does the govt pay the difference between the forfeited amount (85% of pension) and the amount a self-funded client pays
Residential aged care (so called Nursing homes = NH) are funded through several streams
The government has determined all
services that a NH might be required to provide.
Nursing homes are a misnomer actually as the workers there are mainly Carers. The RN is usually only one person per shift.
In short the costs of a NH are:
1) Accomodation - the building/room/ ensuites - the capital cost of providing an aged care "residence"
2) Clinical care - the actual nursing care relating to health
3) Non clinical care - mobility/ personal hygiene/ social/ recreational activities
4) Meals/cleaning/laundry/heating/facility maintenance
The Aus Gov provides funding through:
1)The
AN-ACC funding Model which calculates the
clinical and
non clinical needs of every resident irrespective of financial means.
AN-ACC = Australian National Aged Care Classification
2) Supplements
- for specialised individual needs such as specialised, wound dressings, tube feeding, etc
-
Hoteling supplement- include everyday services such as catering, cleaning, laundry.
- Supplements are also provided to the NH if a resident is deemed by Services Australia to not have the means to fully pay the Residential accomodation deposit (RAD)
3)Capital grants
Residents (whether of means or no/low means) also provide funding to the NH through:
All prospective NH residents should get a Service Australia
mean assessment of their income and assets
Of course it is not compulsory to undertake this assessment. However a non assessed prospective resident will have to pay the full price
From the Means Assessment, Services Australia determine the amount payable by the individual prospective resident for:
1) Accomodation payments
- payable through a one off Residential accomodation Deposit (RAD) , or Daily accomodation payment (DAP ) if the resident does not have the lump sum.
- These payments are highly regulated by the AusGov with RAD amounts in excess of $750K requiring approval from the
IHACPA (Independent Health and Aged Care Pricing Authority). However it is common these days for the RAD to be nearly $1M depending on location.
2)
Means tested fees which has 2 components
(a) Hoteling contribution -this is supposed to contribute toward the Hoteling supplement that the Govt pays. Daily cap but no lifetime cap
(b) Non clinical contribution - this is supposed to contribute toward the non clinical component of the AN-ACC funding. Annual and lifetime cap of 4 years applies
3) The Basic daily fee
- which everyone pays regardless of means
- capped at 85% of the aged pension.
Summary
Basically those with no means will only pay the basic daily fee.
Those with means will pay the basic daily fee + proportionately according to their means, the accomodation payment and means test fees.
Some would say there is a subsidy from the Residents with means, to the residents without means - because some pay more and some pay less and the extent that the Goverment does not have to fund 100% of residential aged care costs means that some residents are assisting the government to cover the costs of those without means.
There are safeguared for those who are of low means:
(1) Residential Aged Care providers are required to maintain a certain % of supported residents in their facilities.
- Some would suggest this is evidence that there is some amount of cross subsidy.
(2) Admission to a NH is still based on clinical need.
(3) The Aged Care Act prohibits discrimination on basis of financial means.
While these guardrails exist, I think those with means might get in faster.
Like my father. He still drives his car and he applied and got in with no waiting list, though I would class him as borderline.
Additionally, the Self funded have an advantage with a greater selection of accomodation types including single rooms.
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