Q&A - Aged care lifetime cap
Find out what your peers are asking – based on real-life questions submitted to TechConnect.
How do I confirm total income tested care fees and means tested care fees paid?
By Janet Manzanero-Caruana, Senior Technical Services Manager
Q: I believe my client Jack has reached his lifetime cap for aged care fees ($68,012.98 at 1 July 2021) and is no longer liable for home care income tested fees and / or residential aged care means tested care fees.
How will he know when he has reached his lifetime cap?
A: Income tested care fees for home care and means-tested care fees paid by aged care residents count towards annual and lifetime caps.
The annual cap for home care residents depends on whether their assessed income exceeds the income threshold. As at 1 July 2021:
Single – exceeds $28,100.80 up to $54,220.40
Partnered (living together) – exceeds $21,814.00 up to $41,501.20
Partnered (illness separated) – exceeds $27,580.80 up to $53,700.40
Single – exceeds $54,220.40
Partnered (living together) – exceeds $41,501.20
Partnered (illness separated) – exceeds $53,700.40
* Based on the Schedule of Fees and Charges for Residential and Home Care from 1 July to 19 September 2021.
The annual cap for an aged care resident is $28,338.71 per annum regardless of income.
The lifetime cap of $68,012.98 includes both income tested care fees and means tested care fees.
Services Australia will advise Jack and his aged care provider when he has reached his annual or lifetime means-tested fee caps.
Once the cap is reached, the Australian Government will pay Jack’s means-tested or income-tested care fees through subsidy payments to the provider and Jack will pay the basic daily fee and/or any other costs such as accommodation and extra services.
Jack may contact Services Australia to confirm his current balance, however, the information is based on the provider’s monthly statements. The information on file with Services Australia is dependent on when the provider submits their reports.
Once the statements have been received and a reconciliation takes place, Services Australia will send a letter to Jack and his aged care provider advising if the caps have been reached. Jack can notify the provider to avoid any overpayments.
Where overpayments are made, the fees are adjusted in the next Quarterly Review. Quarterly Reviews are completed on 1 January, 20 March, 1 July and 20 September of each year.
Jack can also ask their provider for a summary of fees paid and you or Jack can keep a record of any income tested care fees and means tested care fees paid to ensure records are complete.
If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.
The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.