Attachment I - Aged Care income support Questions & Answers

QUESTION

ANSWER

Why are my nursing home/hostel fees being income tested?

To meet the increasing need for quality residential aged care from an ageing Australian population.  The Government sees income testing of fees as a fair and equitable way of ensuring those people who are most in need receive the level of care and assistance they require.

When will I start paying income tested fees?

People who enter aged care from 1 March 1998 will commence paying income tested fees 28 days after entering aged care.

Has the Government deferred the income testing of aged care fees?

No.  A 28 day period of grace will apply so that you have sufficient time to organise your financial affairs.

This additional period will be available to you irrespective of how long after 1 March 1998 you enter aged care.

What do you mean my nursing home/hostel fees will be “income tested”?

If you entered aged care on or after 1 March 1998, the maximum amount of fees you can be asked to pay, will be determined by your income.

I went into a hostel/nursing home prior to 1 March 1998.  Will I have to pay aged care fees?

You will be required to pay the basic daily resident contribution only:

$21.52 per day for income support pensioners; or

$26.91 per day for self-funded retirees.

You will not have to pay income tested fees.

*Some residents in pre-1 October 1997 variable fee hostel arrangements or extra service facilities pay extra.

Are my fees affected by any other things?

Yes.  The level of care you require is taken into account when working out your fees.

Special rules also apply if you are residing in an extra care facility and residents residing in hostels prior to 1 October 1997 where a variable fee arrangement applied.

How do you know how much care I require?

DVA does not know how much care you require.  The care you require is assessed by the DH&FS.  An officer from the DH&FS Aged Care Assessment Team assesses this.

What do you mean by income?

Income means the same thing as if we were talking about income under the service pension, age pension or income support supplement income tests, depending on what type of pension you receive.  However assets disposed of prior to 20 August 1996 will not be counted for fee purposes.

There are also special exemption rules that apply to people who rent their former home in order to pay the nursing home accommodation charge.

Do I have to fill in any forms?

If you are a service pensioner, DVA age pensioner (from 26/03/98) or income support supplement recipient, DVA will provide DH&FS with your income, as held on our records.

If you receive disability pension or war widow's pension and also receive a pension from Centrelink, that agency will advise DH&FS of your income.

If you receive only disability pension or only war widow's pension, Centrelink will contact you and you will have to fill in an income data collection form.

I only receive disability pension.  How will the income testing affect me?

If you receive a disability pension and have qualifying war service, your disability pension will not be counted as income when working out your fees.

Centrelink will contact you and you will have to fill in an income data collection form.  A question on that form allows you to indicate whether you have qualifying war service so that the exemption can be applied.

If you do not have qualifying war service, your disability pension will be counted as income to work out your fees.

Qualifying service is service in a war or war like operations during which a person incurred danger from hostile forces of the enemy

I only receive disability pension, but DVA is still determining if I have qualifying service.  How will income testing affect me?

Your disability pension will be assessed as income to work out your fees until DVA makes a decision on your qualifying war service  If DVA establishes that you have qualifying war service, your disability pension will not be counted as income to work out your fees and your fees will also be retrospectively adjusted from 1 March 1998 or from when you entered care, whichever is later.

If DVA determines that you do not have qualifying war service, your disability pension will continue to be counted as income to work out your fees.

I am an ex-POW.  Will my fees be income tested?

Former POWs receiving higher levels of care (as assessed by an ACAT) will not have their income used to assess their fees.

Former POWs receiving lower levels of care (as assessed by an ACAT) will have their income used to assess their fees.

I only receive War Widow/er's Pension.  How will income testing affect me?

Your war widow's pension will be counted as income to work out your fees (unless you have qualifying war service).

I receive War Widow's Pension and Income Support Supplement.  How will income testing affect me?

Your war widow's pension will be counted as income to work out your fees.

Your income support supplement will not be counted as income.

I understand that as a War Widow, I get a reduction applied to the amount of WWP that is counted as income.

The reduction you are talking about only applies if your rate of ISS is limited to the maximum rate (known as the ceiling rate) payable (usually $120.10).  The purpose of this reduction is to discount part of your income so that you are not disadvantaged in comparison to age pensioners (who are not limited to a ceiling of $120.10), when the income test is used to work out your fees.

The special discount will ensure that you are only charged the same fee payable by other pensioners who have the same means (pension plus income) as you.

I am a war widow and receive a lower rate of income support pension than $120.10 per fortnight.

Do the discounting rules apply to me?

No.  Your income support pension is calculated under the same rules that apply to other income support pensioners based on your income and assets only.

I receive Service Pension and Disability Pension.  How will income testing affect me?

Your disability pension will not be counted as income to work out your fees.

Your service pension will not be counted as income either.

I am blinded.  How will income testing affect me?

The income testing will still be applied if you are blinded.

