When there isn't enough money: help with fees and a room without a deposit

Many families worry that a parent with only the Age Pension, or very little in savings, won't be able to afford an aged care home. In most cases they can. The fee system is built so that people with less pay less, and the government covers much of the cost for people on low means.

No deposit needed

Nobody has to pay a lump sum for their room. Anyone can choose to pay for the room by the day instead.

Help with the room for people on low means

The means assessment decides whether your parent is on low means. Roughly, that's when the daily amount worked out from their means assessment is less than the government's maximum help with the room, $73.73 a day.

If your parent is on low means:

• the government pays some or all of the room cost to the home;
• your parent pays an accommodation contribution set by their assessment, which can be nothing at all;
• they can pay that contribution by the day, rather than as a lump sum; and
• they don't pay the hotelling or non-clinical care contributions.

Many full pensioners on low means pay only the basic daily fee, currently $68.93 a day, plus any contribution to the room their assessment sets.

Low-means status is decided when your parent moves in, and stays while they're in the same home. The amount of their contribution can still change if their means change.

Financial hardship help

If fees are still too much, your parent can apply to Services Australia for financial hardship assistance. If approved, the government pays some or all of certain costs directly to the home:

• the basic daily fee;
• means-tested contributions; and
• accommodation costs.

It doesn't cover optional extras such as the higher everyday living fee.

To qualify, your parent needs:

• a completed means assessment (not a choice to skip it);
• assets of no more than $48,270.30. Assets that can't be sold or borrowed against may be left out; and
• not to have given away more than $10,000 in a financial year, or $30,000 over five years.

Services Australia also looks at essential expenses, such as medical costs and private health insurance, and how much income is left after paying them. Apply with form SA462, with evidence of expenses over the past three months. Services Australia must decide within four weeks of getting a complete application. Help can start from the day your parent applied, or earlier if there's evidence the hardship began before then.

If fees fall behind

Aged care residents have strong security of tenure. A home can only ask someone to leave in limited situations, and only after following set steps. Those steps include written notice and making sure suitable other accommodation is available.

Not paying agreed fees for six weeks, for reasons within the resident's control, can be one of those situations. Most homes would rather agree a way forward than start that process, so it's worth raising problems early.

If you're falling behind:

• talk to the home early and ask about a payment arrangement;
• check the fee advice letter is correct and up to date;
• apply for hardship help if your parent may qualify.

If the home says your parent may have to leave, contact OPAN's free advocates straight away. Complaints can go to the Aged Care Quality and Safety Commission. A lawyer can advise on the agreement itself.

Getting an estimate

The Aged Care Costs calculator gives an estimate of the fees, with the home counted as it is today, and compares the ways of paying for the room.

Services Australia's Financial Information Service and OPAN can both help, for free, with the means assessment and hardship forms.

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