Calls for some time to cut the deeming rates have been answered as part of the stimulus measures and the rates will be cut by 0.75% from May 1,2020.
The benefit for some will mean higher pension entitlements and lower aged care means-tested fees. Do note tho, that pensions will not change if the maximum pension is already received or entitlements are calculated under the assets test.
EXAMPLE: When Edna moved into residential care, she chose to sell her home to pay her $400,000 accommodation cost, leaving her with $350,000 in the bank. She receives an age pension of $849.31 a fortnight and pays $1,133.96 a fortnight in residential care fees.
When deeming rates change on May 1, her pension will increase to $899.77 a fortnight and fees will decrease to $1108.65 a fortnight. This improves her income by $75.77 a fortnight, which helps with extra income to meet her expenses.
Aged Care residents who receive a means-tested pension (Centrelink/Veterans’ Affairs) or hold either a Commonwealth Seniors Health Card or Veterans Gold Card will receive two $750 cash payments as a boost to income. Awesome!
As a bonus, this money is tax-free and not assessable. The first payment will be paid into bank accounts over the next two weeks. The second payment will be paid in late July so keep your eyes peeled for these.