Summary of changes

The changes that have been announced since 1 October 1997, and the dates from which the changes take effect are summarised as follows:

• Existing hostel residents at 1 October 1997 protected from increase in basic daily resident contribution associated with the alignment of nursing home and hostel daily fees from 1 October.  This change has no income support impact.

• When calculating a person's assets for the purposes of determining the accommodation bond or charge they must pay, the former home will not be counted where a carer has lived in it for two years (previously five years).  Effective from 1 October 1997.  This change has no income support impact.

• Accommodation charge replaces accommodation bond for new entrants to nursing homes (other than extra service facilities).  Effective from 6 November 1997.

• Exemption of former home under pension income and assets tests (and hence for fees purposes) extended from 2 to 5 years where pensioner pays an accommodation charge and rents former home.  Effective from 6 November 1997.

• Rental from former home exempted from pension income test (and hence for fees purposes) where a pensioner pays an accommodation charge and rents former home.  Effective from 6 November 1997.

• Certain exemptions introduced under the pension income and assets tests, for residents of nursing homes who paid an accommodation bond between 1 October 1997 and 5 November 1997 (both inclusive) and then commuted to an accommodation charge.  Effective from 6 November 1997.

• Income testing of aged care fees deferred to 1 March 1998.

Summary of changes continued

• A 28 day period of grace introduced during which new entrants to aged care will pay no income tested fees.  That is, a person who enters aged care after 1 March 1998 will not be required to pay any income tested fees until 28 days after their date of admission.

• Income testing to apply only to new residents on or after 1 March 1998.

• Deemed income attributable to gifts made prior to 20 August 1996 will not be assessed for aged care fees purposes but will continue to be assessed for pension purposes.  Effective with introduction of income tested fees on 1 March 1998.

The changes that have an income support impact are described in the sections that follow.

Background

From 1 October 1997, under the provisions of the Aged Care Act 1997, persons entering Government funded residential aged care could be required to pay an accommodation bond to the nursing home or hostel they were entering.

These bonds were typically payable as a lump-sum upon entry to the facility although arrangements could be made to pay the bond as a periodic payment or a combination of lump-sum and periodic payment.

The introduction of accommodation bonds generated significant adverse publicity for the Government - particularly in relation to the introduction of such bonds for nursing home residents.

The Government's response was to replace the accommodation bonds payable under the 1 October 1997 arrangements with a new periodic fee known as an “accommodation charge”.  In association with this, a number of other measures were introduced to assist residents in paying the charge using rental income from their former home.

What is an accommoda-tion charge

An accommodation charge is a periodic payment that an aged care facility (in most cases a nursing home) can ask certain residents to pay to cover the cost of their accommodation.

The amount of the charge depends on a person's assets.  None of the amount paid is refundable when the resident dies or leaves aged care.

The charge can be levied for a maximum period of five years and is calculated on a daily basis.  Typically, facilities require residents to pay the charge monthly.  However, a range of payment options are available to the resident including deferral and payment of the charge from the person's estate.

Who can be required to pay an accom-modation charge

Only persons entering high level care from 6 November 1997 can be required to pay an accommodation charge.

This means that most residents who pay the charge will be residing in nursing homes.  However, small numbers of residents may be encountered who are residing in hostels but are receiving high level care in those facilities.  These people may also be paying an accommodation charge.

Concessional residents are exempt from paying the charge.

Also excluded from paying an accommodation charge are persons who enter extra service places in nursing homes.  These people would be required to pay an accommodation bond rather than an accommodation charge.

How much can a person be required to pay.

People with assets up to and including $22,500 ($23,000 from 2 April 1998) pay nothing.  These people are concessional residents.

People with assets above $22,500 ($23,000 from 2 April 1998) up to and including $36,000 ($37,000 from 2 April 1998) pay an amount that increases with the level of their assets up to a maximum of $6.00 per day.  These people are assisted residents.

