Costs

1. What could I be charged?

Residents in aged care can be asked to make two types of payment.

• Daily care fees contribute towards your daily living costs, such as nursing and personal care, meals, linen and laundry, as well as heating and cooling. These have two parts:
  - a basic daily care fee, and
  - an additional income-tested fee for residents who have a higher income.
• Accommodation payments contribute towards the cost of your accommodation. You only pay this if your assets exceed an amount set by the Australian Government. This Accommodation Payment is agreed with the facility upon or prior to entry and will be in the form of either:
  - an accommodation bond, if you are in low level care, or an extra service place (with low or high level care needs); or
  - an accommodation charge, if you are in high level care.

Only Residential Aged Care Facilities that are certified by the Department of Health and Ageing as meeting required standards of accommodation can charge accommodation payments.

2. How much will it cost to become a resident at a Cranbrook Care facility?

The cost to a resident at Cranbrook Care's facilities can vary considerably. Many residents are eligible for Government subsidies to help cover the cost of care and accommodation. Each resident is "means tested" by Centrelink and then the remaining cost needs to be covered by the resident. For further information regarding the cost of residential care refer to the government's web site www.health.gov.au or by calling their Aged Care Information Line 1800 500 853.

3. Where do I find out about costs?

Understanding costs can be daunting but it is no less important. The best thing to do is have a chat with your accountant or financial adviser. You can also contact our Executive Manager for more specific information. It is important to note that you can receive advice from financial planners who specialise in the aged care sector. Our Executive Manager has more information on how to contact them.

4. What is an Accommodation Bond?

An accommodation bond (the bond) is an amount you may be asked to pay when you enter a low care or high care extra service place. It is like an interest free loan to the aged care facility to help cover costs of the development of the facility.

The bonds can only be charged by an aged care facility that meets the Accreditation Standards.

An aged care facility is allowed to deduct monthly amounts, called retention amounts, from the bond. The Government sets a maximum retention amount for up to five years. This monthly retention amount remains the same from your date of entry. The balance of the bond is refunded to you or your estate, when you leave the facility.

5. What are Accommodation Payments?

There are two types of accommodation payments that may be payable to aged care facilities:

• Residents entering high level care other than on an extra service basis may be asked to pay an accommodation charge; and
• Residents entering low level care or an "Extra Service" place (at high or low level care) may be asked to pay an accommodation bond.

Recipients of respite care do not have to pay an accommodation payment.

6. How much bond will I pay?

There is no fixed amount for a bond. The amount of the bond is agreed between you and the Cranbrook Care facility. Bond amounts can vary widely between residents in an aged care facility as well as between homes even in the same locality.

7. How does the bond affect my basic daily care fee?

If you agree to pay a bond you may be asked to pay the non-pensioner basic daily care fee, even if you are a pensioner.

8. Will my home be "protected"?

When you enter the aged care facility, the value of your former home will not be counted as an asset if:

• your spouse or dependent child is living there;
• a carer eligible for an income support payment has lived there for two years; or
• a close relative who is eligible for an income support payment has been living there for at least five years.

9. What are my payment options?

There are a number of ways of paying accommodation bonds, including:

• lump sum;
• periodic (fortnightly or monthly) payment; or
• combination of lump sum and periodic payment.

If you agree to pay the bond as a lump sum you cannot be required by the service provider to pay that lump sum during the first six months following entry, although you can choose to do so.

However, you will need to agree to the size of the bond when you move in, and you may be charged interest on the bond amount from the time you enter the aged care facility, on amounts outstanding. Interest charged on the outstanding amounts is governed by Department of Health and Ageing.

10. What if I move to another aged care facility?

If you have previously paid a bond and then move to another aged care facility to receive low level care or on an Extra Service basis, your bond can be transferred to the second aged care facility. You cannot be asked to pay a bond to a second service provider that is higher than the amount refunded by the first service provider, unless there is a gap of more than 28 days between leaving the first facility and entering the second.

11. How do bonds affect pensions?

From 1 July 2005, lump sum accommodation bonds paid by residents in aged care facilities are exempt from the social security and Veterans' Affairs asset test. Also from 1 July 2005, aged care residents who pay a component of the accommodation bond by periodic payments are able to rent out their former home without the value of the home or the rental income affecting their pension.
The Government's free Financial Information Service, which is available through Centrelink to all older people, can give you information about these effects. You can make an appointment with the Financial Information Service by calling 13 23 00 or you can contact an independent financial adviser.

12. What are the safeguards for residents?

You cannot be asked to pay the bond unless you have entered a bond agreement.

This agreement sets out your rights and responsibilities. You have up to 21 days after entering an aged care facility to enter the bond agreement.

Where a person is unable to enter an agreement due to mental impairment, the agreement must be entered within 21 days of a guardian being appointed.

You can only agree to pay a bond when you enter the aged care facility and you cannot later be asked to pay more than you originally agreed to, even if your circumstances change sometime after you enter the aged care facility.

From 1 July 2006, under new prudential arrangements, when you pay a lump sum bond the service provider must:

• guarantee in writing to repay the bond balance within the statutory time periods, which is within 14 days of giving notice of your departure, on the day you leave if you notify your provider of your departure more than 14 days before you leave, within 14 days after you leave if no notice is given or in the case of death, 14 days after the approved provider is shown probate or letters of administration; and
• provide you with a copy of the bond agreement and a written guarantee within 7 days of the agreement being signed.

If the provider does not refund your bond balance on the day you leave, interest will be paid on your bond balance until it is refunded.

Furthermore, in the event a provider becomes bankrupt or insolvent, the Government will repay your bond balance entitlement, including any interest that has accrued on the bond balance.

13. What is Gifting?

Any amount given away from 10 May 2006 over $10,000 in a single financial year or $30,000 in a five financial year period will be included in a Centrelink assessment. As a result, you may not be eligible for Government assistance with your accommodation costs.