Help clients avoid bill shock from their first aged care bill.
People entering residential aged care may get a shock when they see their first invoice from the care provider. Invoices might show fees much higher than expected – sometimes hundreds of dollars a day higher. This might only be a temporary glitch, but it can cause considerable stress and cash flow problems in the first few months.
How well do you prepare your clients for this period?
The problem is with the means-tested fee. This fee is the individual’s contribution towards the cost of their care and could be up to $416.05 a day (with an overall annual cap of $33,309).
How much someone is asked to pay will depend on their financial situation and the amount of care they need. But the calculation of this fee requires an assessment by Services Australia (or Veterans’ Affairs), and that could take at least six to eight weeks after they have moved into care. It may take even longer if their affairs are complicated, or they are involved with private trusts, companies, or family businesses.
While waiting for the results of this assessment, the care provider will not know how much the person needs to pay, so the provider may estimate and charge an ‘interim means-tested fee’.
Each provider may have a different process for determining the interim:
Some providers charge the maximum of $416.05 a day.
Some providers set the fee based on an average paid by their residents.
Some providers use calculators to calculate the person’s expected actual fee and charge somewhere around that amount, or
If a financial planner has calculated the expected fee, some providers will charge that amount as the interim fee.
Whichever option the care provider chooses, if they charge the person too much, the excess does come back to them (as a refund or a credit). However, the pressure on cash flow may be difficult in those early weeks, especially if the interim fee is much higher than what is assessed to be affordable.
Tips to help your clients manage the interim fee
Ensure clients ask their aged care provider about the interim fee so they know what to expect.
Estimate the fee the client should be paying. Ask the care provider (or ensure your client asks) if they will accept that estimate as the interim fee.
Help clients avoid delays with the Services Australia (or DVA) assessment by filling in and lodging the means-test assessment forms as quickly as possible (or helping them too).
Ensure your clients have enough money in their bank account to cover these fees.