People with assets above $36,000 ($37,000 from 2 April 1998) up to and including $44,400 ($44,900 from 2 April 1998) pay an amount that increases with the level of their assets up to a maximum of $12.00 per day.

People with more than $44,400 ($44,900 from 2 April 1998)pay a flat rate of $12.00 per day ($4,380 per year).

A table summarising the amount a person can be required to pay, for different asset levels can be found in the DH&FS information sheet No. 7.

DVA not involved in calculating charge

As for accommodation bonds, it is important to note that DVA is not involved in any way in calculating or charging accommodation charges.

Furthermore, pensioner asset data held by DVA is not passed to third parties for the purposes of calculating accommodation charges.  However, DVA asset data may be used for Audit purposes where an aged care facility has been identified through the DH&FS risk management process.

Where DVA is advised that a pensioner has entered high level care, our role is limited to ensuring that any changes to a person's income or assets associated with payment of a charge are updated in the person's pension assessment.

Income test assessment of accommoda-tion charge

Payment of an accommodation charge has no direct impact on a person's income.

However, a person paying an accommodation charge is likely to make other changes to their financial circumstances to raise money to pay the charge (eg. they sell some shares).  These changes may affect their income and this will need to be updated in their assessment.

Also, special income test exemptions may apply to certain rental income where a person rents out their former home and pays an accommodation charge.  See Accommodation Charges - Exemption of Rental on Former Home for more information.

Assets test assessment of accommoda-tion charge

Unlike an accommodation bond, none of an accommodation charge is refundable.  Accordingly, an accommodation charge has no asset value.

Payment of an accommodation charge thus has no direct impact on a person's assets.

However, a person paying an accommodation charge may make other changes to their financial circumstances that affect their assets and these changes will need to be updated in their assessment.

Also, a special assets test exemption may apply to a person's former home if they rent that home and pay an accommodation charge.  See Accommodation Charge - Exemptions of Former Home Under Assets Test for more information.

Systems impact

As an accommodation charge is not assessable as income or an asset, no provision has been made on the system to record the amount a person pays as an accommodation charge.

However, certain systems changes have been made to cater for exemption of the person's former home under the assets test for five years where a person is paying an accommodation charge and renting out their former home (see next section).

Background

With the introduction of accommodation charges, two special exemptions were introduced to assist residents to pay the charge using rental income from their former home.

This was done to counter criticism that people would have to sell their former home to be able to pay the charge.

The first of the exemptions enables a resident's former home to be exempt from assessment under the pension assets test in certain circumstances.

Eligibility for exemption

A resident's former home will be exempt from assessment under the pension assets test where:

• the person is in high level (nursing home) care; and

• he or she is paying an accommodation charge or is accruing liability to pay an accommodation charge; and

• he or she is receiving rent from his or her former home.

Period of exemption.

As the exemption for the former home is linked to payment of an accommodation charge, the exemption will typically last for the five years that the charge is payable.

In certain circumstances, the five year period may not be continuous.

For example, a person may move from high level care to low level care after one year during which they were paying the charge.  If they later return to high level care, the charge will become payable again and will run for another four years.  The exemption of their home would do likewise.

Requirement for continuity of care.

The “five year” exemption for the former home is only available to a person if they have continuously been in a care situation since vacating their principal home.

For example, in the situation where the health of a person who is receiving high level care improves to the extent that they depart aged care and take up alternative accommodation in the community they may no longer be in a care situation.  Should their health later deteriorate to the extent that they again require high level care, they would not be entitled to the exemption of their former home since the continuity of care has been broken.

Cessation of exemption.

The exemption will cease at any time that:

• the person departs high level care; or

• they stop paying the accommodation charge (other than as a result of a sanction being applied to the facility in which they reside); or

• they cease renting or trying to rent the former home.

