Aged care financial hardship assistance - assessment 065-05030010

Item

Question

1

Signature requirements

The current signature requirements for the SA462 Aged Care Claim for financial hardship assistance differs from the Aged Care Calculation of your cost of care signature requirements.

When the SA462 form is completed by an authorised representative on behalf of a care recipient, the ‘Declaration’ at Question 14 must be signed and the section ‘If someone signs on your behalf’ at Question 15 must be completed.

Where the care recipient is deceased:

• only the executor of the estate or person holding a letter of administration can sign/act on their behalf
• any previous power of attorney or guardianship orders are no longer valid

2

What if it appears the care recipient has intentionally placed themselves in hardship?

Financial hardship (Hardship) assistance is available to care recipients who do not have sufficient means to pay aged care fees and/or accommodation payments due to circumstances beyond their control.

When determined the circumstances that caused the hardship was not beyond the care recipient’s control, such as choosing not to sell an asset, the asset will be treated as assessable. Care recipients /nominees can request for a review of the decision.

If a determination cannot be made, escalate to LPS.

3

How long can I grant a hardship claim for?

Services Australia has the discretion to determine a hardship period in line with the financial circumstances of the care recipient and can grant Hardship up to 3 years from the date of determination. This is in addition to any backdated periods. For example:

• The hardship claim start date is in the past
• the care recipient started to experience hardship in paying their aged care fees a date 6 months ago in the past
• the claim is backdated to the date hardship commenced 6 months ago, and
• the hardship is granted for a period that ends in 3 years from the date the determination is made

Where a care recipient has no prospect of a change in their circumstances in the foreseeable future, hardship assistance is granted for a period of 3 years.

4

How long can a temporary hardship reason can be used for?

A person is considered to be in temporary hardship where their situation is likely to improve in the near future, for example 6 months.

Where a customer has no other income or assets, apart from the asset that is unreasonable to sell, and there is no prospect of a change in circumstances in the next 6 months, the care recipient would not be considered to be in temporary hardship.

5

How is the end date coded?

When granting a hardship claim, the end date is determined by the grant duration minus 1. For example:

• 6 month hardship grant: 1/8/24 – 31/1/25
• 12 month hardship grant: 1/8/24 – 31/7/25
• 3 year hardship grant: 1/8/24 – 31/7/27

6

What if a care recipient’s claimed expenses are not covered in Table 5 Essential Expenses?

If there is a charge on the care recipient’s income, and

• the care recipient does not have a choice over the expense, and
• the payment of aged care fees cannot take precedence over the payment of the claimed expense, and
• it is for the benefit of the care recipient, then
• the expense should be accepted

An example of a charge on a care recipient’s income is expense that occur due to a contract that is current e.g. a bank loan.

This should be clearly noted in the care recipient’s Customer First and ASCP records for future hardship assessments.

7

What dates should essential expenses evidence cover?

For regular recurring expenses (food, transport, pharmaceuticals etc), the SA462 form (question 2) requests that documentation is provided to support their claim for periods up to 3 months prior to the start date of the hardship claim.

Note: Service Officers need to be satisfied the evidence provided supports the care recipient’s financial circumstance.

For annual or one off expenses (rates, insurance, purchase of wheelchairs etc) evidence should be supplied within the 12 month period prior to the start date of the hardship claim.

If there is a change in circumstances, care recipients are required to complete a new application and provide updated documentation.

8

Can an expense be accepted if no evidence of the expense is provided?

Yes, if a care recipient writes an amount over the threshold for an essential expense, amounts up to the threshold listed in Table 4 List of allowable essential expenses can be accepted and used in the calculator. A note should be included in the calculator when accepting essential expenses with no evidence.

Evidence is required to accept any amount that is over threshold amount.

9

Can an expense be accepted if no details are completed on the claim form?

No, if a care recipient does not complete the essential expense field supplied, with no supported evidence supplied:

• the expense will not be included
• even if there is a threshold amount where an expense can be accepted

For example:

• the threshold for pharmaceuticals is $80
• the care recipient leaves this field blank on the claim form, then
• the expense will not be included in the assessment as the care recipient has not claimed for that expense category

Where evidence of expense has been provided, the delegate has the discretion to follow up with either the care recipient or nominee to confirm if the expense is to be claimed.

Clearly document the discussion and outcome on the care recipient’s record for future hardship applications.

10

What if a care recipient’s request for an unrealisable asset scenario is not covered in Table 6 - Unrealisable Assets?

A care recipient can nominate which asset/s they want disregarded (treated as unrealisable) on the Services Australia hardship claim form. A delegate will decide whether there are valid reasons why the asset/s can be treated as unrealisable, for example may be unable to be sold or borrowed against.

