This can benefit people who:
- have a means tested amount just under the threshold (currently $56.14 per day)
- do not have the capped value of a former home included in their means tested amount assessment
Potential Benefits:
- In some cases, strategies can be put in place prior to the date the person permanently enters aged care, to reduce their means tested amount to below the threshold (currently $56.14 per day) to qualify as a low means resident
- Strategies such as gifting (i.e. $10,000 per financial year or $30,000 over 5 years) or funeral bonds (maximum $13,000 for 2018/19) may reduce means tested amount below threshold
- Low means residents pay an accommodation contribution (rather than an accommodation payment) which may result in lower accommodation costs
- If a person entered aged care as a low means resident they will remain a low means resident even if their asset and/or income increase in the future.
- A person can choose to drawdown DAC from RAC
Things to be aware of:
- Before implementing strategies to qualify as a low means resident, always check that the person will be able to enter their facility of choice and that the room is of a standard that meets their needs
- Where the capped value of the former home is included, it is not possible to reduce their means tested amount below the threshold (currently $56.14 per day)
- This strategy is only effective where the persons means tested amount exceeds the threshold (currently $56.14 per day) by a relatively small amount
- Strategies to reduce the persons means tested amount below the threshold (currently $56.14 per day) must be in place before the date of permanent entry to residential aged care
- In some cases, the accommodation contribution may be higher than an accommodation payment
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