assist with mobility);
  • Basic medical and pharmaceutical supplies and equipment;
  • Nursing procedures;
  • Administration of medication;
  • Provision of therapy services; and
  • Oxygen and oxygen equipment on a short term or episodic basis.

High level care is also known as Category 1-4 care.

An accommodation bond is an amount of money paid by Low Level Care and Extra Service Care residents in an aged care facility. An accommodation bond may be paid as a lump sum, or by periodic payments, or a combination of both lump sum and periodic payments.

The provider can deduct a monthly retention amount, for a maximum of 5 years, from the accommodation bond. The monthly retention amount is a fixed amount specified in the accommodation agreement and cannot exceed the capped maximum amount applicable at the time of entry to the facility. The provider also retains any interest derived from the bond.

The balance of the lump sum accommodation bond is refundable to the resident or their estate on departure.  The refunded accommodation bond balance is an assessable asset.

If there is a liability under the accommodation bond agreement for the bond to be paid wholly, or partly by periodic payments and the former principal home is rented out, then both the former home and the rental income are exempt from the income and assets tests.

 

 

Rent Assistance is an allowance, which may be paid to a service pensioner or income support supplement (ISS) recipient to assist in meeting the cost of rental accommodation.

To receive rent assistance, a pensioner must be paying rent (other than Government rent) for accommodation in Australia, and the amount paid must exceed a certain threshold.

Non-Government Subsidised care applies to the following groups:

  • pensioners residing in nursing homes or hostels that are not approved facility;
  • pensioners who are residing in a nursing home or hostel but who are not approved care recipients. For instance, a person may be residing in a nursing home or hostel to be near to their partner who is receiving care (known as co-habitees) or a person may be in a multi purpose service (MPS) unit; and
  • pensioners residing in an approved facility but who receive accommodation only, require no care and therefore are not receiving Commonwealth Government subsidised care.

No Commonwealth Government subsidy, including pensioner supplement, is payable to the facility in respect of their places.

 

 

An amount payable by care recipients for their accommodation costs in an aged care facility. Post 1 July 2014, accommodation payment refers to the amount payable by those who are not eligible for Government assistance towards their accommodation costs. It is also used as a collective term for accommodation bond and accommodation charge.

One element of the means test for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their assets increase above a certain threshold known as the assets value limit (AVL).