ACT News

Centrelink ordered to increase residential care subsidy for elderly Canberra woman

An elderly Canberra woman has won reduced aged care fees after a tribunal ruled her assets had been incorrectly calculated by Centrelink.

Administrative Appeals Tribunal senior member Dr James Popple ordered Centrelink to reassess the woman's financials taking into account an outstanding loan.

The decision means the woman will receive a higher subsidy and have to pay lower fees.
The decision means the woman will receive a higher subsidy and have to pay lower fees. Photo: Louie Douvis

In March, the woman was admitted to an aged care service provider after paying a $300,000 refundable accommodation deposit.

She and her husband borrowed $120,000 – to be repaid with interest by 2025 – from their children in order to cover the cost.

In April, Centrelink determined the means-tested Commonwealth residential care subsidy she would receive to help pay fees to the provider.

But Centrelink did not take into account the loan in calculating the amount, which meant she received a reduced subsidy and had to pay higher residential care fees.

Centrelink rejected an internal review, in which the woman argued the value of the deposit should be reduced by the loan amount in calculating her subsidy.

The woman appealed to the tribunal which found in her late last year.

The decision means the woman will receive a higher subsidy and have to pay lower fees.

 Dr Popple ordered Centrelink's decision be set aside and the matter remitted for reconsideration in accordance of a direction that "In calculating the value of the applicant's assets … the value of the refundable deposit balance in respect of the refundable deposit paid by the applicant to her residential care service provider is to be reduced by the value of the loans obtained to fund the payment of that deposit".

Dr Popple found her assets should be valued together with any charges or "encumbrances" attached to those assets.

"The value of the deposit should be reduced by the value of the loan for the purposes of calculating [her] residential care fees," Dr Popple wrote.

"There is no evidence before me about whether there are any amounts permitted to be deducted from the deposit: that is, whether the refundable deposit balance is the entire deposit.

"Accordingly, I remit for reconsideration the question of the precise amount of residential care subsidy payable to [her] service provider for providing her with residential care."