Mitch Fifield (Victoria, Liberal Party, Assistant Minister for Social Services) Share this | Hansard source

Thank you for your question. A little over a week ago some significant changes came into effect on 1 July in aged care. The first and most important thing to note is that there will be no changes to the financial arrangements for people already in care before that date. There were some significant structural changes. The first was that in residential aged care the distinction between high care and low care has been removed. Previously you could only pay a lump sum amount for low care. With the removal of the high-care/low-care distinction there will be greater choice for consumers in terms of how they pay for their accommodation. Consumers will have the choice of a lump sum, a daily fee or a combination of the two. There are also new means-testing arrangements because it is important that those people who have the means—who have the capacity to make a contribution—do so, but it is also significant that there is and will remain a safety net.

There really are two parts to aged care. There is the care side and the accommodation side. Previously there was only an assets test for accommodation and there was only an income test for care, so you could have a situation where people of high assets paid very little for their care and people of high means paid very little for their accommodation. Under the new means testing arrangements there will in effect be three tiers. For those people of low means—assets below $45,000 and income below $24,000—the only contribution they will have to make is a basic daily fee, which is 85 per cent of the aged pension. They will not have to pay anything towards their accommodation. For people of moderate means, they will pay that basic daily fee and a contribution to their accommodation. For people of high means, they will pay the basic daily fee and a means tested care fee, and they will also be responsible for all of their accommodation costs.