Aged care reform delays could save you thousands – if you act soon
For those receiving home care, the 'no-worse-off principle' only applies to people who were approved for a Home Care Package on or before September 12 last year. Anyone approved after that date will transition to the new system once the reforms commence.
While the delay will save those individuals money in the short term, the real savings lie with those considering a move into residential aged care. That's because anyone who moves into an aged care home before November 1 will have their fees grandfathered under current rules.
One of the biggest changes to the cost of moving into aged care is the introduction of a Refundable Accommodation Deposit (RAD) exit fee, which allows providers to keep up to 10 per cent of your RAD over five years.
That's $75,000 on a $750,000 room – the maximum that can be charged without government approval. But in many capital cities RADs commonly exceed $1 million, and some high-end homes charge as much as $3 million. On those figures, the exit fee could be as much as $300,000.
Another significant change is the introduction of a daily hotelling fee – covering meals, cleaning and laundry – of up to $16. The government currently covers this cost for all residents. But under the new rules, people with modest assets will be asked to pay it themselves.
Four months is a short window of time. If you are on the edge of this decision, it's time to act.
Over five years, that's an extra $29,000 – another cost you can avoid by moving into care before the reforms take effect.
Perhaps the most overlooked cost is the change to the lifetime cap on means-tested fees. While the reforms remove contributions towards clinical care, they replace them with a 'non-clinical care contribution' that will be more expensive for many.
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