What is an income and means assessment in aged care?

An Income and means assessment is a comprehensive look at your income and assets undertaken by the government. It determines if you need to pay the means tested care Fee and if the Australian government will contribute to your aged care accommodation costs.

How aged care means test assessments work

The aged care means test assesses your income and assets to determine how much you contribute towards your aged care stay. This test helps ensure those with greater financial resources contribute more, while those with less pay less. Here's a breakdown of how it works:

 

Who needs an assessment?

Anyone considering entering residential aged care will need a means assessment.

 

What's assessed?

• Income: This includes pensions, superannuation, investments and rental income. For couples, half of the combined income is assessed.
• Assets: This includes your home (capped value applies), car, investments, savings and other valuable possessions.

 

The process

1. Application: You must fill out the Aged Care Calculation of your cost of care form (SA486) for an assessment through Services Australia via My Aged Care.
2. Details: You'll need to provide details about your income and assets. Services Australia may also access your Centrelink information.
3. Assessment: Services Australia assesses your income and assets to calculate your contribution.

 

The result

The means assessment determines two things:

• Accommodation contribution: This is the amount you may need to contribute towards the daily cost of your accommodation. The government may contribute some or all of this based on your assessment outcome.
• Means tested care fee: The aged care means tested care fee an additional fee that some people may be required to pay towards their care costs. It's also determined based on your means assessment. Use a means tested care fee calculator for a better idea of this cost.

 

Aged care means test assessment outcomes

There are three different categories of accommodation charges depending on your means assessment:

1. Fully supported: The government will pay the full costs of your accommodation based on your income and means assessment.
2. Partially supported: The government covers some of the costs of your accommodation, and you contribute the rest.
3. Self-funded: You pay the total costs of your accommodation.

 

Fully/partially supported

If you fall into fully supported or partially supported categories, your accommodation payment options include:

1. 1. Refundable accommodation contribution (RAC): This is a paid up in one lump sum. The Australian Government ensures full repayment to you if the aged care provider becomes bankrupt, insolvent or cannot themselves refund the lump sum balance. When you leave your Estia health home, it’s fully refunded to you or your estate, minus the cost of your stay.
   
   
2. 2. Daily accommodation contribution (DAC): This allows you to pay by DAC. You are charged as a monthly amount calculated using the Maximum Permissible Interest Rate (MPIR) set by the Australian Government and reviewed four times a year.
3. 
   3. Combination payment: This payment option consists of a part RAC payment supplemented with a DAC.

 

Self-funded

If you fall under the self-funded category, your accommodation payment options include:

• Refundable accommodation deposit (RAD): This is paid in one lump sum. The Australian government ensures full repayment to you if the aged care provider becomes bankrupt, insolvent or cannot themselves refund the lump sum balance. When you leave your Estia Health home, it’s fully refunded to you or your estate, minus the cost of your stay.
• Daily accommodation payment (DAP): This allows you to pay by DAP. You are charged a monthly amount calculated using the Maximum Permissible Interest Rate (MPIR) set by the Australian Government and reviewed four times a year.
• Combination payment: This payment option consists of a part RAD payment supplement with a DAP.

If you are self-funding your aged care costs, use our accommodation payment calculator to help you determine what you may pay.

 

Aged care means test assessments and payments

For more information on accommodation and living costs, visit our helpful aged care costs hub. You’ll also find resources on getting advice from a financial planner, respite care and long-term care.

Still need more information? Our friendly team is available and happy to help discuss payment options. Get in touch today at 1300 682 833.