When a member of a couple enters residential aged care, the general rule is that the means tested amount is calculated using half of the combined income of the couple.
However, when including income support payments (eg. Age Pension) in the means tested amount assessment, the general rule does not apply. In this case, only income support payments paid to the aged care resident are included in the calculation (and not halved). Any income support payments received by a spouse are excluded.
In most cases, this exception to the general rule does not matter as both members of a couple receive the same amount of income support payments. Only including the aged care residents’ income support payment results in the same amount as including both members of the couple and halving.
However, where both members of the couple do not receive the same amount of income support payments, for example if one member of the couple receives a non-means tested blind pension, it can impact the means tested amount assessment.
Bill entered a residential aged care facility in October 2017. He receives a non-means tested blind pension of $23,254.40pa. His wife Brenda receives a means tested Age Pension of $15,000pa. The couple also have combined assessable income of $10,000pa.
When determining the amount of assessable income included in the means tested amount calculation for Bill, we include the income support payment paid to Bill of $23,254.40pa (less minimum pension and energy supplement of $1,294.80pa) plus half the combined income of $5,000pa. Bill’s total assessable income is $26,959.60pa.
This results in a higher amount of assessable income than if we calculated the combined income of the couple and halved the result.
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Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.