NSW Nursing Home from Financial Perspective (Questions)

[David Chang]

Good morning,

Just few questions that I hope all the professionals here can help; it's in relation to my dad's, which just got his ACAT assessment done last Thursday and the plan is to have him moved from the hospital (he is currently admitted) to the 63 days respite care.

My dad is a new migrant (fresh from November last year), an Australian Permanent Resident with no access to Pension fund from neither country (Australia and his birth country), zero asset except our family home back overseas and mom's term deposit.

As he is very prone and need high intensive care, the plan is to have him from respite to permanent nursing home (post 63 days) hence we believe we need to do Income and Assets Assessment to DHS (Centrelink).

The questions that I have are:

1. As different nursing home have different max RAD & different max DAP, what will the outcome of the assessment be, considering when we submitted the test, there's no place in the form to mention about which nursing home we're going to, is he going to own or shared room etc? One nursing home can have RAD of $350,000 whilst other nursing home can have RAD of $180,000 which is a significant difference and plays part in our financial circumstances.
   
2. Potentially (with mom's term deposits) we maybe required to contribute towards RAD; once dad leaves the nursing home, can we have the RAD refunded to mom? Is it 100% refundable plus any interest earned? I believe provider also requires to pay interest on this RAD?
3. Just for my understanding, when RAD deposited in full, this means we no longer required to pay for DAP?
4. Based on my prescribed situation above, would you suggest submitting the Income and Assets Assessment prior to submitting Financial Hardship?
5. After 63 days of respite care, say that we decided to take dad back to home for another trial; and say the trial was an unsuccessful one, what would the process be for us to place him back to the nursing home? I presume we need to start ACAT assessment all over again and perhaps?

Thank you for reading and hope someone will be able to shed some light on this.

 

[Rob Legat - SBPL]

These are much more procedural type questions than strictly legal questions. I'll assist to what extent I can, mainly because I've been through a version of the process:

1. The ACAT assessment is independent of the RAD/DAP. The ACAT assessment is designed to determine what level of care you need; whereas the RAD/DAP is based on the cost of the facility the person is going into. The only connection between the two (and not a direct one) is that some facilities may not be able to provide the level of care necessary for the particular ACAT assessment. A higher level of need, such as for your dad, is likely to require a higher care level facility - which may require a higher RAD/DAP as it will have more medical infrastructure.

2. The RAD is refunded to the care recipient (or their estate if deceased, following production of probate). There are deductions that can be made from the RAD for fees and charges - some by agreement, others to cover unpaid fees. Interest is payable on the RAD at a legislated rate (currently a Base Interest Rate of 3.00% - if not paid within time the current Maximum Permissible Interest Rate is 5.54%).

3. Yes. Be aware that the DAP is payable until the RAD is paid, even if you have to chase them for details of how to pay it.

4. Submit everything at the same time for financial assessment. This calculation is for what assistance you may receive towards the accommodation costs, which are standardised. Hardship won't directly factor into it. The calculation is to see whether you have to pay a premium as a means tested fee.

5. You only need to do one ACAT that I'm aware of (unless your dad's medical situation worsens, for example). However, if he is at respite level then I don't think it really gets much higher in practical terms. I think most care facilities that can handle that level can handle all levels. You just find a facility you like that will take him, communicate the ACAT assessment, and work from there.

 

[David Chang]

A higher level of need, such as for your dad, is likely to require a higher care level facility - which may require a higher RAD/DAP as it will have more medical infrastructure.

I am still slightly confused by this; if I take an example of 2 nursing homes, where both caters my dad's needs:

1. Nursing Home A, RAD $300,000 (Single Room with ensuite)
2. Nursing Home B, RAD $180,000 (Shared Room - 4 occupants)

I took an extreme difference between Nursing Home A and Nursing Home B as this will help me to understand.

So based on SA457 form, we submitted all of their (mom and dad)'s assets; in this form, we don't specify which nursing home; so will the outcome of this SA457 be a percentage (%) of Max RAD that we need to contribute?
Say the percentage (%) is 50%.
So when we go to Nursing Home A, RAD is $150,000 that we need to contribute.
When we go to Nursing Home B, RAD is $90,000 that we need to contribute.
is this how this thing works?

The RAD is refunded to the care recipient (or their estate if deceased, following production of probate).

Because this will be mom's money and his safety money for future, from your opinion, is there any need for a will ? It's good to hear that part "RAD is refunded to the care recipient" because this will be mom's ... whilst not so good if it goes to his estate, which means that we will need a will for that? Apology I'm not too good at this and I may ask silly questions.

There are deductions that can be made from the RAD for fees and charges - some by agreement, others to cover unpaid fees. Interest is payable on the RAD at a legislated rate (currently a Base Interest Rate of 3.00% - if not paid within time the current Maximum Permissible Interest Rate is 5.54%).

so in simplest layman's term, if we put down RAD of $100,000 and in 5 years time if dad leaves the nursing home, do we get?

• 100% of the RAD , which is $100,000.
• Less than $100,000.
• or More than $100,000.

Thanks Rob, much appreciated.

 

[Rob Legat - SBPL]

1. RAD and DAP can be somewhat confusing. The care facility sets the RAD (and don't need approval as long as it is under $550,000). The DAP is calculated against the RAD using a formula.

To calculate the contribution against the RAD (these figures change over time and may not be completely up to date):
- If the means test results in net assets of less than $46,500: no contribution to RAD/DAP is required;
- If the result is between $46,500 and $159,631.20: an accommodation contribution is needed, but all residents must be left with a minimum of $46,500 in assets; and
- If more than $159,631.20: the government will not contribute towards the RAD/DAP.

How the 'accommodation contribution' is worked out in detail is beyond me.

2. The RAD will be refunded to your father, not your mother (he is the 'care recipient'). Having a will makes the process easier. Either probate (if there is a will) or 'letters of administration' (if there is no will) will be required before any RAD will be refunded - and it will be 'refunded' to the estate. Probate is easier to arrange.

3. Hard to say. You'll get, for a RAD of $100,000:

Refund = RAD paid + interest earned - fees owing.

If you've paid all the fees, you'll get more than the $100,000.

 

[David Chang]

Having a will makes the process easier.

Sorry Rob, I promise this will be my last question .. apology ... how much do lawyers normally charge for a will ? he doesn't speak English, so i may need to add the cost for translator too.

and is the process complicated, particularly in my case, because potentially when we need to make the will, he will either be at the hospital or respite care? My understanding is the lawyers need to sight him signing the document and perhaps talk to him etc?

 

[Rob Legat - SBPL]

Wills are an individual thing, and it's very hard to predict the cost - especially if the solicitor needs to make a 'house call' to get it done.

The solicitor should physically meet with your father to take the instructions. Part of that process is making sure he has 'testamentary capacity', making sure he has the mental competence to make a will and is not under any duress or undue influence. Being able to converse with him is an important part of that. While this can be done with a translator, having a native level speaker of your father's language is better. Otherwise you'll need the translator at least twice (once for instructions, and once for execution).

If using a translator, you may find the solicitor wants to source the translator themselves to ensure their impartiality.

I'd suggest finding whether there are solicitors in your area who can speak to your father directly, and who can do a will, and going from there. Contacting the NSW Law Society (assuming your dad is in NSW) to find a list of language proficient members is a good first step.

 

[David Chang]

thank you @Rob Legat - SBPL