If the delegate determines there are:

• valid reasons why the property cannot be sold, this should be clearly noted on the record in a progress of claim before the hardship claim is continued
• no valid reasons why the property cannot be sold, then the property will be an assessable asset unless further evidence is provided to meet the criteria in "A property the care recipient cannot sell"

11

Can I accept a statutory declaration as evidence?

A statutory declaration can be accepted by an APS4 and above as evidence, when no other evidence is available, for the following scenarios:

• a joint owner of property is unwilling to provide a statement they do not wish to sell
• where an immediate family member is residing in the property

Note: Services Australia should follow statutory declarations requirements as set out in the Federal Register of Legislation - Statutory Declarations Regulations 2023

For a statutory declaration to be accepted it needs to:

• be on the correct Commonwealth legislated form (not individual state form)
• be witnessed by persons before whom a statutory declaration may be made
• Addresses the eligibility criteria and why they are unable to provide the required document
• Ensure appropriate evidence is supplied with the state dec (e.g. rates notice or title deed)

If a determination cannot be made, escalate to Local Peer Support (LPS).

12

What if the care recipient / nominee wants a review of decision?

Decisions made to request information and/or to withdraw an assessment if requested information is not given, under 44-31 (5) and 44-31 (6) are not listed as reviewable decisions under the Aged Care Act 1997. A new claim would be required if the care recipient / nominee wished to be considered for aged care financial hardship assistance.

If a customer requests a review of decision regarding a grant or reject decision, or a hardship period, see Request for an explanation or application for a formal review.

13

What if the prepopulated fees are not correct in ACMPS calculator?

• Check if there is a period of CSR to zero for ITCF or MTCF
• If MTCF is too low, add the difference as an expense in the calculator
• If MTCF is too high, add the difference as income in the calculator

Fee Type – Post 1 July 2014

Care recipient contribution is the amount the care recipient is liable to pay for each fee type

Hardship - Fee reduction amount for service and Consumer Price Index (CPI) changes)

Basic Daily Fee (BDF)

Remains constant for hardship period

Consumer Price Increase (CPI) will increase fee reduction amount

Means Tested Care Fee (MTCF)

Will change if MTCF rate changes due to changes in income, assets, or other circumstances

The assessed care recipient contribution will be deducted from subsidies paid to the service

Fee reduction amount is applied from start date and not reviewed unless requested

Daily Accommodation Contribution (DAC)/Refundable Accommodation Contribution (RAC)

Will change if DAC rate changes due to changes in income, assets, or other circumstances

The care recipient contribution will be deducted from accommodation supplement paid to the service

Fee reduction amount is applied from start date and not reviewed unless requested

Refundable Accommodation Deposit (RAD)/Daily Accommodation Payment (DAP)

Remains constant for hardship period

Exception: if DAP changes due to combined payment/draw down from RAD, a manual review will be required when requested

Fee reduction amount is applied from start date and not reviewed unless requested

The service is eligible to receive their maximum Means Test Accommodation Supplement (MTAS) less any care recipient contribution amount. MTAS paid to the service may not be equal to the fee reduction amount.

Fee Type – Pre 1/7/14

Basic Daily Fee (BDF)

Remains constant for hardship period

CPI will increase fee reduction amount

Service will be topped up to the full BDF amount with a BDF hardship supplement and this will increase with CPI

Income Tested Fee (ITF)

Will change if ITF rate changes due to changes in income

The assessed care recipient contribution will be deducted from subsidies paid to the service

Fee reduction amount is applied from start date and not reviewed unless requested

Accommodation Bond

Remains constant for hardship periods

Fee reduction amount is applied from start date and not reviewed unless requested

Accommodation Charge

Remains constant for hardship periods

Fee reduction amount is applied from start date and not reviewed unless requested

Fee Type – Pre 2008

Concessional Supplement Bond (Pre 2008)

Remains constant for hardship periods

Fee reduction amount is applied from start date and not reviewed unless requested

Concessional Supplement Charge (Pre 2008)

Remains constant for hardship periods

Fee reduction amount is applied from start date and not reviewed unless requested

Item

Description

1

Fortnightly income assessable for hardship claims

Assessable income is worked out the same way as a means assessment, see Aged care means assessment Resources page.

In Customer First view the total income details on RCA Income Assessment Summary screen (RIAS).