What if I think the amount of income you are using to work out my fees is wrong?

You should apply to DVA for a review of your income as soon as possible.

What if I don't want to disclose my income to DH&FS?

It is not compulsory for you to provide your income details.  However, like the Government policy in respect of bank account interest and tax file numbers, if you choose not to disclose your income details, you may be charged maximum fees.

How much are the maximum fees?

$64.56 per day.

How much fees will I pay if I am getting maximum rate pension?

$21.52 per day.  This is called the Basic Daily Resident Contribution.

If I enter Respite Care, will I be income tested?

No.  A person receiving respite care will not have their income counted to work out their fees.  Residents receiving respite care will pay only the Basic Daily Resident Contribution of $21.52 regardless of income.  The $21.52 applies irrespective of whether you are a pensioner or not.

What are the special pension exemptions available to people entering nursing homes

A person entering high level care (equivalent to nursing home care) can have their former home exempted from assessment for pension and fees purposes if they are paying an accommodation charge and renting their former home.

In these circumstances the rent received on the home is also exempt from assessment for pension and fees purposes.

If I enter a nursing home, will my home be exempt for five years?

Your former home will be exempt from assessment for pension and fees purposes during any period where you rent it out and are paying an accommodation charge.

The accommodation charge is usually payable for five years and so the exemption applies for that time.

I am living in a nursing home but I don't rent out my home.  Do I get the 5 year exemption?

No, this is a special rule that only applies to those who are renting out their former home to pay their accommodation charge however the 2 year exemption rules on your family home will apply.

If I enter a hostel, will my home be exempt for five years?

No however the 2 year exemption rules on your former home will apply.  The five year exemption is only available to residents who are paying an accommodation charge and renting out their home to pay that charge.

Accommodation charges are only payable by persons entering high level care (equivalent to nursing home care)

If the five year exemption does not apply to me, will my home be assessable immediately I enter care?

No.  Your former home will be exempt from assessment for pension and fees purposes for two years from the date on which you vacate it.

If you have a partner, your former home will be exempt while he or she continues to occupy the home and the two years of additional exemption will only commence when your partner also vacates the home to enter care.

I recently gave away some of my assets to another person.  Will those assets affect my pension or fees?

You can give away $10,000 in 12 months (your pension year) and none of that amount will be assessed for pension or fees purposes.

If you give away more than $10,000 the excess is assessed for pension purposes for 5 years from the date you gave away the asset.  The excess will also be deemed to earn interest during that time.

Any excess will also be assessable for fees purposes for 5 years unless the assets were given away prior to 20 August 1996.

I gave away $30,000 before 20 August 1996 why is $20,000 of it still affecting my pension?

The pension rules for gifts and disposed assets have not changed.  However, the amount that you gave away before 20 August 1996 will not be counted for aged care fee purposes.

I get disability pension from DVA but my nursing home/hostel is charging me $26.91 a day.  Shouldn't I be paying $21.52 a day because I'm a  pensioner?

The daily resident contribution of $21.52 per day applies only to persons receiving an income support pension.  Disability pension is a compensation payment it is not an income support pension and so $26.91 is the correct daily rate if disability pension is all you are receiving.

Officers please note:  You should advise people who are not receiving income support of the current income and assets cut out points for pensions & other eligibility criteria if necessary.

I get war widows pension from DVA but my nursing home/hostel is charging me $26.91 a day.  Shouldn't I be paying $21.52 a day because I'm a  pensioner?

The daily resident contribution of $21.52 per day applies only to persons receiving an income support pension.  War widows pension is not an income support pension and so $26.91 is the correct daily rate if war widows pension is all you are receiving.

Officers please note:  You should advise people who are not receiving income support of the current income and assets cut out points for pensions & other eligibility criteria if necessary.

I am already living in a nursing home/hostel, will I be income tested

If you were living in a nursing home/hostel between 30 September 1997 and 1 March 1998 you will not pay income tested fees - even if you leave care for a while and return at any time after that date.

I am paying an additional amount per day called an accommodation charge?  Why do I have to pay this?

The accommodation charge is not a fee.  It is payment for the accommodation component of your care.  It is an amount that people receiving high level (nursing home care) pay if they can afford to do so.  The accommodation charge is payable instead of an accommodation bond payable by those in low level (hostel) care.

It is payable for 5 years.

This charge is not counted as an income or asset for pension purposes.

I sold my home to pay an accommodation bond so that I could move into a nursing home and then the Government changed their mind.  What should I do?

You should provide details of the sale of your home and the accommodation bond arrangements and we will review your case.

Even if you did not actually pay the bond because of the changes announced by the Prime Minister, you should provide us with the details of the sale and the prior arrangements you had with the nursing home.

I receive service pension/ISS and the Government told me that I would pay $21.10 a day so why am I being charged $21.52 a day.

