Posted on September 15, 2015 by GSCPA Admin
We have received a number of enquiries from clients seeking information on whether they qualify for a WA Seniors Card or Commonwealth Seniors Health Care Card and how to apply for them. We have summarised the key points for each entitlement and trust you may find this information useful.
On 1 July 2015 the criteria to apply for a WA Seniors Card changed, details are provided below. The Commonwealth Seniors Health Care Card is available to self funded retirees who have reached Age Pension age and who are not eligible to receive the Government Age Pension. Legislation introduced from 1 January 2015 means that deemed income is now included in the income test associated with Account Based Pensions; details on eligibility and the changes are also summarised below.
WA Seniors Card – Department of Local Government and Communities
Seniors Card Holders are entitled to a range of government concessions and discounts of 10% to 50% off the price of goods & services:
- Entitled to receive a rebate of up to 25% on Water & Council Rate charges;
- A directory from over 500 businesses is posted to all Seniors Card holders every 2 years and can be sourced online.
To qualify:
- Aged 61 years or more as at 1 July 2015. The age eligibility will increase by one year every two years rising to 65 years of age by 2023-24;
- Working less than 25 hours per week (averaged over 12 month period);
- Permanent Resident of Australia.
The WA Seniors Card is a lifelong card that does not need to be renewed as long as the eligibility criteria are met.
The application Form is available on the Department of Communities website: www.seniorscard.wa.gov.au
Telephone 6551 8800 or 1800 671 233 (country free call)
Commonwealth Seniors Health Card – Centrelink
To qualify for a Commonwealth Seniors Health Card, you:
- Have reached Pension Age – currently 65 years or older
- From 1 July 2017 the qualifying age for Age Pension increases from 65 years to 65 years and 6 months, it will increase by 6 months every 2 years reaching 67 years by 1 July 2023
- Do not qualify for the Age Pension or Veteran Affairs benefits
- Are an Australian Resident
- Have an annual adjusted taxable income of less than:
- $51,500 singles
- $82,400 couples
- $103,000 couples separated due to ill health or respite care
Note – Adjusted Taxable income is the sum of:
- Taxable income as per your personal Australian Taxation Office Notice of Assessment
- Add total net investment loss – eg. rental property and financial investment losses
- Add any foreign income received that wasn’t taxable
- Add the value of any employer provided benefits above $1,000 – eg. Car, Health Insurance
- Add reportable superannuation contributions
- Plus deemed income from an Account Based Pension entitlement that was commenced on or after 1 January 2015 or if you were granted a Commonwealth Seniors Health Card on or after 1 January 2015. It includes income deemed from an Account Based Pension owned by a card holder’s partner who is aged 60 years or more.
The deeming rate applicable to an Account Based Pension entitlement from 20 March 2015 is as follows:
- For singles – 1.75% is applied to the first $48,000 of the Account Based Pension entitlement and 3.25% over and above $48,000;
- For couples – 1.75% will apply to the first $79,600 of the combined value of the Account Based Pensions and 3.25% over and above $79,600.
Based on the above rates, if you have no other Taxable income, you can qualify for the Commonwealth Seniors card if you’re Account Based Pension entitlement/s are below the following amounts:
- Single $1,606,770 Account Based Pension entitlement = deemed income of $51,500
- Couples $2,572,124 combined Account Based Pension entitlements = deemed income of $82,400
- Couple separated by illness $3,205,970 combined Account Based Pension entitlements = deemed income of $103,000
There is no asset test applicable to the Commonwealth Seniors Card.
The benefits are:
- If you hold a Seniors Card AND a Seniors Health Card you are entitled to receive up to a 50% rebate on annual Water and Council rate charges.
- Discounts on Pharmaceutical Benefits Scheme (PBS) prescription medicines
- Government provides financial incentives for GPs to bulk-bill concession card holders
- Reduction in the cost of out of hospital medical expenses through Medicare Safety Net
- Concessional travel on Great Southern Rail services (The Ghan, Indian Pacific and The Overland)
Apply for Seniors Health Card via Centrelink – Claim form and ‘Information you need to know about your claim’ via the Centrelink website www.centrelink.gov.au or contact Centrelink on 13 2300.
Cost of Living Rebate – Department of Communities
Annual payment to eligible Seniors Card Holder:
- Singles – $83.85
- Couples – $125.78 (both members must hold a Seniors Card and live together)
To claim a Cost of Living Rebate contact the Seniors Card Centre for the Application Form:
Email – seniorscard@dlgc.wa.gov.au
Phone (08) 6551 8800 or 1800 671 233 Toll free Weekdays 9am to 3pm.
Applications must be lodged by 31st May to be eligible for that year’s rebate payment.
Energy supplement
Paid quarterly in arrears on the basis you qualify for the Commonwealth Seniors Health Card and are in receipt of the Seniors Supplement. You do not need to make a separate claim for the supplement.
The amount will vary depending on your circumstances:
- Single – Up to $91.65 approximately per quarter
- Partnered – Up to $68.90 each approximately per quarter
If you would like us to email you the relevant application form for the WA Seniors Card or the Centrelink ‘Claim for a Commonwealth Seniors Health Card’ please contact our Superannuation Manager, Helen Cooper on 9316 7000 or email helen@gscpa.com.au.
