What is a Means Tested Care Fee?
A means-tested care fee is the extra contribution towards the cost of care that residents may need to pay on top of the basic fee. A means tested care is paid if you have assessable income and assets over certain thresholds. This effectively reduces how much the government pays on your behalf.
What is the Maximum Aged Care Means Tested Fee?
Your means-tested care fee can be anywhere between $0 and $403.24 per day, subject to annual and lifetime caps. If you don’t complete the paperwork required (or choose not to disclose your finances) you will pay your maximum daily fee but still have the benefit of the annual and lifetime caps.
Your means-tested fee is recalculated monthly based on changes to rates, thresholds, and your financial situation. To ensure the fee is calculated correctly, you need to keep Centrelink updated on any changes to your income and assets.
What is the Means-Tested Fee Annual Cap?
The annual cap is $34,174.16. Once a resident reaches the annual cap, they will no longer have to pay any means tested care fee until the next anniversary of the date they first entered the aged care home.
What is the Means-Tested Fee Lifetime Cap?
The lifetime cap is $82,018.15. Once a resident reaches the lifetime cap, they will no longer have to pay any means tested care fees. The Government will then pay for your care costs.
An individual entering Aged Care may also be subject to pay a basic daily care fee, an accommodation payment and an extra service fee. Read more in our Aged Care Guide.
Income and Assets for the Means Tested Care Fee
Assessable Income
Assessable income for the Means-Tested Care Fee includes, but is not limited to:
- Government income support payments.
- Deemed income on financial investments (e.g. cash, term deposits, managed funds and superannuation in the accumulation phase for a person over age/service pension age)
- Deemed income on gifts over the allowable thresholds (deprived assets)
- Net rental property income.
- Overseas Pensions
- Income from annuities and allocated pensions
- Business income
- Dividends from shares
- Taxable income of a family trust or private company.
If the person moves into aged care after 1 January 2016 and the former home is rented, rental income is included. Before 1 July 2016, rental income was exempt income if some or all of the accommodation costs were paid by daily payment.
Assessable Assets
Assessable assets for the Means-Tested Care Fee includes, but is not limited to:
- Cash in the bank and any other financial investments (term deposits, insurance bonds, managed funds, shares, gold and bullion)
- Investment Properties and holiday homes.
- Motor vehicles
- Boats and caravans
- Household contents and personal effects
- Superannuation and rollover funds by a person who is Age Pension age or older
- Income stream products (although some exemptions for non-commutable products purchased before 20 September 2007)
- Any gifts made that are worth more than $10,000 in a single year or more than $30,000 in a five year period
- Businesses and farms, including goodwill
- The surrender value of life insurance policies
- Loans made to family trusts, members of the family, organisations etc.
- Collections held for trading, investment or hobby purposes.
- The attributed value of a private trust or private company if deemed to be a controller of that trust or company or an associated party is the controller, or the person has transferred money into the trust or company.
- Any amount paid as a Refundable Accommodation Deposit (RAD)
When dealing with a couple, half of the total assets and income is considered to belong to each individual, irrespective of legal ownership.
The value of the former home is assessable up to a capped value of $206,039.20 (as at 20 September 2024). However, it is an exempt asset if a protected person is living there. A protected person includes:
- partner or dependent child,
- a carer eligible for an Australian income support payment has been living there for at least two years or
- a close relative who is eligible for an Australian income support payment has been living there for at least five years.
At Progressive Financial Solutions, our goal in the Aged Care space is to remove the added financial challenges you will face when placing a loved one into an Aged Care facility, allowing you to focus on the care of your loved ones. You can read more about our Aged Care advice services here.