For aged care hardship assessments, total income is made up of:

• total pension income less Adult Pension Supplement Minimum (PSMIN) amount. See Rates and Thresholds for more details about rates and supplements
• Energy Supplement (CES on Payment Summary screen)
• Rent Assistance (RA)
• deemed income
• foreign pension
• superannuation
• earned income - including income in one period (IOP)
• any other income

2

Assessable assets for hardship claims

Assets are assessed as per means assessments, so the principal home is exempt for:

• home care
• respite care
• residential care when a protected person resides in the home
• all hardship assistance claims need at least 3 recent consecutive bank/credit card statements

Item

Description

1

Non-allowable expenses - residential care

• Extra Service Fees in residential care
• This fee covers the delivery of additional services or lifestyle extras than the average provided by the service provider. This includes higher standards of accommodation and food choices
• Amounts paid for additional care and services other than the standard care
• Capital refurbishment fees and asset replacement contributions

See the Aged Care website for information on charging fees for additional care and services in residential aged care including capital refurbishment type fees.

2

Non-allowable expenses - all care types

• Amounts spent by an authorised third party on items/activities that do not benefit the care recipient
• Amounts funded or jointly funded by other specialist services (for example, through the National Disability Insurance Scheme (NDIS))
• Travel and accommodation for holidays
• Cigarettes or other tobacco products
• Companion animals (pets) including working dogs on rural properties, guard dogs and corrective services dogs
• Expenses incurred for companion animals should not be included in the calculation of essential expenses

Note: for NDIS participants, the care recipient is responsible for BDF and any extra / additional service fees. Staff are to review the care recipient’s NDIS plan to determine what aged care fees NDIS will fund.

Listed cross billing payments are for the cost of ‘subsidies and supplements that the government pays’ for care recipients in aged care, not for payments made by a care recipient for their care. These are not an allowable expense for hardship assessment.

Therefore, if the care recipient’s aged care fees are not listed as being funded in their NDIS plan, they are an allowable expense and are to be included in the assessment of financial hardship.

3

Allowable expenses - all care types

• Allowable essential expenses are expenses a care recipient must pay to meet their daily living needs while in care
• A care recipient's legal obligations are not necessarily negated when moving into residential care. While it may be reasonable to anticipate an asset may be liquidated when a person moves into residential care, it is not mandatory. As such, a person's obligation to pay items such as a mortgage, council rates, insurance costs and utility bills remains
• Some essential expenses are legislated, while other costs may be discretionary
• Discretionary costs can be assessed on a case by case basis
• Escalate to Local Peer Support (LPS) if assistance is needed
• All hardship assistance claims need at least 3 recent consecutive bank/credit card statements
• See Table 5 for a list of expenses, thresholds and verification requirements

4

Non-discretionary expenses

• Non-discretionary items involve expenditure that is required by a contract or other commitment and are generally costs associated with living expenses (mortgage/rent, food, and utility bills), debts and taxes. This does not include personal loan or credit card repayments
• Services Australia has the discretion to assess if the item is non-discretionary in nature and determine if it should also be included as an essential expense
• If an item is not currently included in the list of essential expenses, escalate to LPS for assistance

Essential expense

Monthly expense amount ($) before evidence is needed

Type of evidence accepted

Extra information

Aged care fees

No monthly threshold

Residential care - not low means only:

• A copy of the residential care agreement or aged care account statement showing the RAD/DAP amount the CR is liable to pay
• If a care recipient has previously paid a partial lump sum, the DAP may have been adjusted from the original agreement
• Statement from provider is required to confirm current DAP amount
• A statement can be used along with the accommodation agreement to confirm the accommodation costs

All other care types - evidence not needed

All care types

All fee and accommodation payment types

Ambulance cover

Evidence needed for all amounts claimed

Receipts must include:

• name
• date of transaction
• amount
• frequency of payment

All care types

Assistance or service animals:

• Help individuals who have post-traumatic stress disorder (PTSD), dementia, disabling illnesses such as multiple sclerosis (MS) or physical disabilities
• These animals have public access rights under the Disability Discrimination Act 1992

Emotional support animals (ESA):

• Help individuals with mental disability and is dependent on a doctor's recommendation
• ESAs do not have public access rights under the Disability Discrimination Act 1992

Evidence needed for all amounts claimed

• Letter from organisation that gave the assistance/service dog (or similar)
• Letter from health specialist
• Invoices or receipts for the expenses
• Evidence the animal's expenses are:
• not funded or jointly funded by the Australian Government (that is NDIS or home care package program), or
• the expense can be refunded through pet insurance

All care types

Essential expenses are restricted as follows, to the extent that they are not paid for or reimbursed by other means, for example NDIS, pet insurance etc.:

• Food
• Vet expenses including visitation costs and vaccinations
• Flea and working treatments
• Medications prescribed by a veterinarian
• Dietary supplements prescribed by a veterinarian, for example vitamins, minerals
• Bedding, for example dog/cat beds, blankets, heat pads
• Shelter, for example dog kennel, horse stable
• Protective wear, for example coats, jumpers, horse blankets, paw boots, goggles, leads and harnesses
• Toys, for example Kong, tennis ball, food maze
• Grooming costs
• Boarding expenses, for example care recipient goes into hospital or respite care, but not for recreational holidays
• Dog walking service when care recipient is unable to

Centrelink debt repayments/withholding

No monthly threshold

Check Customer First - Payment Summary (PS) or Withholding Instruction (OPWH) screen

All care types

Court appointed trustee fees - management of a care recipient's estate

Evidence needed for all amounts claimed

Receipts must include:

• name
• date of transaction
• amount

If a trustee statement is provided as evidence, it must clearly identify the management care fee for the care recipient.

All care types

Includes State Trustee/Public Trustee and Guardians.

Cost of maintaining the principal home

Evidence needed for all amounts claimed

Supporting evidence must:

• clearly identify the care recipient's expenses
• verify the address of the principal home
• include a receipt or other evidence of payment

Evidence examples:

• rent receipts
• lease agreement
• bank statements clearly showing rent paid
• check ACS for rent details
• rates notice
• retirement village fee receipt
• rental bond agreement/statement from landlord showing expense
• body corporate fees receipt
• mortgage statement documenting minimum repayments
• insurance statements
• maintenance receipts must include:
• work undertaken
• date of transaction
• amount

All care types

• Rent or mortgage payments
• Rental bond amounts
• Body corporate fees
• Retirement village fees
• Rates
• Home insurance - includes both building and contents insurance
• Home maintenance:
• Includes repair and replacement costs to maintain the home. For example, pest control, gutter cleaning, and plumbing
• Excludes services the home care provider can help with. For example, cleaning, lawn mowing, gardening, and home modifications to help independent living (for example, handrails)

Food

$1086 per household

Evidence required only if costs are over threshold.

Evidence example: receipts that clearly identify the purchases are food items

Home care

Funeral plans:

• paid periodically
• excludes pre-paid funerals

Evidence needed for all amounts claimed

Receipts must include:

• name
• date of transaction
• amount

All care types

Health Insurance

Evidence needed for all amounts claimed

Receipts must include:

• name
• date of transaction
• amount
• frequency of payment

All care types

Medical

Evidence needed for all amounts claimed

If receipts confirm the PBS safety net threshold has been reached, then the threshold amount can be used

Receipts must include:

• name
• date of transaction
• amount

Note: do not include any amount covered by other government schemes

All care types

Expenses can include:

• GP and specialist’s visits
• x-rays
• blood tests
• artificial limbs
• artificial eyes
• hearing aids
• contact lenses (monthly cost)
• prescription glasses (1 pair per year)
• dental care - includes:
• dentist fees
• cost of dentures
• motorised scooters and wheelchairs
• only include if purchased in the last 12 months
• include ongoing fees to maintain/repair item
• walking frames and canes

Personal alarm service

Evidence needed for all amount claimed

Receipts must include:

• name
• date of transaction
• amount

Home care

A copy of the recipient’s care plan to confirm that this aid is not currently being funded through the home care package.

Pharmaceutical

$80

Evidence needed - only if over the monthly threshold amount

Over above amount needs 3 consecutive itemised:

• pharmaceutical statements
• schedules, or
• receipts

All care types

• Prescription medication
• Non- prescription medication. For example:
• Paracetamol
• Vitamin supplements
• All costs of packaging medication. For example:
• Webster pack or similar

Telephone/Internet (combined cost):

• landline
• mobile
• internet

$100

• Evidence needed - only if over the monthly threshold amount
• If evidence required, receipts must clearly identify that the expense is for the care recipient. Landline and internet (other than mobile) must also include residential care address

All care types

Residential care:

• Include if the expense was entered into directly between the care recipient/their family and the phone carrier
• Do not include if the care recipient indicates the provider charges an additional service fee to cover phone expenses

Transport costs:

• registration
• repairs
• insurance

$100

Home care/respite care and eligible residential care recipients:

• Evidence needed - only if over the monthly threshold amount
• Above threshold amount needs evidence. For example:
• car loan agreement
• insurance statements
• registration receipt
• vehicle repairs receipts
• taxi fare receipts
• parking receipts
• public transport fares receipts

Eligible residential care recipients:

• Care recipient must verify the transport cost relates to a medical appointment
• Receipts needed for the cost of the transport. For example:
• taxi fares
• parking receipts
• public transport fares

Home care:

• public transport costs
• vehicle registration
• vehicle repairs
• vehicle insurance
• car loan repayments

