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The New Aged Care Reforms. What do they mean for you?

By Advertising Feature - 9 December 2013 4

Adult son out for a walk with his father, who has alzheimers disease

In June 2013 the government passed a number of laws, changing the aged care system. The changes are intended to:

    1) increase the options available for those requiring aged care

    2) provide flexibility and choice on how residents can pay their accommodation costs

    3) align fees for aged care services more closely to individual circumstances.

Many of these reforms affect the entire aged care system, however the key changes affecting those moving into a residential aged care facility will start on 1 July 2014.

For new residents entering residential aged care on or after 1 July 2014, the key changes include:

    • removing the current distinction between a high and low-level residential care

    • providing all residents with the option to pay for their accommodation fees as a lump-sum or as a regular payment

    • limiting the amount of an accommodation payment, meaning a higher amount can no longer be negotiated

    • no longer allowing a facility to deduct a monthly retention amount from the accommodation amounts paid

    • allowing residents to select the types of extra services they receive from their selected facility

    • replacing the current income-based care fee with one that is based on an income and asset assessment

    • removing the daily care fee cap and replacing it with an annual and lifetime cap.

While the reforms do introduce some more flexibility and transparency, it is likely that aged care fees will be higher for clients entering on or after 1 July 2014 when compared to a resident in similar circumstances who entered before that date.

What’s the next step?

Here at Green Associates we are equipped to help you or loved ones transition to aged care. To find out more about these reforms or to understand how the changes may impact your personal circumstances and how we can help, please contact us on 02 62825474 to make an appointment.

For our top ten things to consider before entering aged care, click here. Remember, getting advice can save you thousands of dollars every year.

Trina Wood
Senior Financial Planner
Green Assocaties

What’s Your opinion?


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4 Responses to
The New Aged Care Reforms. What do they mean for you?
trinawood 4:45 pm 10 Dec 13

miz, yes, the new rules provide choice about whether to pay your fees as a lump sum or as a regular payment, removing the distinction between low and high care. The current rules usually result in a lump sum for low care and ongoing payments for high care. The rules are complex and there are many variables outside the norm.

Many people seek advice after the family home has been sold, when it is too late. You should always seek advice prior to taking such action as it is sometimes better to keep the home, if possible.

trinawood 4:39 pm 10 Dec 13

I agree with curmudgery that for most, this will mean increased costs. Under the current rules once you are in care you are only assessed on your income and charged an additional fee where you income exceeds a set limit. The new rules include the asset-tested fee, which is in addition to the income-tested fee.

The important thing is to know the rules and arrange your finances to minimise the fees you pay.

miz 7:32 am 10 Dec 13

Does point 2 mean that there will be a rental package option? I have always thought it to be truly unfair and wrong that people unlucky enough to need care in their twilight years are forced to sell off their home just to get a place in an aged care facility.

curmudgery 4:03 pm 09 Dec 13

It’s been our almost universal experience that:
Increasing options costs more. Providing flexibility and choice costs more as does aligning fees to individual circumstances. Removing distinctions, providing payment options, changing the negotiable parameters, adding services selection and rule-changing all cost more. These cost increases will be presented in a most positive way (possibly with a logo).

The overall quality of service will fall, of course, due to increased costs.

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