How Centrelink Asset Assessments Affect Aged Care Accommodation

Depending on your financial situation, you may be asked to pay part, or all, of your residential aged care fees if it your income and assets allow you to do so.

The fees for aged care you may be required to pay include:

  • A Basic Daily Fee
  • A Means-Tested Care Fee
  • Accommodation Fees
  • Additional Optional Services Fees

Anyone seeking to gain government assistance for aged care accommodation fees are required to have both their income and assets assessed by Centrelink.

How the Centrelink Asset Assessment for Aged Care Accommodation Works  

Your income and assets assessment test will be carried out by the Department of Human Services or the Department of Veteran’s Affairs and will determine how much assistance you are eligible to receive from the Australian Government.

Your assessable income includes:

  • Government Income Support Payments – Aged Pension, Service Pension or Income Support Supplement
  • Income From Financial Investments – Deemed, Not Actual
  • War Widow or Widower Pensions
  • Net Business Income
  • Net Rental Property Income
  • Family Trust Distributions
  • Dividends From Private Company Shares
  • Some Disability Pensions
  • Deemed Income From Excess Gifting
  • Superannuation and Overseas Pensions, and Income From Income Stream Products Such as Annuities and Allocated Pensions

Your assessable assets include:

  • Bank, Building Society and Credit Union Accounts
  • Cash
  • Term Deposits
  • Cheque Accounts
  • Friendly Society Bonds
  • Managed Investments
  • Listed Shares and Securities
  • Loans and Debentures
  • Shares in Unlisted Public Companies
  • Gold and Other Bullion
  • Household Contents and Personal Effects
  • Foreign Assets Including Investments, Business Interests and Real Estate
  • Investment Property
  • Special Collections Such as Stamps, Art Works or Antiques
  • Private Trusts, Family Trusts and Private Companies
  • Net Retirement Village Entry Contributions
  • Refundable Deposits Paid for Accommodation in an Aged Care Home
  • Gifts Over $10,000 in One Financial Year or $30,000 Over Five Financial Years

To begin your assessment you will need to first lodge a request for a combined assets and income assessment form (SA457) after which you will receive a notice of residential aged care fee advice for your situation, valid for the following 120 days.

You can choose to lodge your request for asset and income assessment prior to moving into an aged care facility if you wish. However, the Department of Human Services or Department of Veteran affairs must be notified of any changes in your financial situation. Depending on the changes to your situation you may be sent revised fee advice or asked to submit another assessment form.

If you are a couple seeking government assistance, it is important to know that you will be assessed on half of your combined income and assets, regardless of who owns the assets.

Part 2: What You’ll Need to Pay

The amount you will be asked to pay for aged care accommodation depends on the results of your Centrelink assets assessment.

Depending on your assessment results, you will be placed into either one of the three following categories:

  1. No Accommodation Fees
  2. Contributions to Your Accommodation Fees
  3. Full Payment of Your Accommodation Fees

If at any time you are unable to pay your aged care accommodation fees due to financial hardship you can apply for financial hardship assistance. If this is the case the Australian Government will pay your fees in part or on full.

Financial hardship assistance will aid in covering your basic daily fee, means-tested care fee and accommodation, but will not contribute to any optional extra service fees.

How 2017 Changes to the Centrelink Age Pension Will Affect You

From January 1st 2017 there were changes made to the asset tests used for calculating how much you receive from the Centrelink Age Pension. To avoid any unforeseen issues relating to your Age Pension, it is important you know what these changes are, and how they will affect your fortnightly payments.

Below you will find a brief breakdown of the latest changes (prior to March 19 2017) so you can be better informed and properly budget for the future.

Part 1: Changes to Centrelink’s Aged Care Pension in 2017

Test Free Limits

If your total assets fall below the asset-test free limit relevant to your situation, you will not suffer a reduction in your pension payments. At the moment, a family home is not counted as part of the assets test, though, the Australian Chamber of Commerce and Industry (ACCI) is currently proposing its inclusion in the future.

The table below contains a list of the revised test free limits for both FULL and PART Aged Pensions. These asset test limits are effective from the 1st of January 2017 to the 19th of March 2017.

Claimant Situation Asset Test Free Limit – FULL Aged Pension Asset Test Free Limit – PART Aged Pension
Single Homeowner $250,000 $542,500
Homeowner Couples $375,000 $816,000
Single Non-Homeowner $450,000 $742,500
Non-Homeowner Couples $575,000 $1,016,000

Part 2: What will be Affected by These Changes 

Prior to the 1st of January 2017, those with assets exceeding the previously stipulated test free limits would receive a $1.50 reduction in their pension each fortnight for every $1,000 in surplus. This reduction is known as the Taper Rate.

After this date, those with assets exceeding the newly adjusted limits will now be liable for a $3.00 reduction for every $1,000 in excess.

If you’re assets are found to exceed the revised limits for the PART Age Pension your fortnightly payments will be cancelled.

 If your payments were cancelled as a result of these changes on 1 January 2017, you should have been sent a letter from the Department of Human Services explaining why this has happened.

You will also be automatically issued a Low-Income health Care Card and a Commonwealth Seniors Health Card. Because your payments have been cancelled under the new assets test adjustments, you will be exempt from meeting any income test requirements otherwise needed to receive these cards.

If you were receiving the maximum pension benefit prior to 1 January 2017, your pension payments should not have changed. Although changes to aged care fees will apply, as your assets will have an impact on the subsidisation you receive from the Australian Government.