Australians are living longer than ever; aged care has become a major consideration for families. A sometimes complex and daunting process, many of us leave our decisions about aged care until something happens that necessitates the transition to a facility.
Taking the time to develop a plan for aged care can prevent you from having to scramble and reduce the stresses and costs you may face.
The first step is to arrange a free health assessment with an Aged Care Assessment Team (ACAT) to review your eligibility and requirements for aged care.
When to seek financial advice
You should seek advice after ACAT has recommended care and after you’ve spoken to your aged care facility. Financial advice helps you to understand your options before making decisions about how to handle your assets, for example, selling your home.
Here are a few things to focus on.
Aged care options
Staying at home means a person can be surrounded by familiar surroundings. Generally, in-home care includes access to external assistance to provide some relief for the family caregiver.
Residential aged care
Moving into a facility that can provide more substantial care is a significant decision. The services can vary based on the needs of the individual, so initial and ongoing costs can differ. Taking the time to visit several facilities can provide you with clarity around what you require as well as give you an idea of costs.
Selecting your room and paying for aged care
Once you have selected your facility, you’ll see a few different room options available. Generally, you can:
- Purchase the room using a Refundable Accommodation Deposit (RAD)
- Rent the room using a Daily Accommodation Payment (DAP)
Some facilities allow a combination of RAD and DAP to lower your ongoing costs by presenting a larger up-front deposit.
Payment generally needs to be made within 28 days of a decision being made.
Ongoing costs of aged care
Beyond the expense of the room, there are ongoing operational and support costs; they will vary between organisations. Here’s an example of what you can expect:
- Basic daily fee: $49.42 per day (as at 1 December 2017) – everyone pays this amount
- Means-tested fee: depends on your assets and income
- Extra service fees: for things like haircuts and newspapers. This should be agreed upon with your facility at the start of care.
What to consider when selecting your aged care facility
How will you pay for the facility?
Paying more up-front can provide a reduced cost over a longer term however you will need to have access to liquid capital to pay for the room. Will that money be coming from savings or a pension? Will you need to sell some assets, like a home? Or will the costs be paid by a family member? Our financial advice team can help you get into the facility you want – even if you don’t have full deposit.
How will you pay for ongoing costs?
Will your regular pension payments be enough to cover these regular costs, and for how long?
What should you do with the family home?
If you own your home, you may have several options available including renting it for extra income; selling it for a lump sum or retaining it for future needs.
What Centrelink entitlements are you eligible for?
There are several support schemes available to help reduce your financial burden. We can help you optimise your benefits.
How will aged care impact your tax burden?
Some aged care payments and medical expenses are tax deductible.
What kind of lifestyle do you want – and can you afford – in aged care?
Your disposable income can have a big impact on your quality of life. Planning and budgeting can help your dollar stretch further.
We can help you make a plan for aged care
An Aged Care Assessment Team can support you through every step of the process of transitioning to aged care, providing timely advice to help you understand your options at a time when things are moving quickly. We can:
- Review your financial situation to ensure you find a solution that’s right for you
- Lay out payment options to develop a budget for ongoing expenses
- Make recommendations on what to do with your assets and liabilities, taking into account your short-term needs and long-term implications
- Find ways to invest your assets to prolong the life of your retirement savings
- Help you set up your estate planning and sort out your legal affairs such as wills, powers of attorney and beneficiaries
We want to help you make the most of your aged care experience. Let us put together a plan that can take the stress out of the experience.
We have a dedicated Aged Care Assessment team that can provide financial guidance and help you plan for your future.