TRANSCRIPT – ABC QLD Statewide Drive with Pat Hession

ABC QLD Statewide Drive with Pat Hession
3 July 2014

5:15pm

E & OE

Subject: 1 July Aged Care changes

HESSION:

With me is the Assistant Minister for Social Services. Essentially that means he’s responsible for aged care. Good afternoon Senator.
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FIFIELD:
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Good to be with you Pat.
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HESSION:
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How much does it cost to get a place at an aged care centre?
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FIFIELD:
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Well it depends on your circumstances Pat. With the changes that come in on the 1st of July – and it’s important to say at the outset that these only apply to people coming into aged care from that date – It all depends on your means. So there are arrangements for people of low means, moderate means and higher means. And I’m happy to very briefly go through each of those if you’d like.???
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HESSION:
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I note that Shane Knuth, the local state member, is concerned about families losing the family home as a result of some of these changes that are coming in with that means test. How much in danger is the family home? How much of a responsibility should there be for someone to sell their family home if they want to get a nursing home place?
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FIFIELD:
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With the changes that are coming in on the 1st of July it continues the previous treatment that the family home had under the old arrangements . So the value of the family home is capped at $154,000 in relation to the assets test. It’s also very important to note that if the home has a spouse or another protected person living in it, then it’s completely exempt from the assets test. But the treatment of the family home is essentially unchanged from before the 1st of July to after the 1st of July.
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HESSION:
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Is it reasonable to expect someone would have to sell their family home or might be in a situation where they would have no other option but to sell the family home in order to finance going into a nursing home?
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FIFIELD:
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I think it’s important to just briefly go through each of the levels. Low means, moderate means and higher means. For people of low means, so that’s people with assets of less than $45,000 and income of less than $26,000. The only contribution that they will make is a basic care fee, which is at 85 per cent of the age pension. They won’t have to make any contribution to their accommodation. That’s fully covered by the Federal Government. For those people of moderate means, people with assets above $45,000, an income above $26,000. They pay a basic care fee, again 85 per cent of the age pension. They will make a contribution to their accommodation, but the Government will also make a contribution to their accommodation. And for those people of higher means…?
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HESSION:
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Can I just clarify on that point before we move onto the higher means. When you say a contribution what does that mean??
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FIFIELD:

It means that they will make a contribution which is the product of the new means testing arrangements. Previously for aged care, there was an assets test for accommodation and there was an income test for care. What that meant was that you previously had some people of high assets who were paying very little for their care, and some people of high income paying very little for their accommodation. So what combining the income and assets test seeks to do – in the new means test – is to provide a fairer contribution from people. So that those that do have some means, make a reasonable contribution to their care and to their accommodation.

HESSION:

But what is a reasonable contribution that’s the question isn’t it??

FIFIELD:
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I would encourage people to visit the My Aged Care website myagedcare.gov.au which has an estimator. Where people can plug in their assets. They can plug in their income. And that will give them an idea as to the care fees that they’ll be liable for and also whether they’ll be liable for a contribution to their accommodation. Just to complete the picture for those people of higher means with assets above $154,000 and…?
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HESSION:
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Is that high means though? Assets above $154,000?
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FIFIELD:

… and income above $63,000 a year. So it’s looking at both assets and income. For eople in that situation, they’ll pay the basic care fee, they’ll also pay a means tested care fee and they’ll also be responsible for 100 per cent of their accommodation costs. But I do have to point out at this point that there are some important protections in relation to care fees. There is an annual cap of $25,000 a year for care fees and a lifetime cap of $60,000 a year for care fees for that’s an important protection.

HESSION:

So to clarify on that, for anyone who goes into an aged care facility and a nursing home. They will never have to pay more than $60,000 for that under the current arrangements?

FIFIELD:

That’s for their care fees. So with aged care there is the care side of the equation and there is the accommodation side of the equation. In relation to means tested care fees there will be an annual cap of $25,000 and a lifetime cap of $60,000. People will still have to pay the basic care fee which is 85 per cent of the age pension and depending on their means they’ll also have to make partial contribution to their accommodation or cover the cost of their accommodation. But again, if someone is of low means, they don’t have to make any contribution to their accommodation costs. That’s fully met by the Federal Government.
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HESSION:
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You’re hearing this afternoon from Senator Mitch Fifield who is the Assistant Minister for Social Services. Senator, as you mentioned the website has plenty of information there. It lets you plug in your information, your personal details. It will only give you the maximum amount that might be required for what’s called a refundable deposit bond and in most cases that I’ve looked at for the local facilities, you’re looking at, at least $200,000 when it comes to the maximum refundable deposit bond. How refundable is that money though????
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FIFIELD:

It’s fully refundable and people do have the choice. In fact they’ve got a legislated choice that they can choose to pay for their accommodation by way of a lump sum, by way of a daily fee…

HESSION:

What’s the point of the deposit bond then if you get all of the money back? Or if the family gets all of the money back??

FIFIELD:

It’s there to cover the cost of your accommodation. You can elect, as I say, to pay it by way of a daily fee. Because the provider has the benefit of the interest that they earn from that lump sum. So the lump sum is refundable for the individual. The individual could elect to have a combination of a lump sum and a daily fee. They could also elect to have, if they choose that option, some of their daily fee deducted from that lump sum amount. So there is much greater choice under these arrangements in terms of how people pay for their accommodation. But also importantly, there are caps on what people can be required to pay for their care.

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HESSION:
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Well Senator just to finish up this afternoon. With the changed you’ve just introduced, should there be any need to revisit this issue in the near term? Is this a system that should be able to stand on its own two feet in? the current budgetary environment?
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FIFIELD:

These changes which by and large we inherited from the former Government were already legislated. I think in the broad they are a step in the right direction. But I’m going to be very carefully monitoring the real word outworking of these changes from the point of view of both providers and consumers.

HESSION:

So if you don’t have enough money prices will have to go up for residents?

FIFIELD:

This arrangement ensures that those who have the capacity to make a contribution do make a contribution…

HESSION:

But that’s what you’re monitoring isn’t it? You’re looking at how the bottom line comes across?

FIFIELD:

Looking at what the effect is on the providers because this is a new way of doing business. So we want to see how it works from their point of view. And also to see from an equity point of view, how it works from the point of view of consumers. So we will be very carefully monitoring how this plays out.

HESSION:

Senator thanks for your time this afternoon.

FIFIELD:

Good to talk.

HESSION:

Senator Mitch Fifield, the Assistant Minister for Social Services and the Manager of Government Business in the Senate.

ENDS