Certain residents cannot be asked to pay an accommodation bond by the facility they enter. These people are:
Ex-Prisoners of war are not exempt from paying accommodation bonds.
Concessional residents are residents who:
Special rules also apply where a person is in hardship because they have unrealisable assets (see Residents in Hardship More [6]
Because concessional residents have low levels of assets, they cannot be asked to pay an accommodation bond.
Aged care providers receive additional Commonwealth Government subsidies for each concessional resident for whom a place is provided.
The accommodation bond rules provide that a person must be left with a certain level of assets after paying a bond. A single person must be left with $22,500 ($23,000 from 2 April 1998) whereas a couple must be left with $45,000 combined ($46,000 from 2 April 1998).
If the value of a person's assets is below these limits, the person may be a concessional resident and cannot be asked to pay an accommodation bond. More [9]
If the value of a person's assets is between $22,500 and $36,000 ($23,000 and $37,000 respectively from 2 April 1998), the person cannot be asked to pay a full bond and would be regarded as an assisted resident. A member of a couple would be regarded as an assisted resident if the value of the couple's assets is between $45,000 and $72,000 combined ($46,000 and $74,000 respectively from 2 April 1998). More [10]
If a person entering low level aged care owns their own home, the value of that home is counted as part of the person's assets when determining the amount they can be asked to pay as an accommodation bond.
However, in certain circumstances the home may be exempt (see Exemption of Home below).
In calculating the amount that a person can pay as an accommodation bond, their former home is exempt from assessment for accommodation bond purposes where:
This exemption continues to apply while the resident remains in the same nursing home or hostel even if the spouse, dependent child, close relative or carer later leaves the home.
Assisted residents are people who meet the same criteria as concessional residents but have assets between $22,500 and $36,000 ($23,000 and $37,000 respectively from 2 April 1998) for a single person, or $45,000 and $72,000 combined for a couple ($46,000 and $74,000 respectively from 2 April 1998).
These people can only be asked to pay a small bond of up to $13,500 ($14,000 from 2 April 1998).
In most cases the bond will not be enough to allow the facility to draw down the full $13,000 amount the facility is allowed to retain.
Because the facility is unable to retain the usual amount, an additional Commonwealth Government subsidy is paid for each assisted resident the facility for whom the facility provides a place.
In assessing a residents assets to determine the amount of accommodation bond he or she will pay, any unrealisable assets the person has will be disregarded.
For these purposes, an unrealisable asset is as defined in subsection 11(12), subsection 11(13) and subsection 11(14) of the Social Security Act 1991.
Under that definition, an asset is unrealisable if a person cannot, or cannot reasonably be expected to:
Part of the definition of an unrealisable asset also enables specific assets of farmers to be regarded as unrealisable.
Bill is a single service pensioner who does not own a home (and has not owned a home in the last two years), but has $32,000 in assets. The maximum amount of his bond would be calculated as follows:
Assets$32,000
Less amount Bill must be left with$22,500
Maximum bond Bill can be asked to pay$ 9,500
Because Bill has less than $36,000 in assets, has not owned a home in the last two years and is an income support pensioner he is assessed as an assisted resident.
The facility is unable to retain the usual $13,000 draw down and hence, an additional Commonwealth Government subsidy is paid to the facility for providing Bill with care.
Note: figures used in example are pre 2 April 1998 increase.
Peter and Claire are a married couple who own their own home worth $250,000. They have other assets worth $120,000.
Claire is admitted to a nursing home but Peter continues to reside in the family home.
Because Peter continues to reside in the family home, it is exempt from assessment when determining the maximum accommodation bond Claire can be asked to pay. The maximum amount of her bond would be calculated as follows:
Family Home$250,000 (excluded)
Other assets$120,000
Half of $120,000 $ 60,000
Less amount Claire
must be left with$ 22,500
Maximum bond Claire
can be asked to pay$ 37,500
Note: figures used in example are pre 2 April 1998 increase.
An accommodation bond can be paid in the form of a lump-sum or as equivalent periodic payments or as a combination of both.
Where a person chooses to pay a bond as periodic payments, each payment will consist of a component to cover the draw down the facility could have made on the bond had it been paid as an equivalent lump sum, plus a component to cover the interest the facility could have earned on the bond had it been paid as an equivalent lump sum.
Only people who enter aged care from 1 October will have an amount they pay for entry to an aged care facility assessed as an accommodation bond.
Existing residents of hostels and those people who enter hostels before 1 October will not be required to pay an additional amount as an accommodation bond or re-negotiate any amount they have already paid as an entry contribution.
Existing residents of nursing homes and those people who enter nursing homes before 1 October will not be required to pay an accommodation bond or entry contribution. More [18]
A person pays an accommodation bond once only, on entry to aged care. Thereafter, if the person moves from one facility to another, the balance of the bond is rolled over to the new facility and the person is not required to pay an additional amount.
Likewise, a person's assets are assessed once only at the time the accommodation bond is negotiated. If the person's assets vary after the bond has been agreed, the amount of the bond is not reassessed.
The Aged Care Act 1997 requires that where a person leaves aged care, the balance of any accommodation bond they paid must be refunded to the person, or their estate, within 2 months of their departure.
A further requirement of the Aged Care Act 1997, is that where a person moves from one facility to another, the balance of any bond paid must be transferred to the person's new facility within 7 days of the residents move. The maximum bond payable to the second facility is the balance refunded by the previous facility.
The Aged Care Act 1997 provides that where a person has paid an accommodation bond, or signed an accommodation bond agreement, and then leaves the aged care facility within two months of entering it, the facility can retain a certain amount of the bond.
The amount the facility can retain is equivalent to the amount that the facility would have received if the person had remained in aged care for three months.
This DI should be read in conjunction with DI C13/98 which covers changes to aged care that have occurred since 1 October 1997.
Commonwealth Department of Veterans' Affairs |
DVA file No. (if known): ......................
QUALIFYING SERVICE APPLICATION
FOR THE PURPOSE OF EXEMPTING DISABILITY PENSION FROM
THE DEPARTMENT OF HEALTH AND FAMILY SEVRVICES
INCOME TEST ON DAILY AGED CARE RESIDENT FEES
SURNAME:GIVEN NAMES:
Aged care resident? |
No |
Yes |
Spouse if applicable
SURNAME:GIVEN NAMES:
Aged care resident? |
No |
Yes |
I hereby wish to establish service pension qualifying service for the purpose of having disability pension exempted from the Department of Health and Family Services income testing of daily aged care residents fees.
Signed:....../....../......
|
This DI should be read in conjunction with DI C13/98 which covers changes to aged care that have occurred since 1 October 1997.
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