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Posted on October 29, 2015 by GSCPA Admin
How much you could be asked to pay towards accommodation costs for aged care will depend on the financial situation of the person moving into care. If this is something that may impact you or your parents in the next 5 to 10 years, there are likely to be things that you should be doing sooner rather than later to ensure you have sufficient funds to cover the various aged care fees or reduce them.
This is a complex area. Financial advice needs to be obtained to determine the best option for your circumstances. GeersSullivan does not provide financial advice however our financial planning team at Lexington Financial Services can assist in this area.
New entrants to a residential aged care facility from 1 July 2014 are subject to a quarterly means test of both assets and income to determine the level of contributions they need to make towards the costs of both accommodation and ongoing health care. There are also subsidised home care services for older Australians who are eligible for residential aged care but prefer to remain at home.
An assessment is required by health professionals who are members of an Aged Care Assessment team (“ACAT”). ACAT team members assess whether a person is in need of care and whether the care required is either low or high level care. This assessment is funded by the Australian Government and free of charge to the applicant.
Once approved by ACAT, the process of looking for an appropriate aged care home can begin. Apart from the payments required by the facility, considerations to be addressed include:
- Accreditation and certification of the aged care home
- Financial stability of the provider
- The standard of the accommodation including amenities, qualified staff and staffing level
- Type of care and services provided, residency rules and rights
- Length of waiting period
Please refer to the My Aged Care website for additional information which includes an aged care home finder service.
Even if you have never previously dealt with the Department of Social Services / Centrelink, there is an Income and Assets Assessment form that determines the fees applicable to some care fees. If you do not complete and lodge the Income and Assets Assessment Form, you will not be eligible for any Australian Government assistance towards your aged care costs. This may mean you are asked to pay the maximum accommodation payment agreed with the provider and the full cost of the care fees. Accommodation Payments vary depending on the facility; an extra services provider could apply an Accommodation Payment of $875,000 for a single bedroom which includes an ensuite and small personal lounge room.
An aged care home may ask you to pay one or more of the following fees:
- Basic Daily Fee
- Accommodation Payment
- Means Tested Care fee
- Fees for Extra or additional services
A summary of the current fees is provided in the following table together with further details on each type of payment below. Please be aware that the daily fees increase on 20 March and 20 September each year in line with increases in the age pension amount and the Means Tested care fees are indexed annually.
It is worthwhile speaking to a financial adviser before completing any asset assessment forms.
Basic Daily fee
Contribution towards day to day living expenses such as meals, cleaning, laundry, electricity etc.
Accommodation Payment
Is made by either of the following or combination of both:
- Refundable Accommodation Deposit (RAD)
- Daily Accommodation Payment (DAP)
A new resident will have up to 28 days after entering an aged care home to decide whether it be a lump sum refundable accommodation deposit (RAD), a daily accommodation payment (DAP) or a combination of both. If a RAD is chosen, the resident has up to 6 months after entry to pay allowing time to sell assets if required. In the interim a DAP is paid.
The maximum amount of a RAD that a resident can be asked to pay must leave the resident with at least the minimum permissible asset level, currently $46,000 which is calculated as 2.25 times (rounded to the nearest $500) the basic single age pension amount at the time of entry.
Where a person does not have assets above $46,000 they would need to find an aged care facility with fully supported resident spaces available.
If the accommodation payment cannot be paid in full, the unpaid amount incurs interest. The Maximum Permissible Interest Rate is currently set at 6.15% as at 1 January 2015.
Means Tested Care fees
A resident’s obligation to contribute towards the cost of their ongoing health care is determined by the combined means testing of assets and income. The daily means tested amount is first applied towards the cost of accommodation with any remainder after deducting the maximum accommodation supplement applied towards the care fees. Therefore if the means tested amount is less than or equal to the maximum accommodation supplement, no care fee is payable.
Where a fee is applicable, Care fee payments are capped at $25,731.05 per annum currently with a lifetime cap of $61,754.55.
Extra Service Fees
From 1 July 2014 all aged care home providers will be able to offer additional amenities such as provision of pay TV, wine with meals and daily newspapers on an opt-in-opt-out basis and charge a fee to be agreed with the resident.
However some aged care providers have dedicated extra service status and for these residents, the extra service fee is compulsory rather than optional.
A calculator is available on the My Aged Care website that provides estimates of the income tested fee payable and information on what assets are assessable under the Assets Test and the Income Test.
Amongst all the discussion around retirement savings and how Australians should position their investments, little is said about Australians who are nearing their life expectancy, and how the expected cost of residential aged care should influence investment choices.
The first question for someone going into residential care is normally about their existing home. The decision that is made can have a significant impact on the financial outcomes for the resident.
Putting aside all discussion around emotional or sentimental aspects around what happens to the property is one thing; getting to the bottom of the financial impacts is also complicated. There are different considerations when one member of a couple can no longer be cared for at home and the need arises for entering residential aged care facility.
Should the need for aged care arise, the right planning will be beneficial for the resident and the estate. There are strategies that can be considered to minimise means tested fees.
Getting your strategy right is complex. The impact of not properly understanding decisions made can be expensive.
Please do not hesitate to contact our office or Lexington Financial Services directly on 9316 9066 should you require additional information.
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