These recently announced arrangements apply to residents/consumers of home care packages entering or commencing care on or after 1 July 2014. These changes affect how fees are calculated in residential aged care and home care, including how accommodation prices are charged.
Despite various claims of 'more choice' and 'better aged care services', the reality is that entering residential aged care has become much more expensive and extraordinarily complex than ever before.
If the time has come for mum or dad to move into aged care, you should have a plan that includes the following:
- Visit a reputable financial advisor - ask them if they are well-versed in advising in aged care matters. Ask for examples, and importantly, ask for costs up front. If they are experienced in this area then they should be able to provide an indication of costs involved, and what you can expect from their services.
- Locate an aged care facility that you think will over the level of care your mum/dad will need - checkout our Nursing home evaluation checklist for questions to ask
- Work through your financial options, and don't rely on the provider to do this on your behalf. We are aware of some staff receiving 'bonus payments' based on how much money they can extract from family members.
- Don't just sign the contract on the dotted line - get legal assistance on determining the legal implications of the contract you are entering into - remember, this is potentially the last place your mum/dad will be - you want to ensure there aren't any 'gotchas' in that legally binding contract in case of any unforeseeable event that may occur. Check our Legal Issues Columnist article on residential care agreements.
The following is an excerpt from an article written by CPSA on 1 July 2014, which encapsulates some of the issues facing consumers. We urge people to read the full article on the link below:
From 1 July 2014, everyone is means tested, because there is no longer a distinction between low care and high care.
So the pool of nursing home entrants being means tested has suddenly trebled in size.
Nursing homes are obliged to take in a certain number of concessional residents. These are residents who cannot afford to pay anything beyond the basic care fee, set at 85% of the basic full rate of the pension (the pension minus the supplements).
The minimum proportion of concessional residents in any nursing home is 40%, but up until now it has tended to be much higher because high care residents were not required to pay for their accommodation.
Now that nursing homes have three times the number of people who will potentially pay a bond, they are likely to want as many bond-paying residents as they can get. This means that they will want to stick to the minimum 40 per cent of concessional residents and charge the other 60% as much as they can.
Nursing homes must now publish their prices. In theory, this means that there are set accommodation bonds for each home and set daily accommodation charges. In practice, those published accommodation bond levels and accommodation fees are likely to have been set artificially high for the purposes of negotiation.
Nursing homes are likely to have published prices which they know full well that most people can’t afford.
Well, 'how much can you afford?', nursing homes will ask ...
This is the reality: if you (or you and your partner) have a house and you need to go into a nursing home, the nursing home proprietor is eyeing off your family home.
Some will tell you that as a result of these new rules starting 1 July 2014, you will receive better care.
This is a patent untruth.
Accommodation bonds and accommodation fees are to pay for accommodation, not care. They pay for the building, the gardens, the furniture and any other physical facilities, but not for care. The law does not permit it.
Accommodation bonds and accommodation fees are how nursing home proprietors make the bulk of their profits.
Source: Amazing nursing home means test - CPSA, 1 Jul 2014
