JDFP - Diversity by Design

Pre 1 July 2014

Key reforms to Australia’s aged care system came into effect from 1 July 2014.

For many residents, aged care reform introduced a user pays system where fees are based on the clients’ ‘means tested amount’ which includes both income and assets. This differs from the way fees and charges are calculated under pre 1 July 2014 rules, where accommodation payments were based on assets and ongoing care fees were based on income.

Another key reform is that all facilities are able to charge an accommodation payment, which may be paid as a combination of lump sums or ongoing payments, which differs from the pre 1 July 2014 system where only low care and extra services facilities could charge a lump sum accommodation bond.

As a result of the reforms, we now have two sets of aged care rules:

• Pre 1 July 2014 rules – applies to residents who first entered permanent residential aged care before 1 July 2014. Residents are grandfathered and remain under the pre 1 July 2014 rules even if they subsequently move facilities after 1 July 2014 and have a break of less than 28 days between facilities.

• Post 1 July 2014 rules – applies to residents who first entered care on or after 1 July 2014. The post 1 July 2014 rules also apply to residents who first entered permanent residential aged care before 1 July 2014 and subsequently move facilities after 1 July 2014 and ‘opt’ to be covered by the new rules. The new rules also apply where a resident first entered aged care before 1 July 2014, leaves a residential aged care facility and has a break of more than 28 days before entering a new facility after 1 July 2014.