Purpose of Instruction

This Departmental Instruction is to provide you with information about the automatic update of aged care assessment (ACA) limits.  It includes information about the calculation of the limits as well as the limits to be applied from 20 March 2006 to 19 September 2006.

Background

The Fairer Assets Test initiative was implemented on 1 July 2005 and since that date, DVA and Centrelink have been processing requests for aged care assets assessments.

The assessment is based on a person's current residential circumstances (or past residential status in some circumstances) and  current assets.   DVA make decisions and determinations on behalf of the Department of Health and Ageing (DHA) in accordance with the Aged Care Act 1997.

The outcome of an aged care assets assessment is also subject to limits specified in the Aged Care Act 1997.  Those limits are a multiple of the basic age pension amount (not a member of a couple) and may be impacted when the basic age pension amount alters in March and September of each year with the Consumer Price Index (CPI) and Male Total Average Weekly Earnings (MTAWE).

Setting the limits in ACA

At the moment, those limits are calculated manually and recorded in the aged care assessment module.  Each time the basic age pension amount alters, the limits are re-calculated manually and applied to the module.

These limits are included as General Information in the advice to the pensioner or their representative.

Calculation of ACA Limits

The ACA limits from 20 March 2006 are :

• Less than or equal to $31,500.00 for Concessional ;
• Less than $50,000.00 for Assisted; and
• Greater than or equal to $50,000.00 for Neither.

Definition of Concessional

The assets limit for Concessional status is defined as:

the net value of the person's assets is less than the amount obtained by rounding to the nearest $500.00 (rounding to $250.00 upwards) an amount equal to 2.5 times the basic age pension amount (not a member of a couple) on the date of the determination.

From 20 March 2006 the amount is  $31,500

Basic Age Pension Amount          12,529.40

x 2.5                                              31,323.50

Rounded                                       31,500.00

Definition of Assisted

The upper assets limit for Assisted status is defined as:

the net value of the person's assets is less than the amount obtained by rounding to the nearest $500.00 (rounding to $250.00 upwards) an amount equal to 4 times the basic age pension amount (not a member of a couple) on the date of the determination.

From 20 March 2006 the  amount is  $50,000

Basic Age Pension Amount          12,529.40

x 4                                                 50,117.60

Rounded                                       50,000.00

To be an assisted resident, the net value of the person's assets must be less than the assisted limit and more than the concessional limit.

Neither Concessional nor Assisted

If a person's net assets equal or exceed $50,000, the residential status is neither Concessional nor Assisted.

Automatic Update of ACA Limits

From 20 March 2006, the aged care assessment limits will be automatically updated when the basic age pension amount changes.  This change will be reflected in the ACA assessment module and the advices that are sent to the pensioner or their representative.

At the same time, a history of ACA limits has been created and will be maintained.

Effective  Date of New ACA Limits

The appropriate limits will be applied to an ACA assessment based on the date of determination.  So, regardless of when the request was received, the ACA limits used will be those current as at the date of Authorisation.

Unauthorised Cases Prior to an SI

Cases that have not been authorised prior to an SI but have been progressed beyond the 'Assessment Calculator' should be reassessed prior to finalising the case.

National Office Contacts

Stephen Harkin – New Systems Development – 07 3223 8398

Elaine Tse – Income Support Policy – 02 6289 6011