In regard to rental of the former home, the exemption should only be cancelled if the person has actually removed the home from the rental market.  Periods of vacancy of the home would not be counted as a cessation of rental provided the home was still available on the rental market.

Interaction of 2 year and 5 year exemptions

The current 2 year exemption of a person's former home, where they enter a care situation, and the new 5 year exemption can interact in a number of ways.  The following situations are possible.

• Both exemptions apply simultaneously

The person may enter high level aged care directly from the community, (ie without passing through some other care situation).  Where this occurs the 2 year exemption and 5 year exemption would commence at the date of admission to high level care and would apply concurrently.

• 5 year commences while 2 year still in force

The person may enter a care situation other than high level care (eg. low level care or community based care) and within two years enter high level aged care.  Where this occurs the 2 year exemption would commence at the date the person entered a care situation and the 5 year exemption would commence at the date of admission to high level care.  There would thus be a period of overlap during which the two exemptions would apply concurrently.

Where the two year exemption is close to expiring, the overlap will be minimal and in this circumstance, the resident's home may be exempt for a continuous period up to a maximum of 7 years.

• 5 year commences after 2 year expires

The person may enter a care situation other than high level care and more than two years later enter high level aged care.  Where this occurs, the 2 year exemption would commence at the date the person entered a care situation but would expire before the five year exemption commenced (on the date of admission to high level care).  In this circumstance, the person's former home would be an assessable asset for the period not covered by either exemption.

Cessation of 5 year exemption - check status of 2 year exemption

If a resident paying an accommodation charge has their home exempted because they are renting it out, and they then cease to rent the home, the five year exemption will cease to apply.

In this circumstance, it is important that examiners confirm whether or not the 2 year exemption remains in force.

If the person first entered a care situation more than 2 years ago, the exemption will have expired and the person's home will be assessable as an asset.  On the residential situation screen of PIPS PC, the person's residential situation should be changed from “Nursing Home - Previous Owner” to “Nursing Home” and the RA not payable flag “Client in Res Care - Owner 5 Years” should be changed to “Client in Residential Care Facility”.

If the person first entered a care situation less than 2 years ago, the 2 year exemption will still be in force and the person's home will remain exempt.  On the residential situation screen of PIPS PC, the RA not payable flag “Client in Res Care - Owner 5 Years” should be replaced with “Client in Res Care - Owner 2 Years”.

Flow-on to pension income test and aged care fee assessment

Under the 2 year and 5 year exemptions, a person's former home is exempt from assessment as an asset.

Accordingly, no income can be deemed to be earned on that asset.

This means that where a person's former home is exempt from assessment as an asset for pension purposes, no income can be deemed to be earned on that asset for the purposes of the pension income test and hence the aged care fees income test.

Partnered cases

If a person who enters residential aged care is a member of a couple and that person's partner continues to occupy the former home, the home continues to be assessed as the principal home until such time as the partner vacates it.

Once the partner does vacate the home, the two year and/or five year exemptions will apply to the partner as they do to the member of the couple in aged care.

If the partner who last vacates the home purchases another home to live in, both residences cannot be regarded as the principal home of the couple.  Generally, the residence which is of greater value would be regarded as the principal home in this circumstance and the other residence would be assessable as an asset.

In this circumstance, any rental derived from the home would continue to be exempted from assessment as income (see next section).

Systems impact

To exempt a person's home while an accommodation charge is in payment and the person is renting their former home, a new RA not payable flag has been provided on the Residential Situation screen of PIPS PC.  The new flag is “Client in Res. Care - Owner 5 years”.

Setting the person's residential situation to “Nursing Home - Previous Owner” and the RA not payable flag to “Client in Res. Care - Owner 5 years” will enable the exemption.

Refer to Attachment A for more details of these systems changes.

Eligibility for exemption

Where the former home of a person is exempt from assessment as an asset because the person is paying an accommodation charge and renting out that home (see section above), any rent derived from the former home is also exempt from assessment under the pension income test and hence the aged care fees income test.

