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AGED CARE eNEWS | Winter 2016


From the desk of Shaun Akroyd

Aged Care Guru

Does the recent drop to the cost of Aged Care help everyone?

On the first of July the Maximum Permissible Interest Rate changed from 6.28% to 6.01%. Of coursShaun Akroyd | Aged Care Gurue a reduction in the MPIR means a reduction in income for aged care providers – a $500,000 RAD now has an equivalent DAP of $82.33p.d versus $86.03p.d under the old rate. But it’s not all happy days for the residents either.

The reduction in the MPIR means that the market price resident who was going to pay a DAP of $86.03p.d now pays $82.33p.d … but let’s look at what the impact is on a low means resident.

Jack and Shirley have been happily married for 60 years, unfortunately Jack’s care needs mean that he needs to move into aged care. Jack and Shirley have a house that will be exempt as Shirley is living there, $250,000 in the bank and $10,000 in personal effects. Jack’s Daily Accommodation Contribution (DAC) is $40.14p.d. Whether Jack moves into care before or after 1 July, his DAC will be $40.14p.d however if Jack wishes to pay for the cost of his accommodation by Refundable Accommodation Contribution, the date he moves (and relevant MPIR) could make a substantial difference.

*The maximum RAC Jack can pay in the first 28 days is $78,500. In the first scenario Jack and Shirley would be left with $16,702 in their bank accounts, in the second they are left with just $6,221.

Email us now to get the latest Bravien Aged Care Handbook


Technical Update

July 1 brings with it indexation… and a number of changes to Aged Care and Pension thresholds. The following is a summary of some changes to note.

Age Pension changes from 1 July 2016
While the Full Rate of Pension remains unchanged, there have been changes made to a number of thresholds which will see part-pensioners receive an increase in their pension entitlement.

Changes to the Lower Income Thresholds:

Changes to the Asset Thresholds:
The Lower Threshold for Assets:

*Different rates and thresholds apply to people receiving payments under transitional arrangements

The Granny Flats and Retirement Village Entry Contribution Limit has increased from $149,000 to $151,500

The Funeral Bond Exempt Asset Threshold has increased from $12,250 to $12,500.

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