When a member of a couple enters residential respite care for 14 days or more, it is important to advise Centrelink or the Department of Veterans Affairs as they may be entitled to a higher rate of Age or Service Pension.

 

What is residential respite care?

 

Residential respite care is available in aged care facilities for people who need care temporarily, but who intend to return to their own home. Respite care may be used on a planned or emergency basis to help with carer stress, illness, holidays or non-availability of the carer for any other reason.

 

To be eligible to enter approved respite care, the client requires an Aged Care Assessment Team (ACAT) assessment.  Subsidised respite care is available for a maximum period of 63 days in a financial year.  An additional 21-day extension period may also be available.

 

What fees are payable?

 

Residents in respite care are required to pay the basic daily care fee which is currently $61.96 per day.

 

In some cases a booking fee may also apply.  A booking fee is a prepayment of residential respite care fees and not an extra payment. The booking fee cannot be more than either a full week’s basic daily fee, or 25% of the fee for the entire stay, depending on which amount is the lowest.

 

Where residents receive respite care on an extra service basis, they may also be charged an extra service fee.  In standard aged care facilities, an additional services fee may be charged where the resident agrees and they have a low-level respite care approval.[1]

 

How does entering respite care impact pension entitlements?

 

When a member of a couple enters respite care for at least 14 consecutive days and notifies Centrelink or the Department of Veterans Affairs, they are assessed in the same way an ‘illness separated couple’ when determining their rate of pension payable from Centrelink or the Department of Veterans Affairs[2].

 

An illness separated couple is eligible for a higher rate of pension as both members of the couple receive the single rate of payment each.   The maximum rate of pension for each member of an illness separated couple is currently $1,116.30 per fortnight ($29,023.80pa each).   This is higher than the maximum rate for a member of a couple that is not an illness separated couple which is currently $841.40 per fortnight ($21,876.40 pa each).

 

Example

 

George and Mildred are a couple receiving the maximum rate of Age Pension.

 

George is assessed by ACAT as eligible to receive residential respite care.  George advises Centrelink that he has entered respite care for 28 days.

 

As he intends to receive respite care for more than 14 days, Centrelink calculate their Age Pension under the illness separated couple rate for the period George receives respite care.

 

If George had not notified Centrelink of the period of respite care, the couple would have received Age Pension of $3,365.60 combined for the 28 day period.

 

However as George did notify Centrelink, the couple’s age pension is increased to the illness separated couple rate of $4,465.20 for the 28 day period.  This is an increase of $1,099.60.

 

Can they receive rent assistance?

 

Rent assistance is not payable in respect of respite care fees.

 

However rent assistance may continue to be payable to the client in respite care and the partner remaining at home at the illness separated couple rate if they were receiving rent assistance prior to admission to aged care.

 

 

[1] Dept of Health and Aged Care, Fees for residential respite care

[2] Social Security Guide, 2.2.5.70  Determining a respite care couple and 5.1.8.30 Common provisions affecting calculation of a rate

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Disclaimer

The information contained in this update is based on the understanding Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) and Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) has of the relevant Australian laws as at the article date. As these laws are subject to change you should refer to our website at www.cfs.com.au or talk to a professional adviser for the most up-to-date information. The information is for adviser use only and is not a substitute for investors seeking advice. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person, including AIL, nor CFSIL, accepts responsibility for any loss suffered by any person arising from reliance on this information. This update is not financial product advice and does not take into account any individual’s objectives, financial situation or needs. Any examples are for illustrative purposes only and actual risks and benefits will vary depending on each investor’s individual circumstances. You should form your own opinion and take your own legal, taxation and financial advice on the application of the information to your business and your clients.

 

Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

 

AIL and CFSIL are also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.