Purpose of exemption

This exemption allows residents receiving high level (nursing home) care to utilise rental income to pay their accommodation charge without suffering a reduction in pension or increase in aged care fees due to that rental income.

How much rental should be exempted

All rental from the former home should be exempted - even if it exceeds the amount of accommodation charge the person is paying.

Does resident have to satisfy a purpose test

It is not necessary for a resident to prove that the whole or principal purpose of renting their former home was to pay the accommodation charge.

All that is necessary for them to have access to the exemption is that they be paying an accommodation charge and renting their former home as stated under “Eligibility for Exemption” above.

Systems impact

Where rental a person receives from their former home is exempted because they are paying an accommodation charge, the rental is simply not recorded in the person's assessment.  There is thus no systems impact associated with this change.

Note however that a person who has rental income exempted in this way should have the RA not payable indicator “Client in Res. Care - Owner 5 years” selected.

Manual review

A manual review should be set for a date 5 years after the date that the 5 year exemption commences.  The person's full financial circumstances should then be re-examined.

Background

On 1 October 1997, the Government introduced a new accommodation payment known as an accommodation bond for all aged care residents.

Initially, the charge applied to all aged care residents irrespective of whether they were receiving high (nursing home) level care or low (hostel) level care.

However, in response to public concern over the application of accommodation bonds to nursing home residents, the Government announced that with effect from 6 November 1997 new entrants to high (nursing home) level care would be required to pay a revised form of the accommodation payment known as an accommodation charge.

The new accommodation charge was payable as a periodic amount rather than a lump sum as was the case with the accommodation bond.

Because a number of people who entered high level care between 1 October 1997 and 6 November 1997 had already paid a bond or had sold their home to pay a bond, special pension concessions were introduced to ensure that these people were not financially disadvantaged if they wanted to commute their accommodation bond to an accommodation charge.

Who is entitled to the concessions

The persons who are entitled to the concessions are those:

• who between 1 October 1997 to 5 November 1997 (both inclusive) paid or became liable to pay an accommodation bond and then agreed to switch to an accommodation charge; or

• who on or before 5 November 1997 sold their principal home in order to be able to pay an accommodation bond.

The partner of such a person is also entitled to the concessions, even if the member of the couple in respect of whom the bond was payable is now deceased.

How many such people are there

Examination of the DVA database indicates that approximately 50 DVA clients entered nursing homes and paid an accommodation bond between 1 October 1997 and 5 November 1997 (both inclusive).

Less than 10 (nationally) of these residents are likely to switch from an accommodation bond to an accommodation charge and claim the concessions provided for this group.

Assets test exemption

Under the concessions the amount that can be exempted under the assets test will be:

• any amount of the person's accommodation bond refunded to the person; or

• the gross proceeds of sale of the person's former home, less any costs incurred in the course of the sale and less any debt secured by the home; or

• where both apply, the greater of the two amounts.

In the legislation, this is referred to as the “exempt bond amount”.

Example

A DVA pensioner owns a home worth $120,000 on which he owes $30,000.

On 3 October 1997, the pensioner enters nursing home care and is required to pay an accommodation bond of $40,000 to the nursing home.

On 20 October 1997 the pensioner sells his home for $120,000.  He uses $40,000 of the funds to pay the bond and $30,000 of the funds to pay the loan secured by the home  He incurs $5,000 of costs in completing the sale.

With the introduction of the accommodation charge scheme on 6 November 1997, the pensioner decides he would prefer to switch to paying an accommodation charge and seeks a refund of his accommodation bond.

The facility refunds $39,880 (the $40,000 paid less $120 of drawdown that has accrued over the 17 day period) to the pensioner.

The amount that would be exempted under the assets test would be the greater of:

• The amount of accommodation bond refunded - which in this case is $39,880; or

• the gross proceeds of sale less costs and debt - which in this case is $85,000 ($120,000 proceeds of sale - $30,000 debt - $5,000 costs).

