Major Changes to Aged Care: What You Need to Know
Starting from July, significant changes to Australias aged care system will come into effect, impacting accommodation and care fees for new residents. At Acton Wealth, we are dedicated to helping you navigate these updates with clarity and confidence. Heres what you need to know.
Why Are Changes Being Made
The aged care sector faces sustainability challenges, with a significant number of aged care providers reporting financial losses. The government has adopted recommendations from the Aged Care Taskforce to: Ensure those with greater financial capacity contribute more to their care. Target government support to those most in need. Encourage investment in aged care facilities to improve quality.
Key Changes to Aged Care Fees
Accommodation Fees
Accommodation fees cover the cost of your room and can be paid as a refundable lump sum Refundable Accommodation Deposit or RAD or a daily fee Daily Accommodation Payment or DAP. From January, the maximum RAD without special approval increases and will be indexed annually. Facilities will also introduce a retention amount deducted from refundable lump sums over five years.
Ongoing Care Fees
The current meanstested care fee will be replaced with a nonclinical care contribution, capped at 54,000 over a lifetime or four years of residential care, whichever comes first. A new hotelling contribution will be introduced for residents with assets above 144,500 or incomes over 27,840. This fee will cover nonclinical everyday services such as meals and housekeeping.
How Will These Changes Impact You
Existing Residents
If youre already in care before July, your fees will remain under the current system unless you choose to transition to the new rules or change providers.
New Residents
Depending on your income and assets, you may contribute more towards accommodation and care. However, the government projects that fully supported residentsthose with low income and assetswill not pay more. Age Pension recipients and part Age Pensioners will not experience increased fees.
Considerations Before Entering Aged Care
Timing
Entering aged care before July ensures fees under the current system. For those considering entering care after this date, planning ahead with financial advice is essential.
Alternative Options
The Support at Home Program will expand, offering tailored assistance to help Australians remain at home longer.
Room Preferences
Facilities will continue to offer a range of room options at varying price points based on features and services.
Maximising Financial Outcomes
At Acton Wealth, we recommend taking these steps to optimise your aged care financial planning:
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Understand Fee Structures
Review the differences between RAD, DAP, and the new contributions to choose the best option for your situation. -
Review Your Assets
Asset thresholds for contributions will influence the fees you pay. Consider strategies to manage assessable income and assets effectively. -
Seek Professional Advice
A financial adviser can help you navigate the complexities of aged care fees and maximise entitlements.
How Acton Wealth Can Help
We specialise in aged care financial advice, ensuring you make informed decisions to support your care and financial security. Our team offers:
Tailored Strategies
Customised plans for managing aged care costs based on your circumstances.
Comprehensive Guidance
Assistance with navigating government assessments and understanding fee structures.
Proactive Planning
Helping you prepare for future care needs with confidence.
Contact Acton Wealth today to learn how these changes could impact you and how we can help you plan for the future.
