Pension eligibility changes likely to impact aged care providers

Providers have been urged to consider the impact of changes to the asset and income test to determine eligibility to receive a pension on both existing and future residents.

Hynes Legal has published an update reminding providers that from 1 January, if the value of a person’s assets exceeds the relevant threshold amount, their entitlement to receive a pension is reduced until they are not entitled to receive any pension at all.

The changes include:

  • the thresholds (asset test free areas) for the asset test are being increased; and
  • the reduction of a person’s entitlement to the pension will be more significant once a threshold is reached.




Non-home owners

1 July 2016

1 January 2017

1 July 2016

1 January 2017











For every $1,000 of assets over the threshold amount, their pension will be reduced by $3.00 per fortnight – up from $1.50 per fortnight under the current rules.

Hynes warns the changes may significantly impact on some residents’ availability of funds to cover their care and living costs, and on other people’s decision to move into a retirement village or aged care facility.

While a person’s home and RAD will remain exempt from the asset test, most other assets will be assessed.

The law firm said it can assist providers to consider any alternative pricing methods or financial models that can be implemented to lawfully limit the effect of the changes on current and future residents.


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