Thus $85,000 of the pensioner's assets would be disregarded under the assets test.

Amount disregarded remains constant

The amount disregarded under the assets test will remain constant in all circumstances.

Situations may arise where a person has less assessable assets than the amount to be disregarded.  In this circumstance the person would be assessed as having nil assets.

Should the person's assets later increase to the extent that their assessable assets exceed the amount to be disregarded, the full amount to be disregarded will be subtracted from their assessable assets.

Application of the exemption to members of a couple

Where a person who is a member of a couple is entitled to the assets test exemption, 50% of the amount to be disregarded will be applied to the person and the other 50% to their partner.

Should one member of the couple die, 100% of the amount to be disregarded will be applied to the surviving member.

Income test exemption

Where an amount is exempted under the assets test exemption, a corresponding reduction will be made to the person's income.  The amount of the reduction is calculated by multiplying the amount exempted under the assets test by the above threshold deeming rate.

Example

Continuing from the previous example, where $85,000 of a pensioner's assets are disregarded under the assets test, the reduction to be applied to the person's income would be calculated as follows:

$85,000  ×  5%  =  $4250  per year  =  $163.50 per fortnight

Amount disregarded remains constant

As the reduction to be applied under the income test is based on the amount disregarded under the assets test, it too will remain constant, unless there is a change to the above threshold deeming rate.

Situations may arise where a person has less assessable income than the reduction to be applied.  In this circumstance the person would be assessed as having nil income.

Should the person's income later increase to the extent that their assessable income exceeds the reduction to be applied, the full reduction will be applied to their assessable income.

Application of the exemption to members of a couple

Where a person who is a member of a couple is entitled to the income reduction, 50% of the reduction will be applied to the person and the other 50% to their partner.

Should one member of the couple die, 100% of the reduction will be applied to the surviving member.

Systems impact

As the exemptions under the income and assets tests are catered for using the manual rates screen, no systems changes were required to implement the exemptions.

Refer to “Exemption Procedure” below for more information on how to used the manual rates screen to implement the exemption.

Exemption procedure

The procedure to follow to implement the income and assets tests exemptions using the manual rates screen is as follows:

1.Update the person's pension assessment in accordance with their current income and asset details.

2.Determine the amount to be exempted under the assets test.  This will be:

-the amount of accommodation bond refunded to the person; or

-the gross proceeds of sale of the person's former home, less any costs incurred in the course of the sale and less any debt secured by the home; or

-if both of the above apply, the greater of the two amounts.

3.Determine the reduction to be applied to the person's income.  This will be the amount to be exempted under the assets test multiplied by the above threshold deeming rate.

4.Deduct the income and asset exemption amounts for the person's total income and assets.  For couples, apply 50% of the deductions to each member.

5.Go to the Manual Rates screen and select “Miscellaneous (manual assessment) Type”.  Record the income and asset balances.  Give a reason for the manual rate assessment in Text.

Background

Under the pension income test, income is deemed to be earned on any disposition of assets, in excess of the $10,000 gifting limit, within the preceding five years.

With the introduction of income testing for aged care fees, this meant that such income would also be counted for aged care fees purposes.

This flow-on to aged care fees was criticised as being retrospective in nature.

This is because a person who had decided to dispose of assets in the preceding five years should have been aware that it would affect their pension, but could not have been aware that it would affect the aged care fees they would pay in the future.

In response to this matter, the Government decided that any income attributable to any excess disposition of assets before 20 August 1996 (the date that the Aged Care Reforms were announced) would be exempt from assessment as income for aged care fees purposes.

For the same reasons, a similar exemption was extended to any disposition of income prior to 20 August 1996.

Purpose of exemptions

The exemptions ensure that any income attributable to any excess disposition of assets before 20 August 1996 will not affect a person's rate of aged care fees.

