Trustees cautioned on looming reforms

Means testing for aged care accommodation will be based on the income and assets of the recipient as opposed to income alone from 1 July 2014, Taxpayers Australia said in a statement.

“These new reforms will basically affect anybody who is looking for residential care after 1 July 2014, [but] it won’t impact anyone currently in aged [care],” Taxpayers Australia’s head of taxation, Mark Chapman, told SMSF Adviser.

“The current income-tested care fee – which is based on assessable income – will be replaced by a means-tested care fee that will be based on both assessable income and assets, and this may include your home.”

“[With] people’s assets being brought into consideration when calculating the cost of accommodation and care fees, super funds may be [affected] if they have a house as part of their trust,” he added.

Mr Chapman has advised people to consider bringing forward their entry into aged care, which would involve admittance prior to July 1 and having all financial arrangements in place before that date.

“While there are a number of factors that will influence this major decision, it is vital to know that keeping or selling your home will affect your ongoing care fees if you enter a care facility after July 1 this year,” he said.

For more on the aged care reforms, click here.