Residential care:

• The expenses above only apply if the partner (or dependent child) resides in the care recipient's former principal home
• Transport costs are only allowable if they relate to medical appointments

Utilities (principal home):

• gas
• water
• electricity
• sewerage

$200 per utility

• Evidence needed - only if over the monthly threshold amount
• If evidence required, receipts need to verify that the expense was incurred for the former principal home

All care types

• If the utility bill is in relation to the person's home/former home, it should be considered an essential expense
• A person’s obligation to contribute towards the expenditure of the family home is not cancelled out simply because that person resides in residential care

Residential care:

• The allowable threshold (of $200 per month per utility without verification required) applies if the partner (or dependent child) resides in the care recipient's former principal home

Item

Description

1

A property the care recipient cannot sell

This does not include retirement villages. See Item 5

Any property, including the care recipient’s family home that cannot attract a buyer and has:

• been marketed for a period of at least 6 months
• an asking price is no higher than 10 per cent above the market value test, and
• had one price reduction in a 6 month period

Evidence required:

• valuation from a real estate agent, or similar
• document showing the original asking price
• document showing the property has been actively on the market for at least 6 months
• document showing that there has been at least 1 price reduction over a 6 month period
  Note: home care recipients are not expected to sell their principal home

If evidence is available that the house was put on the market within 2 months of entry to care, hardship assistance will begin from the date of entry to care. Otherwise, hardship assistance will begin from the date the hardship claim for assistance was lodged.

For ongoing hardship claims, if the property is still not sold, evidence of additional reductions to the sale price every 6 months needs to be provided to reflect customer is genuinely trying to sell the property.

Caveats

The presence of a caveat on a property title is not a legal restriction that would prevent a person listing a property for sale. A caveat listed on the title of a property indicates a third party has an interest in the property, for example due to outstanding loans (mortgages), or court ordered property settlements.

A care recipient that is the sole owner of a property with a caveat on the title can still sell the property with the caveat present.

Structural Damage due to natural disasters

Services Australia should receive evidence of the structural damage and the delay experienced in accessing tradespeople due to the volume of work created by a natural disaster. In these instances, it is reasonable to accept the property as an unrealisable asset for temporary financial hardship assistance.

Acceptable evidence would include insurance company documents and information from qualified trades people.

Overseas Properties

For hardship purposes, overseas properties are treated the same as properties in Australia. Foreign sanctions (restrictions imposed on activities that relate to particular countries) do not prevent the sale of property held overseas or the transfer of the proceeds of sale to Australia.

Evidence is required supporting that properties are unable to be rented where vacant or sold or where an authority such as a Power of Attorney made under Australian legislation is not recognised overseas

Dual Occupancy/Duplex

Where a dual occupancy is unable to be subdivided it can be classified as an unrealisable asset for hardship purposes.

2

Treatment of Gifts and Loans if a third party is involved.

If a care recipient has lent money, then the amount lent is deemed a financial asset for both social security and aged care assessment purposes and would be included in the care recipient and partner's assets when determining eligibility for assets hardship for either social security or aged care purposes.

For a loan to be disregarded, they would need to demonstrate that it was unrealisable which would generally require them to take legal action against the loanee to recover the money. In some cases, where action is taken, and a legal opinion is provided that the amount is not likely recoverable escalate to Local Peer Support (LPS) for a determination.

3

A property the care recipient cannot borrow against

If the reason a care recipient is in hardship is temporary (situation is likely to improve within 12 months), the care recipient may be able to borrow against a property by seeking assistance from banks, finance companies (or similar institutions) or government body, e.g. Rural Assistance Authority. If the care recipient’s attempt to borrow against a property has been unsuccessful, the value of the property can be excluded from their assets.

For example, a person who owns substantial business assets and who is experiencing temporary hardship is required to attempt to borrow by offering their business assets as security.

No evidence is required.

4

A property that an immediate family member lives in

This includes:

• an immediate family member who has lived in the property for at least 10 years
• evidence is required in the form of bank statements, driver licence or other documents showing the immediate family member has lived in the home for at least 10 years
  Note: timeframes for unrealisable assets are applied per person. That is, each individual needs to meet the 10 year timeframe - not multiple near relatives meeting one 10 year timeframe
• an immediate family member who has previously been the sole carer for the care recipient in the care recipient’s family home
• evidence will be required, e.g. a statement from a treating medical practitioner
• the care recipient's child with a disability who lives in the property to promote their independent living
• evidence will be required, e.g. a letter from a treating medical practitioner which give details of the child’s disability. No evidence is required if the child has been assessed as eligible for a Disability Support Pension payment

Note: a care recipient may own multiple properties that may meet the criteria of an asset that cannot be sold or borrowed against.

