If you need to live in residential aged care it’s likely you will need to pay aged care fees to cover the costs of your care and accommodation, which will be based on your assets and income. Your social security pension entitlements are generally included when calculating your income.
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There will be changes to the way the aged pension is calculated from 1 January 2017 and these changes may affect your ongoing aged care fees. It’s important to understand how these changes may affect you.
Under the assets test, you may hold assets to a certain value before your pension reduces. If the value of your assets is more than your relevant threshold, your pension entitlement will be reduced by $1.50 for every $1,000 of excessive assets.
The asset limits will increase when the changes are introduced, which will allow more pensioners to receive the full pension. But if the value of your assets exceeds your relevant limit, your pension entitlement will reduce by $3.00 for every $1,000 of excessive assets, instead of reducing by $1.50 for every $1,000 of excessive assets. Pensioners whose assets are higher than their relevant limit may lose or receive a lower pension.
Do you have a question? Email your request to alan@goulburnfinancialservices.com.au or call us on 02 4832 1001. If you would like to know more, please feel free to book a no obligation appointment to discuss your needs. We can be found opposite the round-about in Crookwell.
Alan Schaechtili of Crookwell Financial Services has over 15 years’ experience in providing financial advice. The purpose of this fortnightly column will be to discuss a topic of interest and provide general information about financial matters. See advertisment page 8.