Likewise, any disposition of income prior to that date will not affect a person's rate of aged care fees.

Who is entitled to the exemptions

Any aged care resident who pays income tested daily fees and disposed of assets, or income, prior to 20 August 1996 is entitled to the exemptions.

Exemptions apply to fees only

The exemption of income deemed on any excess disposition of assets prior to 20 August 1996 is for fees purposes only.

The same applies to the exemption of any disposition of income prior to 20 August 1996.

Thus there will be no change to the existing rules about any disposition of assets or income for the purposes of assessing a person's rate of pension.

How long will the exemptions last

As an excess disposition of assets is only held in a person's assessment for five years, income will cease to be deemed on those assets five years from the date of disposal.

As the disposition of the assets had to be prior to 20 August 1996 for a person to be entitled for the exemption, there will be a steady decline in the number of residents with deemed income exempted and no cases will remain after 20 August 2001.

For cases involving disposal of income, the exemption continues indefinitely because a disposition of income will be included in a person's pension assessment indefinitely.

Application of the exemptions to members of a couple

Where a person who is a member of a couple is entitled to one or both of the exemptions, 50% of the amount exempted will be applied to the person and the other 50% to their partner.

Should one member of the couple die, 100% of the amount exempted will be applied to the surviving member.

Systems impact

Neither the exemption of disposed income from the aged care fees income test nor the exemption of income deemed on disposed assets from the aged care fees income test has any system impact.

The amounts to be exempted are automatically subtracted from the income figures transmitted to DH&FS by the programs that process that income information.

Commence-ment date

Income testing of aged care fees will commence from 1 March 1998.

Residents affected

Only residents who enter aged care for the first time on or after 1 March 1998 can be income tested for fees purposes.

Residents who were living in a nursing home or hostel at any time between 30 September 1997 and 1 March 1998 will not pay income tested fees - even if they leave care for a while and return at any time after 1 March 1998.

Period of grace

The 28 day period of grace announced by the Government provides a 28 day period for a person's care level to be assessed before the person can be required to pay income tested fees.

During the 28 day period, the person is only required to pay the basic daily resident contribution applicable to their circumstances.  That is $21.10 ($21.52 from 2 April 1998) if they are an income support pensioner or $26.40 ($26.91 from 2 April 1998) if they are a non-pensioner).

Once the period of grace expires the person would be required to pay the income tested rate of daily fees applicable to their income and the level of care they require.

Systems impact

The only systems impact associated with the change to the commencement date for income testing, introduction of the period of grace and limitation of income testing to new residents is that an income testing flag has been included on the Residential Care Details screen.

This flag will indicate “yes” where a person has entered aged care after 1 March 1998 and is to be income tested.

Aged Care Amendment Bill 1998

The majority of the amendments enabling the various changes announced by the Government since 1 October 1997 are contained in the Aged Care Amendment Bill 1998.

The amendments to the Veterans' Entitlements Act 1986 that provide for the various income test and assets test exemptions are contained in schedule 3 of that Bill.

Commence-ment of provisions

The provisions of the Aged Care Amendment Bill 1998 will commence from the date of Royal Assent.

It is expected that Royal Assent will be obtained in mid April.

Application of exemptions prior to Royal Assent

As the income and assets test exemptions provided for in the Aged Care Amendment Bill 1998 are intended to apply to residents from 6 November 1997, the exemptions will have to be provided in the form of Act of Grace payments until Royal Assent is obtained.

The Department of Finance have allocated funds for this purpose.

Amendments to residential care subsidy principles

The provisions that exempt disposal related income from assessment for aged care fees purposes were inserted into the Residential Care Subsidy Principles by Residential Care Subsidy Principles Amendment (No. 1) 1997.

Commence-ment of amendments

The amendments to the Residential Care Subsidy Principles were gazetted on 3 November and commenced retrospectively from 1 October 1997.

