Hardship Supplement in Residential Care

Page last updated: 18 September 2017

The hardship supplement is available to aged care residents who are in genuine financial hardship and are unable to pay their costs of aged care due to circumstances beyond their control.

In general, a hardship supplement needs to be applied for by residents including:

  • those in care on 30 June 2014
  • those who entered care on or after 1 July 2014.

Applications for individual financial hardship supplement may be submitted for both residential respite and permanent care.

Pre 1 July 2014 Aged Care recipients

There are five classes of people who were in care on 30 June 2014 for whom an amount of Hardship Supplement is automatically paid:

  • Class A - paid to residents under 21 years of age who receive an income support payment and whose total income is below the amount of the single age pension. The resident’s basic daily fee is reduced by the amount of supplement. The Department of Health will contact these residents about the reduction in fees and to ascertain whether additional financial hardship assistance is required. If these residents do not have an income support payment, they may apply for financial hardship assistance.
  • Class B - paid to residents under 16 years of age who are dependent children and whose total income is below the single rate of the social security pension amount. As with Class A, the resident’s basic daily fee is reduced and the Department of Health will contact the resident’s representative regarding the reduction in basic daily fees and any additional financial hardship assistance that may be available.
  • Class C - paid to pre-March 2008 self-funded retirees who receive an income that is just above the pension income test cut-off and therefore may be asked to pay up to the nonstandard rate of basic daily fees. It is recognised that these residents may be disadvantaged by paying the difference between the standard and non-standard rate of the basic daily fee. The Class C Hardship Supplement ceases if a resident’s income is not within a specific range.
  • Class D - paid to residents who were in receipt of an income support payment that was lost as a result of the aged care arrangements that commenced on 1 October 1997.
  • Class E - paid to residents who were living in a hostel on 30 September 1997, who have not since moved to a nursing home which was approved prior to 1 October 1997.

If an aged care recipient does not fall into one of the above categories, they are able to apply for individual financial hardship supplement. Depending on their situation, they may apply for financial assistance with:

  • basic daily fee; and/or
  • income-tested care fee; and/or
  • accommodation payments.

Post 1 July 2014 Aged Care recipients

Each case is assessed on an individual basis, taking into consideration a range of issues which may be unique to the aged care recipient.

Depending on their situation, they may apply for financial assistance with:

  • basic daily fee; and/or
  • means-tested care fee; and/or
  • accommodation payments; and/or
  • accommodation contributions.

Eligibility for financial hardship assistance

Care recipients will not be eligible for financial hardship assistance if they have:

  • not completed and lodged an Aged care fees income assessment (SA456) form (for home care packages and residential respite care) with the Department of Human Services (DHS) or the Department of Veterans’ Affairs (DVA), or
  • assets (unless they are unrealisable assets) valued at more than $34,881.60 (from 20 September 2017), or
  • gifted:
    • more than $10,000 in the previous 12 months, or 
    • more than $30,000 in the previous 5 years.                  

Unrealisable assets

If care recipients have assets valued at more than $34,881.60 (from 20 September 2017), they may be able to apply for an asset to be declared as ‘unrealisable’ as part of their hardship assessment. An asset is considered unrealisable if the care recipient cannot sell it or borrow against it.

The following assets may be considered unrealisable:

  • a house that has been on the market for 6 months or more
  • jointly owned property
  • gifting where the decision to gift was made when the person was incapacitated or was made by a Power of Attorney
  • frozen assets.

The following assets are not considered unrealisable for financial hardship assistance purposes: 

  • rented properties
  • private trusts and private companies.

More information on unrealisable assets will be available when the care recipient applies for financial hardship assistance through DHS.

Essential expenses

If the care recipient meets the above criteria, DHS will check to see how much income they have access to after they have paid all of their essential expenses. If the care recipient has access to more than 15 per cent of the basic aged pension amount, they may not be eligible for financial hardship assistance. 

Essential expenses include, but are not limited to:

  • resident fees
  • rent or mortgage repayments for the principal home where your partner or a dependent child lives
  • private health insurance
  • ambulance cover
  • medical expenses, including expenses incurred under a health professional’s direction
  • transport costs to go to medical appointments
  • dental care
  • prescription glasses (one pair per year) or contact lenses
  • artificial limbs, eyes or hearing aids for amounts that are not already covered by other government schemes or programs
  • wheelchair and mobility aids
  • regular funeral plan payments.

Essential expenses do not include:

  • extra service fees
  • amounts paid for additional care and services
  • amounts spent by a person, authorised to act on the care recipients behalf, other than for the benefit of the care recipient.

For care recipients in residential respite care, please see the hardship supplement in home care website for more information on the types of essential expenses that could be included.

Applying for financial hardship assistance

To apply for financial hardship assistance the care recipient must complete and lodge the relevant DHS application form.

For aged care homes, complete and lodge the Financial hardship assistance for residential aged care (SA461) application form with the Department of Human Services.

Assessment process

Once DHS receives the care recipient’s application form it will be assessed within 28 days and they will give the care recipient the decision in writing.

If DHS needs more information to assess the application, then the assessment will be completed within 28 days from receiving the extra information.

To receive a well-timed assessment, it is important to provide the correct documents and remember to sign the form.

Contact

Enquires can be made to the DHS customer line on 1800 227 475.

More information