Article by Michael Horin, Director of Clarity Aged Care Advisors

THE Australian government is overhauling the Aged Care Act with significant reforms set to take effect on July 1 this year. By 2050, the number of aged care beds required in Australia is projected to grow by more than 400%, from 180,000 to more than 750,000. With nearly half of residential aged care providers operating at a loss in the 2024 financial year, these reforms aim to encourage the development of new facilities.

Key Changes to Aged Care Fees

  • Refundable accommodation Deposits (RADs) : Currently RADs (formerly known as bonds) are fully refunded when a resident leaves care. Under the new rules, providers will retain two per cent of the RAD per year for up to five years, totalling a 10 % retention amount.
  • Daily accommodation payments (DAPs) : Interest rates on unpaid RADs, currently locked in at the time of admission, will instead be indexed to Inflation (CPI) twice a year.
  • Basic daily care fee : This fee, set at 85% of the full pension, remains unchanged.
  • Hoteling supplement : Previously covered entirely by the government, this daily fee, which will start at $12.55, will now be means-tested, with residents contributing none, some, or all of it based on their financial circumstances.
  • Higher everyday living fee (HELF) : Replacing the current extra or Additional services fee that ranges from $0 to $100, this charge will be negotiated only after a resident has moved into care, with built-in cooling- off periods and regular reviews. It will also be indexed to CPI.
  • Non-clinical care contribution (NCCC) : The current means-tested fee has an annual cap of around $34k and a lifetime cap of around $82k. The new NCCC will replace this means tested fee.
    While clinical care will be fully funded by the government, residents will pay up to $101.16 per day, with no annual cap but a higher lifetime cap of $130,000.

As the July 1 deadline approaches, getting clarity on these changes will ensure you, or your loved ones, make the best decisions for the future.

For more information and updates, consult Michael Horin of Clarity Aged Care Advisors 03-96016814 or visit their website clarityagedcare.com.au

 

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