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5.3.3 How is the income-tested care fee calculated

The income-tested care fee is calculated at the rate of 50 per cent of income above the income free area (IFA) applicable to the person.

5.3.3.1 Caps for income-tested care fees

There are caps on the amount of income-tested care fee certain people can be asked to pay. Once these caps are reached, the Government will pay all fees for the person.

  • Full pensioners (or people with equivalent income) pay no income-tested care fees.
  • Part-pensioners and people with equivalent incomes have their income-tested care fees capped at $5,000 per year.
  • Self-funded retirees have their income-tested care fees capped at $10,000 per year.

There is also a lifetime cap of $60,000 for income-tested care fees, the same cap that applies to means tested care fees for residential care.

If someone transfers to Home Care from residential care, the means tested fees they have paid in Residential Care will count towards their annual and lifetime home care cap, and vice versa. If the person transfers to Home Care and they have paid in excess of any of the Home Care caps, they will not be asked to pay any more income-tested care fees but will not receive any refund for an amount in excess of the Home Care cap.

The Department of Human Services (DHS) will let the person and their provider know when the person has reached one of the caps above.

For more information about the relevant caps, please see the Aged Care (Subsidy, Fees and Payments) Determination 2014 on Comlaw at: http://www.comlaw.gov.au/Series/F2014L00875

5.3.3.2 Requesting an income assessment

For residents who are receiving a means-tested income support payment, the income details from the pension assessment are provided by DVA or Centrelink to DHS.

Self-funded retiree residents will be sent the Centrelink form ‘SA456 Aged Care Fees Income Assessment’ to collect their income details. If residents choose not to submit an income assessment, they may be required to pay a higher fee.

5.3.3.3 Variation in income-tested care fees

Changes to a person’s income will result in changes to the income-tested fee. DVA will use the information collected for income support payment purposes to update a resident’s income for aged care purposes.

A self-funded retiree should advise Centrelink (or DVA if applicable) of any changes in their circumstances.

A care recipient’s contribution toward the cost of a Home Care package if the person has sufficient income.

The income free area is the amount of income that an income support pensioner may receive without suffering any reduction in pension under the income test.

A care recipient’s contribution toward the cost of a Home Care package if the person has sufficient income.

A lifetime maximum on means tested care fees and income tested care fees. Once a resident reaches the lifetime cap they will no longer pay any means tested or income-tested care fees and the Government will pay for their care costs.

An extra contribution towards the cost of care that residents may need to pay depending on their income and assets and their care needs.