Affinity Aged Care Financial Services is now known as Alteris Financial Group.

Couples entering residential aged care

Couples entering residential aged care

couples entering aged care

When a couple is entering aged care, the timing of their move will be critical as it will impact their Means Assessment.

If they enter on the same day, they will each have half the capped value of their home included in their assessable assets. Normally, this will result in neither of them being assessed as Low Means Residents.

For couples who enter on separate days, the house will be exempt on entry of the first, with half the value, up to the capped amount, assessed for the second. Depending on the value of the couple’s other assets, this may mean that the first person to enter will qualify as a Low Means Resident.

If the first person to enter is assessed as a Low Means Resident, when the second person leaves the home, the first person’s assessable assets will increase by half the value of the home, up to the capped amount. As a result, the first person’s Daily Accommodation Contribution (DAC) will increase and they might also be required to pay a Means Tested Care Fee. However, they will remain classified as a Low Means Resident.

Case Study

Bill & Mary are considering moving to an aged care facility where the market price Refundable Accommodation Deposit (RAD) is $500,000. They are full aged pensioners and their other assets are:

House $900,000
Bank Accounts $100,000
Home Contents & Personal Effects $ 10,000

Scenario 1:

If Bill & Mary enter care on the same day, they will each have assessable assets of:

House (capped value) $165,271.20
Bank Accounts 50,000.00
Home Contents & Personal Effects 5,000.00
TOTAL $220,271.20

Both Bill & Mary will need to pay the market price RADs; 2 x $500,000 = $1,000,000


Scenario 2:

If Bill moves to care while Mary is still living in the home, his assessable assets will be:

House (capped value) $ Nil
Bank Accounts 50,000.00
Home Contents & Personal Effects 5,000.00
TOTAL $ 55,000.00

He would therefore qualify as a Low Means Resident and would only be required to pay a Basic Daily Care Fee of $50.16 & a Daily Accommodation Contribution (DAC) of $4.33

When Mary also moves to care, there will no longer be a protected person living in the home. Consequently, half the home will be assessed for them both.

Mary will be required to pay the $500,000 RAD, or the equivalent Daily Accommodation Payment (DAP) of $81.64 per day plus the Basic Daily Care Fee of $50.16 and a Means Tested Care Fee of $1.51 per day.

Because half the house, to the capped value, will now also be included in Bill’s assessable assets, his fees will increase to the Basic Daily Care Fee of $50.16 plus a DAC of $56.14 (being the Maximum Accommodation Supplement) and a Daily Means Tested Care Fee of $1.51 – still a $25.50 per day or $8,212.50 per year saving had they moved in on the same day.