Income and Assets Assessment in Aged Care

What is an Income and Assets assessment for an aged care home?

An Income and Assets assessment is an assessment of your income and assets undertaken by the Government. It determines if you need to pay the Means Tested Care Fee and if the Australian Government will contribute to your accommodation costs.

What income gets assessed for a Home Care Package?

The assessment can include, but is not limited to income from:

• income support payments such as age pension, a service pension, or an income support supplement
• deemed (not actual) income from financial investments
• war widow/widower pensions and some disability pensions
• net income from rental properties
• net income from businesses, including farms
• superannuation and overseas pensions, and income from income stream products such as annuities and allocated pensions
• family trust distributions or dividends from private company shares
• deemed income from excess gifting

The My Aged Care income and assets checklist has a detailed list of what's included in a means assessment.

Download the checklist

What is a means assessment in aged care?

A means assessment determines if you need to pay the means tested care fee and if the Australian Government will contribute to your accommodation costs. The means assessment determines if you will have to pay the agreed room price.

The income-tested care fee is calculated at the rate of 50 per cent of income above the income free area (IFA) applicable to the person.

There are three different categories of accommodation charges depending on your means assessment:

1. Fully supported: based on your income and assets assessment the government will pay the full costs of your accommodation

2. Partially supported: based on your income and assets assessment the government covers some of the costs of your accommodation and you will be required to contribute the rest.

3. Self-Funded: this means that you pay the total costs of your accommodation

If you fall into fully supported or partially supported categories, your accommodation payment options include:

1. Refundable Accommodation Contribution (RAC): is paid up from in one lump sum, guaranteed by the Australian Government, ensuring full repayment to you if the aged care provider becomes bankrupt, insolvent or cannot themselves refund the lump sum balance. When you leave your Estia health home, it’s fully refunded to you or your estate.
2. Daily Accommodation Contribution (DAC): gives you the option to pay by DAC, charged as a monthly amount calculated using the Maximum Permissible Interest Rate (MPIR) set by the Australian Government, reviewed four times a year.
3. Combination payment: a payment option consisting of a part RAC payment supplemented with a DAC.
4. Drawdown payment: a payment option that may be available, whereby the DAC payment is deducted from your lump-sum RAC payment.

If you fall under the self-funded category your accommodation payment options include:

1. Refundable Accommodation Deposit (RAD): is paid up from in one lump sum, guaranteed by the Australian Government ensuring full repayment to you if the aged care provider becomes bankrupt, insolvent or cannot themselves refund the lump sum balance. When you leave your Estia Health home, it’s fully refunded to you or your estate, minus the length of the period of your stay
2. Daily Accommodation Payment (DAP): gives you the option to pay by DAP, charges as a monthly amount calculated using the Maximum Permissible Interest Rate (MPIR) set by the Australian Government, reviewed four times a year.
3. Combination Payment: a payment option consisting of a part RAD payment supplement with a Daily Accommodation Payment.
4. Drawdown Payment: a payment option that may be available, whereby the DAP payment is deducted from your lump-sum RAD payment.

For people that fall into the category of self-funded, our Accommodation Payment Calculator can help you determine the best way to pay. Our client relations team are available and happy to help discuss payment options. Get in touch today. 1300 682 833

For further information: Click here on Understanding Costs and on this page you will also find information on getting advice from a financial planner, respite care and long term care.