The daily resident contribution you pay is linked to the rate of pension paid to income support pensioners.

Pension rates for DVA pensioners were increased on 26 March 1998 ($6.80 per fortnight for a single pensioner, $5.70 each per fortnight for a couple) to maintain the rate of pension at 25% of Male Total Average Weekly Earnings.

The daily resident contribution was increased from $21.10 a day to $21.52 a day from 2 April 1998 (the date on which the rate of pension paid to social security pensioners increased for the same reasons).

I receive ISS at the ceiling rate ($120.10) and didn't receive any increase in my pension.  Why have the fees I am paying gone up from $21.10 a day to $21.52 a day

Because you are paid at the ceiling rate, the amount of pension you receive will not change with any increase to pension rates.

You will still however be required to pay the increased daily resident contribution of $21.52 a day.

Overall you should still be better off under the changes implemented by the Government since your daily fees would have reduced by $74.80 per fortnight ($5.30 per day) from 1 October 1997 when rent assistance ceased to be paid to persons in aged care.

Unlike pensioners who are not paid at the ceiling rate, the amount of pension you receive was not reduced when rent assistance ceased to be payable to you on 1 October 1997.

Why have the fees I must pay for my care gone up?

The daily resident contribution you pay is linked to the rate of pension paid to income support pensioners.

Pension rates for all income support pensioners were recently increased to maintain the rate of pension at 25% of Male Total Average Weekly Earnings.

In accordance with that increase, the daily resident contribution payable by pensioners and non-pensioners has increased from 2 April 1998 (the date on which the rate of pension paid to social security pensioners increased).

How much more must I pay?

The daily resident contribution for an income support pensioner has increased from $21.10 per day by 42¢ per day to make it $21.52 per day.  This is an increase of $5.88 per fortnight.

The daily resident contribution for a non pensioner has increased from $26.40 per day by 51¢ per day to make it $26.91 per day.  This is an increase of $7.14 per fortnight.

Will there be more increases?

Yes.  Each time pension rates increase, there will be a corresponding increase in the daily resident contribution payable by pensioners and non-pensioners.

I receive disability pension/war widows pension only and the Government told me that I would pay $26.40 a day so why am I being charged $26.91 a day.

The daily resident contribution that non-pensioners pay is linked to the rate of pension paid to income support pensioners.

Pension rates for DVA pensioners were increased on 26 March 1998 and for social security pensioners on 2 April 1998 to maintain the rate of these pensions at 25% of Male Total Average Weekly Earnings.

Accordingly, the daily resident contribution for non-pensioners was increased from $26.40 a day to $26.91 a day from 2 April 1998.

I receive maximum rate pension and thought that I would not pay any income tested fees.  Why have my fees gone up?

The increase to your fees is not because of income testing.

The increase has occurred because the daily resident contribution you are required to pay has been increased in-line with an increase in the rate of income support pension you are receiving.

The increase to your daily resident contribution took effect from 2 April 1998 (the date on which social security pensioners received an equivalent pension increase).

I entered care before 1 March 1998 and thought that I would not pay any income tested fees.  Why have my fees gone up?

The increase to your fees is not because of income testing.

The increase has occurred because the daily resident contribution you are required to pay has been increased in-line with an increase in the rate of income support pensions.

The increase to your daily resident contribution took effect from 2 April 1998 (the date on which social security pensioners received the pension increase).

I receive respite care only and thought that I would not pay any income tested fees.  Why have my fees gone up?

The increase to your fees is not because of income testing.

The increase has occurred because the daily resident contribution you are required to pay has been increased in-line with an increase in the rate of income support pensions.

The increase to your daily resident contribution took effect from 2 April 1998 (the date on which social security pensioners received the pension increase).

I receive war widow/ers pension.  Am I an income support pensioner and do I pay the same daily fees as other income support

pensioners?

War Widow/ers pension is not an income support pension.  However, it can be paid in conjunction with an income support pension from DVA (ie. income support supplement or service pension) or in conjunction with an income support pension from Centrelink.

If war widow/ers pension is all that you receive, you are regarded as a non-pensioner for fees purposes and will pay $26.91 per day as your basic daily resident contribution.

If you receive an income support pension in conjunction with your war widow/ers pension you are regarded as a pensioner for fees purposes and will pay $21.52 per day as your basic daily resident contribution.

I receive disability pension.  Am I an income support pensioner and do I pay the same daily fees as other income support pensioners?

Disability pension is not an income support pension.  However, it can be paid in conjunction with an income support pension from DVA (ie. service pension) or in conjunction with an income support pension from Centrelink.

If disability pension is all that you receive, you are regarded as a non-pensioner for fees purposes and will pay $26.91 per day as your basic daily resident contribution.

If you receive an income support pension in conjunction with your disability pension you are regarded as a pensioner for fees purposes and will pay $21.52 per day as your basic daily resident contribution.