Location of provisions

The location of key provisions relevant to the assessment of DVA pensioners is set out in the table below:

PROVISON

LOCATION

Exemption of former home under pension income and assets tests (and hence for fees purposes) extended from 2 to 5 years.

Subsection 5L(6A) VEA

Rental from former home exempted from pension income test (and hence for fees purposes).

Paragraph 5H(8)(nc) VEA

Exemptions under the pension income and assets tests, for residents of nursing homes who paid an accommodation bond between 1 October 1997 and 5 November 1997 (both inclusive) and then commuted to an accommodation charge.

Part 2 of Schedule 5 VEA

Deemed income attributable to gifts made prior to 20 August 1996 not assessed for aged care fees purposes.

Section 21.32A of the Residential Care Subsidy Principles

Extract from systems impact document

The material below has been extracted from the systems impact document prepared by Peter Feinler of SA State Office.

However, the table of pensioner circumstances and assessment codes has been re-worked to convert it to a useful pin-up guide as to which residential situation code and RA not payable flag to enter in given pensioner circumstances.

CIRCUMSTANCES OF PENSIONER

WHAT TO ENTER ON SYSTEM

Type of Facility

Nature of Care Received (1)

Homeownership Status

Residential Situation Code to use

RA Not Payable Flag to enter:

Record Accommodation Bond or Entry Contribution

Nursing Home

Government subsidised care - high level

Resident was not a home owner or has sold former home

Nursing Home

Client in Residential

Care Facility

Neither

Resident has retained former home but is not

paying an accommodation charge

Nursing Home - Previous Owner

Client in Res. Care -

Owner 2 Years

Neither

Resident has retained former home, is paying accommodation

charge but is not renting out former home

Nursing Home - Previous Owner

Client in Res. Care -

Owner 2 Years

Neither

Resident has retained former home, is paying accommodation

charge and is renting out former home

Nursing Home - Previous Owner

Client in Res. Care -

Owner 5 Years

Neither

Government subsidised care - high level

Resident was not a home owner or has sold former home

Nursing Home

Client in Residential

Care Facility

Accommodation bond if paid and in form of lump sum

Extra Service Place (Exempt Nursing Home)

Resident has retained former home.

Nursing Home -

Previous Owner

Client in Res. Care -

Owner 2 Years

Accommodation bond if paid and in form of lump sum

Government subsidised care - low level

Resident was not a home owner or has sold former home

Nursing Home

Client in Residential

Care Facility

Accommodation bond if paid and in form of lump sum

Resident has retained former home.

Nursing Home -

Previous Owner

Client in Res. Care -

Owner 2 Years

Accommodation bond if paid and in form of lump sum

Not Government

Resident was not a home owner or has sold former home

Nursing Home

None (2)

Neither

subsidised

Resident has retained former home.

Nursing Home -

Previous Owner

None (2) (4)

Neither

Hostel

Government subsidised care - high level

Resident was not a home owner or has sold former home

Retirement Village - Hostel

Client in Residential

Care Facility

Neither

Resident has retained former home but is not

paying an accommodation charge

Nursing Home -

Previous Owner

Client in Res. Care -

Owner 2 Years

Neither

Resident has retained former home, is paying accommodation

charge but is not renting out former home

Nursing Home -

Previous Owner

Client in Res. Care -

Owner 2 Years

Neither

Resident has retained former home, is paying accommodation

charge and is renting out former home

Nursing Home -

Previous Owner

Client in Res. Care -

Owner 5 Years

Neither

Government subsidised care - low level

Resident was not a home owner or has sold former home

Retirement Village -

Hostel

Client in Residential

Care Facility

Accommodation bond if paid

and in form of lump sum

Resident has retained former home.

Nursing Home - Previous Owner

Client in Res. Care -

Owner 2 Years

Accommodation bond if paid

and in form of lump sum

Not Government subsidised

Resident was not a home owner or has sold former home.