Temporary absence could reasonably be considered to be a circumstance in which the person in question is not currently occupying the home, but they have not established residency elsewhere and is expected to return when the purpose of the temporary absence is achieved.

5

A unit or apartment in a retirement village

When a retirement village unit or apartment is the care recipient’s principal home, it is regarded as an asset that cannot be sold or borrowed against when:

• the retirement village management will not market the unit or apartment for an extended period of time and has not marketed the property within the last 6 months, or
• the unit or apartment has been on the market for at least 6 months and cannot attract a buyer. There must also have been at least one price reduction in a 6 month period

Evidence required:

• accredited valuation
• document showing the asking price
• document showing the length of time a property has been marketed
• letter from the retirement village management explaining why the property has not been marketed or that the property has been actively marketed with at least one price reduction over the last 6 months

Note: where the Retirement Village management is selling the unit – this is outside the individual's control and a request for verification regarding reduction of sale price would not be appropriate.

Where the care recipient/authorised person is selling the unit – this is within the individual's control, it would be appropriate to request verification for reduction of sale price.

6

Jointly owned property

This applies when the other owner does not want to sell the property. It does not apply to property owned with the care recipient's current partner.

Evidence required:

• copy of the title deed or rates notice showing joint ownership of the property
• statement(s) from the other property owner(s) confirming they do not wish to sell the property

A care recipient may advise they are not able to obtain a statement from the joint owner. For example, there is an Apprehended Violence Order (AVO) preventing contact and/or evidence provided that legal action has been taken/being pursued.

The care recipient may then provide a Commonwealth statutory declaration. See the FAQs table for more information.

Note: rental income received will still be taken into account when considering entitlement to assistance under the hardship provision.

7

Farming properties

Another person is reliant on the farming property for their main source of income. If a person has taken other employment because of a reduction in income for situations like drought, they may still be considered reliant on the property for their main source of income.

• Any approval of hardship assistance would be time limited taking into consideration the period of the drought declaration (for example)
• Business tax returns for at least 2 years showing the name of the person who relies on the business are required as evidence
• Hardship assistance ends 12 months from the date the hardship claim was lodged or the date the person stops working on the farm

Note: in situations where the home is exempt from the assets test, curtilage (land surrounding the home) in excess of 2 hectares on the same title as the care recipient's former home may be assessable, as is any land on a separate title.

8

Lump sum compensation payments

The care recipient must provide a letter from the insurance company showing that the lump sum compensation payment is for the care recipient's partner. The partner is not living in residential or respite care, and the payment was included in the care recipient’s means assessment.

9

Frozen assets

Assets that cannot be used or sold in any way, generally due to a court order:

• Care recipients with assets in frozen funds can apply to their fund for relief under the Australian Securities and Investments Commission (ASIC) hardship measures
• Care recipients should apply for redemption of the asset under the fund’s hardship provisions
• Care recipients must provide a letter from the fund showing the outcome of their application
• Further information is available on the ASIC website regarding frozen funds and hardship payments
• Hardship assistance will end 6 months from the date the hardship claim was received. If hardship assistance is still required after 6 months the care recipient will need to reapply with new evidence (a new letter from the fund showing another attempt to claim hardship payments)

Note: if a hardship relief payment is provided by the fund, the Service Officer will need to ensure that the deemed income from the relief payment is not included in the means assessment.

10

Misappropriation of funds

A third party deliberately and illegally uses a care recipient’s money. This may be:

• for their own personal use
• gifts made at a time the care recipient was incapacitated, or
• for another unauthorised purpose

Financial hardship assistance may be granted:

• if investigation is underway to determine if legal proceedings for recoupment are warranted
• if legal proceedings have begun to recover the funds

If advised recoupment of funds is not possible, escalate to Local Peer Support (LPS) for determination.

Evidence required:

• letter from the care recipient's solicitor stating that legal proceedings have begun to recover the funds or that it is not possible to recoup the funds
• evidence of the care recipient’s incapacity at the time of the gift (doctor’s report or Aged Care Assessment Team/Aged Care Assessment Service results)

Note: if a care recipient claims to be in financial hardship as a result of ‘misappropriation of funds,’ they need to provide a letter of evidence form their solicitor to demonstrate that proceedings have begun to attempt to recover the funds. This may not necessarily result in the care recipient and/or the perpetrator having to attend court. The funds that were misappropriated must also have been part of the assets that was included in the original aged care means assessment.

