Entry to a residential aged care home is traumatic for all concerned, and a decision that is never taken lightly. The process is complicated and can be quite lengthy.
A question which I am often asked during this process is – how can I afford to pay the Refundable Accommodation Deposit (RAD) the aged care facility requires, as I do not have the cash?
Remember, I have discussed the RAD in previous blogs – “It is the deposit that you pay when entering a home and is refunded in full when a person leaves the home”.
The current average RAD is between $350,000 and $400,000 – an amount of money some people just do not have, creating an extremely stressful situation if they do not understand the process.
To help relieve this stress, it is important to remember that not everyone is required to pay the RAD.
The requirement for a person to pay the RAD is based on their asset and income. For example as a rough guide;
- If your assets are below $47,500 and your income is less than $26,000 you would not be required to pay the RAD
- If your assets are between $47,500 and $162,815 and your income is less than $26,000 you would be required to pay a daily accommodation contribution but not the RAD
- If your assets are above $162,815 you would be required to pay the RAD advertised by the home
So now the obvious question – why would a nursing home accept any new resident who is not able to pay the RAD, as in the above first two examples?
All aged care facilities receive subsidies from the Government in relation to the residents of the home. These subsidies are calculated by assessing the resident’s level of required care and can, in some cases, be close to $200 per day.
For most homes, the Government requires each facility to meet what is called the ‘supported resident ratio’. If the home does not meet these ratios, then sanctions could be applied – generally in the form of reduced subsidies
So, who is a supported resident?
A supported resident is a person who is either not able to pay any of the RAD or maybe paying an accommodation contributions, as per the first two examples above. For these persons, the Government actually pays the accommodation costs.
What does the ratio mean?
The home is obliged to fill a required number of beds with people who fit the definition of a supported resident.
The ratio can vary from a state or even a city, depending on the demographics of the region. For example, in Western Sydney, the ratio is 29.8% as opposed to North Sydney where the ratio is only 16%.
As a supported resident, it does not mean that the level of care you receive is any less than that of an unsupported resident but it could mean that you may have to share a room and facilities or be placed on a waiting list for a bed to become available.
It is not ideal, but hopefully, I have been able to provide a better understanding of the situation and relieve some of the stress for those people who do not have the cash and are concerned that they will not be able to find a facility to care for themselves or their relatives.2