Retirement Village -

Hostel

None(2) (3)

Entry Contribution if one was paid

Resident has retained former home and is better off

assessed with home exempted for two years

Nursing Home -

Previous Owner

None(2) (4)

Enter Entry Contribution as a loan on the Loans screen if one was paid

Resident has retained former home and is better off assessed under Entry Contribution (retirement village) rules.

Retirement Village -

Hostel

None(2)(3) (4)

Entry Contribution if one was paid

Situation

Qualification

Description

MI

-

Nursing Home

MI

O

Nursing Home - Previous Owner

RV

H

Retirement Village - Hostel

RESIDENTIAL SITUATION:

VACATED HOME ASSESSABLE?

ASSET LIMIT:

ACCOMMODATION PAYMENT ASSESSMENT:

High (nursing home) level care (except exempt nursing home)

Exempt for 2 years unless sold;  or

Exempt while rented and accommodation charge payable or liable to be payable if sanctions did not apply (typically 5 years)

LOW if vacated home exempt.

HIGH in other cases.

From 6/11/97 a nursing home resident (other than a resident of an exempt nursing home) cannot pay an accommodation bond but may pay an accommodation charge.  (Any bonds paid from 1/10/97 to 5/11/97 can remain on system as an assessable asset - if such bonds are cashed in then case is assessed under manual rates).

Accommodation Charges are not subject to income and asset testing and do not need to be recorded on system.

Low (hostel) level care & Exempt Nursing Home (Extra Service Facility)

Exempt for 2 years unless sold.

5 year exemption not available.

LOW if vacated home exempt.

HIGH in other cases.

Balance of accommodation bond (ie amount paid less any drawdown that has occurred) assessable regardless of homeowner status or amount

Note 1:  Exempt nursing homes are the only approved nursing homes which can charge an accommodation bond from 6/11/97.

Note 2:  The system does not need to calculate the balance of the accommodation bond.  This is calculated and entered into the system by examiner action.

Residential Situation

Level of Care

Entry Contribution

Accommodation Bond

Warning message

Nursing Home (inc Previous Owner option) or Retirement Village - Hostel

None recorded

Not accessible or left blank by examiner

amount entered by examiner

An Accommodation Bond is valid only if the client receives approved Low (hostel) level aged care or approved High level care in an Extra Service Facility (formerly known as an exempt nursing home).  No amount should be entered if no bond was charged or the payment option for the bond is solely by periodic payments.

Retirement Village - Hostel

None recorded

amount entered or left blank by examiner

left blank by examiner

An Accommodation Bond should be recorded unless the client is not residing in approved aged care, or unless no bond was charged or the payment option for the bond is solely by periodic payments.

Nursing Home (inc Previous Owner option)

or Retirement Village Hostel

High

left blank by examiner

amount entered by examiner

DH&FS records show that (insert client's name) receives a High level of care.  An Accommodation Bond cannot be charged if the client entered High level aged care after 5 November 1997, unless in an Extra Services Facility (formerly known as an exempt nursing home).  Therefore, the Accommodation Bond field should be left blank unless client is in an Extra Services Facility.”

Retirement Village - Hostel

High or Low

amount entered by examiner

left blank by examiner

DH&FS records show that (insert client's name) receives a (insert High or Low as appropriate) level of approved age care.  Therefore, an entry contribution is not valid if client remains in approved aged care.

Retirement Village - Hostel or Nursing Home (inc Previous Owner option)

Low

left blank by examiner

left blank by examiner

DH&FS records show that (insert client's name) receives a Low (hostel) level of care.  An Accommodation Bond should be recorded, unless no bond was charged or the payment option for the bond is solely by periodic payments.

Type of Asset:

Assessable Amount:

Financial Institutions:

$20,000

Managed Investments

$40,000

Deprived Asset (gift of $20,000 on 10/1/96)

$10,000

Total:

$70,000