Eligible care recipients have the option to obtain free legal assistance and grants via Legal Aid. Eligibility for this service is dependent upon meeting a means test criteria. If the care recipient does not qualify for the service, then they may not be deemed to be in financial hardship and therefore ineligible for free legal assistance.

11

Rented properties

Where a care recipient is the sole owner of a property and is receiving rental income, hardship assistance may be considered where 1 of the following applies:

• the property cannot be sold, or a loan taken out against it, see Item 1
• the property has been marketed for at least 6 months with 1 price reduction over the marketing period
• the property is rented to a near relative or child with a disability, see Item 3

12

Assets

Where the assessable assets exceed the assets threshold for the basic Age Pension (including associated supplements) the care recipient may still qualify if

• some or all of the care recipient's assets are deemed assets that cannot be sold or borrowed against, and
• this results in the total assessable asset value falling below the Age Pension threshold

See Table 8 below for current rates.

13

Loans to private trust or company

Hardship assistance is not available to care recipients who have loaned money to a private trust or company.

The following will apply:

• Income is deemed on the outstanding loan amount, regardless of whether the care recipient is a trust or company controller or non-controller
• If the care recipient has handed over control of a private trust or company, all assets held by the trust or company are considered gifted and subject to the gifting rules

The customer has the option of forgiving the loan. See Assessing and recording loans and liabilities for trusts and companies.

Prior to any action the customer can discuss the impacts of the change with:

• a Financial Service Officer (FIS), or
• an Aged Care Specialist Officer (ACSO), or
• a Complex Assessment Officer (CAO)

14

Cash/Bank Withdrawals

Where a care recipient is claiming hardship and bank statements show large cash withdrawals, evidence detailing the nature of the expenses incurred and the amount paid should be fully documented to determine the care recipient has not intentionally put themselves in hardship. In the absence of evidence of what the customer's funds were used for the amount should be assessed as a gift.

Unable to access funds: This decision would be at the discretion of person assessing the customers hardship application. They would need to decide if the customer has demonstrated that they do not reasonably have access to the funds.

Item

Description

1

Accommodation payment types

Pre 1 July 2014:

• Accommodation bond is paid as:
• a lump sum
• a periodic payment, or
• a combination of both
• Accommodation charge, always paid as a daily amount

Post 1 July 2014:

• Refundable Accommodation Deposit (RAD) - paid as lump sum
• Daily Accommodation Payment (DAP), or
• A combination of both

Care recipients who are low means:

• Refundable Accommodation Contribution (RAC) - lump sum
• Daily Accommodation Contribution (DAC)

See also Aged care fees and charges - accommodation payments

2

How lump sum accommodation payments are assessed

Lump sum accommodation payments are not assets that cannot be sold or borrowed against for hardship assessments.

• If a care recipient has paid a lump sum accommodation payment and the balance is above the hardship assistance assets threshold, they are ineligible for hardship assistance
• If both members of the couple are residing in permanent residential care, and
• a lump sum payment has been made by either member of the couple
• the lump sum remains an assessable asset subject to the 50%/50% split for hardship assistance
• A care recipient can have a DAP deducted from their RAD when they request it in writing
• Any amount specified in Fees and Payments Principles that the care recipient has agreed to pay in writing can be deducted when agreed by the care recipient and the provider

Pre 1 July 2014

• A pre 1 July 2014 care recipient needs to negotiate a change to the bond amount with the provider:
• if they have agreed to an accommodation bond above their means (above the allowable threshold based on their assessed assets)
• Reject the hardship claim if the care recipient does not provide evidence of the attempt to renegotiate
• If the accommodation bond amount is not able to be renegotiated, and evidence of this has been provided:
• the accommodation bond can be assessed as an asset that cannot be sold or borrowed against

Post 1 July 2014

The post 1 July 2014 accommodation payment arrangements give the care recipient and the provider the flexibility to negotiate an accommodation price greater than the care recipient's net assets.

A care recipient can choose to pay the accommodation in a:

• lump-sum refundable accommodation deposit (RAD)
• daily accommodation payments (DAP), or
• a combination of both

For hardship assistance, there is no requirement for the care recipient to renegotiate the RAD/DAP with the provider, even if the payment amount is greater than the care recipient's total assessable assets.

