How to apply for residential aged care funding

The difficult decision for your parents to move from home care to aged care can be stressful, as they struggle to adjust to a new way of life. Money can be a contributing factor, as you or your parent tries to figure out how they will pay for their new residence – whether it be the sale of the family home or assistance from loved ones.

But there’s another option available through the government which is helping to relieve the financial pressures felt by many across Australia. Their ability to access the funding is dependent on how much income they receive and the value of their assets.

How to get an assessment

The first step is to fill out the form which can be downloaded from the government’s Department of Human Service’s website and completed online.

The questions are fairly simple and are based around what, if any, funds your parent receives from the Age Pension and the assets that they own. They will need to sign the papers, before being sent to the department along with supporting documents.

An assessment will then be completed and your parents will be notified on whether or not they can receive government subsidised aged care and how much exactly they’ll need to pay as their means tested care fee. This type of assessment is essential for self-funded retirees, or those who receive payments such as the Age Pension (Blind), Disability Support Pension (Blind), Carer Allowance, Mobility Allowance, Disability Pension or War Widow’s Pension without an Income Support Supplement.

If you require more advice, the government’s free Financial Information Service (FIS) is a great resource to help navigate the whole process.

When to get an assessment

The assessment can be done before or after your parents move into an aged care facility. The only catch is if your parents apply for government support prior to moving in, then the results of the means test can only be used for up to 120 days.

However, if their position changes and they acquire more assets or income, the government must be notified immediately to determine whether the amount paid will be changed.

If your parents are struggling to pay

The Australian Government offers extra support through financial hardship assistance for those who are finding it difficult to meet their regular aged care payments. Depending on your parent’s financial situation, they could have the cost of fees and accommodation reduced.

Starts at 60 expert Dana Sawyer has given an easy run down of what all these payments are which you can read here. However, the assistance won’t have an impact on the amount of additional service fees.

There are a few things that could prove your parents ineligible to receive the assistance, such as if they haven’t filled out the necessary forms, including an aged care fees income assessment (for residential respite care) or a permanent resident aged care request for a combined assets and income assessment form (for permanent residential care).

Meanwhile, they will be denied extra financial support if their assets are valued at more than $36,121.80 or they have gifted more than $10,000 in the previous 12 months, or more than $30,000 in the past five years. To understand what gifting is, take a look at the Department of Human Service’s overview on the topic. If they the criteria then the Department of Human Services will also check to see how much money your parent has left over after paying the essential expenses.

The list of essential expenses is quite long and includes everything from private health insurance and ambulance cover to wheelchair and mobility aids and regular funeral plan payments. The government’s My Aged Care website has a more extensive overview of what these payments are.

If your parents have more than 15 per cent of the basic Age Pension amount remaining, or $126.56 per fortnight, after paying these expenses, then it’s likely they won’t be deemed eligible for financial hardship assistance. It may take a little while for a decision to be made, with the department estimating a written response to the application for assistance within 28 days, so it’s best to get onto it early if your parents are finding it difficult to meet payments.