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Impact on aged care residents
From 1 October 1997, income support pensioners who are approved care recipients in aged care facilities (ie. are receiving Commonwealth Government subsidised care) will no longer be entitled to rent assistance (residential care allowance).
In addition, no rent assistance is paid to pensioners who become approved care recipients after 1 October 1997.
Under the aged care reforms, rent assistance is no longer paid to income support pensioners receiving Commonwealth Government subsidised care in such aged care facilities. Instead, an additional subsidy known as “pensioner supplement” is paid directly to the nursing home or hostel by DH&FS..
To compensate income support pensioners for this change, they pay a lower basic daily resident contribution (basic daily fee) for their aged care. Instead of being charged a basic daily resident contribution of $26.40 per day indexed ($26.91 from 2 April 1998), income support pensioners are generally charged a basic daily resident contribution of $21.10 per day indexed ($21.52 from 2 April 1998). For those entering aged care on or after 1 March 1998, a separate income tested daily fee may be payable by reduced rate pensioners in addition to the basic daily fee.
The reduction in basic daily resident contribution approximates the value of the maximum rent assistance that may have previously been paid to the resident.
There will, however, be some income support pensioners who are residing in an aged care facility but are not approved care recipients (ie they are not receiving Commonwealth Government subsidised care).
These people continue to be entitled to rent assistance and are discussed under Residents still Entitled to Rent Assistance below.