Your cost of aged care is means tested so it defies logic that you would artificially inflate your wealth, but it is happening all around the country. Why? Mostly because people want a higher standard of aged care accommodation.
The problem is: the means test uses a single formula to work out how much you can pay towards your accommodation and care. So, if you opt out of the means-testing arrangements, not only do you pay the market price for your accommodation, but you can be faced with a means-tested care fee of $416 a day on top.Jim and Betty are pensioners, they have a home worth $1 million, $300,000 of investments and $10,000 of personal assets. Jim needs to move into aged care.
It’s a dilemma for many residents and their families. They are happy to pay the extra $68 a day for the accommodation they want, but they don’t want to trigger a means-tested care fee of $33,039 a year. As a result, people are artificially inflating the value of their assets, in numerous instances borrowing money to get the accommodation of their choice.In Jim and Betty’s case, they would need an extra $92,500 in assets for Jim to be able to pay the market price.