What is this tax and how it is levied? When you are in need of Aged Care Services, you are not permitted to deal directly with an Aged Care Facility without paying the Aged Care Means Tested Tax.
Most of us work hard all our lives and we often prefer to pay for our own way in life which includes funding our own aged care needs, well sorry you can’t do that without paying this tax.
How is this tax collected?; well the operator is charged this tax by a deduction from the subsidies received for other government funded resident’s, so if they don’t recover this money from you, then they are out of pocket.
The government support this conspiracy by informing you that you have to pay this tax to the aged care facility.
Your tax money paid is directly supporting people who have by choice failed to put money aside for their retirement. These people look to the government to fully fund their failure to provide for themselves.
The government in effect make the aged care operator collect this tax and disguise it as a fee levied by that operator.
How much is the tax?
Annual cap per annum $26,964.71
Lifetime cap $64,715.36
The calculation of this tax is based on your assessed income and assets at the time you enter the Aged Care facility and includes your family home unless your spouse or carer continues to reside in the home.
The full cost of your Aged Care Bond is also included in the calculation without any allowance for the fact that it is not available to you to use without the imposition of a Daily Accommodation charge based on the portion of the bond withdrawn times 5.77% interest.
Who pays the maximum tax?
If you own your family home in Sydney,
you are then forced to sell your home to fund your Refundable Accommodation Deposit (RAD),
and you are in the category of a high care resident,
then you will be charged the full amount over a 2.4 year time frame.
Let say your home is valued at say $1,500,000 and your bond is $850,000. This means the total value of $1,500,000 is used to calculate your Aged Care Means Tested Tax.
As a high care resident the government believes your life expectancy is short so they levy the tax to be paid over 2.4 years which is the highest rate.
Why is this tax wrong?
It is an attack on working Australian’s that have paid off their family home and have a modest sum of money to support them in their twilight years and the government slugs them $64,715.36, just because they need some assistance with Aged Care.
They still have to pay 100% of their care without any assistance from the government and pay this tax as well.
Aged Care Advice
This is a complex area and we will provide a one hour free consultation to assess if we can assist you in this complex area.
Please call (02) 9875 2444 now and secure your appointment.