Hardship assistance is applied as a daily subsidy. Hardship assistance cannot be granted if a RAD above the threshold has already been paid. However, it can be granted where:

• an unpaid liability exists for a RAD, or
• partial payment below the threshold has been made and the total of all remaining assets (including partial RAD payment) is below the threshold

3

Other options to alleviate hardship

• A refundable deposit is defined as a:
• refundable accommodation deposit (RAD), or
• refundable accommodation contribution (RAC)
• A daily payment is defined as a:
• daily accommodation payment (DAP), or
• daily accommodation contribution (DAC)
• A provider must deduct a daily payment (or any other amounts as specified in the Fees and Payments Principles) from a refundable deposit if the care recipient has requested this in writing
• In agreements where the care recipient has elected to pay their accommodation payment via a combination of refundable deposit and daily payments, it is possible to draw down on the refundable deposit to the pay the daily payments
• If the provider refuses to vary the agreement to deduct daily payments from a refundable deposit, the refundable deposit remains an assessable asset
• The care recipient will need to discuss the matter with the provider or the Aged Care Complaints Commissioner
• Care recipients may be eligible for an income support payment, a payment under the asset hardship provisions or qualify for the Home Equity Access Scheme

Effective date

Assets threshold (1.5 x annual Age Pension including the pension and clean energy supplements)

Fortnightly income threshold (15% of Basic Age Pension excluding supplements)

20 September 2024

$44,631.60

$157.07

20 March 2024

$43,535.70

$153.09

20 September 2023

$42,771.30

$150.38

20 March 2023

$41,496.00

$145.73

20 September 2022

$40,033.50

$140.52

20 March 2022

$38,516.40

$135.12

20 September 2021

$37,732.50

$132.33

20 March 2021

$37,155.30

$130.25

20 September 2020

$36,827.70

$129.09

20 March 2020

$36,827.70

$129.09

20 September 2019

$36,402.60

$127.56

20 March 2019

$36,121.80

$126.54

20 September 2018

$35,735.72

$125.16

20 March 2018

$35,396.40

$123.93

20 September 2017

$34,881.60

$122.10

20 March 2017

$34,643.70

$121.25

20 September 2016

$34,206.90

$119.69

20 March 2016

$34,082.10

$119.22

20 September 2015

$33,813.00

$118.26

20 March 2015

$33,547.80

$117.30

20 September 2014

$33,317.70

$116.50

1 July 2014

$32,969.20

$114.90

Item

Description

1

Temporary COVID 19 Policy – Principal Home

Assess the principal home as an asset that cannot be sold or borrowed against before it is on the market if:

• COVID-19 enforced travel restrictions have stopped family from helping a care recipient to prepare the principal home for sale, and
• sale of the asset is prevented by the travel restrictions

2

Temporary COVID 19 Policy – Investment property no longer generating income due to COVID-19

Investment properties that were no longer generating income due to COVID-19 were classed as an asset that cannot be sold or borrowed against because the person is:

• in temporary hardship, and/or
• it is unreasonable to sell the asset

3

Travel restrictions prevented the sale of the principal home

Assess the principal home as an asset that cannot be sold or borrowed against before it is on the market if:

• COVID-19 travel restrictions applied during 2020 and 2021
• COVID-19 enforced travel restrictions stopped family from helping a care recipient to prepare the principal home for sale, and
• sale of the asset was prevented by the travel restrictions

In these cases:

• the initial requirement for the principal home to be on the market for a minimum of 6 months with at least one price reduction did not apply
• code the asset as one that cannot be sold or borrow against for:
• the period of the enforced travel restriction, plus
• an additional 2 months to allow the family to prepare the property for sale

When the travel restriction ended, the principal home is considered an asset that cannot be sold or borrowed against again when:

• the home has been on the market for a period of 6 months with at least one price reduction, or
• it meets the definition of an asset that cannot be sold or borrowed against for another reason. For example, the asset is jointly owned, and the other person refuses to sell

Note: the requirement for the principal home to be on the market for a minimum of 6 months, with at least one price reduction, did not change during the COVID-19 pandemic period. It is still expected that a care recipient sells their principal home or borrows against the asset to pay for their aged care costs.

4

Investment property no longer generating income due to COVID-19

Many care recipients are dependent on the income generated from rental properties to fund their aged care costs. Due to the Government’s COVID-19 restrictions, a care recipient may have had a substantial reduction in income because they:

• were unable to conduct their usual business of leasing the property as either long term or holiday rentals
• did not have the ability to service a loan agreement over the asset

These restrictions may have resulted in an inability for the care recipient to meet their aged care costs.

Investment properties no longer generating income due to COVID-19 were classed as an asset that could not be sold or borrowed against because the person was:

• in temporary hardship, and/or
• it was unreasonable to sell the asset

In these cases, the investment property was coded as an asset that could not be sold or borrowed against for 12 months:

• Initial 6 months in recognition of financial hardship due to unforeseen Government restrictions
• Additional 6 months:
• to allow the care recipient time to become financially stable once the COVID-19 pandemic has passed
• in recognition that it may be slow in re-establishing the income stream generated pre-COVID-19 restrictions