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Planning can help smooth Aged Care transitions

Preparing the way for you or a loved one to enter residential Aged Care can be a difficult and stressful time. Dealing with complex financial issues at a time when your main concern is the health and welfare of loved ones can be challenging, not to mention time consuming and very confusing.

Making the decision regarding the right care and then completing the necessary meetings, paperwork and requirements whilst dealing with the emotional commotion of changing your loved ones existing lifestyle can take its toll on the entire family…but you don’t have to face it alone.

Financials can get complicated when a move into care impacts Centrelink pension payments (this assumes the person entering care is receiving Centrelink benefits). You may have to consider other issues such as how to pay for any accommodation payment and whether to sell the family home or rent it out. All this is at a time when your main concern is finding a suitable place for your loved one to receive the care they need.

What is Aged Care?

Australia has one of the leading Aged Care systems in the world. Everyone receives equal, high quality care – in our homes and/or in aged care homes (nursing homes).
But with the ageing population the cost is ballooning. This means we have to start paying for Aged Care.

There are 3 primary options to choose from when considering Aged Care living in Australia.

  1. retirement villages (social villages)
  2. home care – allows you to remain independent in your private living space and
  3. aged care homes (nursing homes)

What costs are involved in entering Aged Care?

When unravelling the costs, the first thing to understand is that there are four categories of fees, and each pays for a different component of living expenses. This is not dissimilar to the costs you incur while living in the community.

Accommodation payment Or Refundable Accommodation Payment (RAD)

Pays for a right to occupy a room and use the amenities. The aged care home can charge a fee for the accommodation they provide. This can be paid via a RAD or a Daily Accommodation Payment (DAP) or a combination between the two.

Basic daily fee

The basic daily fee covers day to day living costs such as meals, laundry, cleaning and utilities like power and basic telecommunications. The basic daily fee is set by the Department of Human Services at 85% of the single Age Pension.

Means-tested care fee

You might need to pay extra towards your day to day personal care and nursing costs, but this only applies to people who can afford it – and the amount varies according to an assessment of your income and assets. If you chose not to have an assessment you won’t receive any government subsidy towards the costs of your Aged Care and you will be asked to pay the full amount yourself.

Additional services fee

Pays for additional services that add to quality of lifestyle such as newspapers, Netflix or Foxtel and other added conveniences or higher quality of lifestyle. The price is set by the provider.

Getting advice from an Accredited Aged Care Professional can allow you to smoothly navigate this process, receiving the professional support you need to create effective financial solutions that provide peace-of-mind and a favourable lifestyle for you and your family.

Myself and the Navigate team will work with you, your family, solicitors, accountants, and Aged Care Providers to achieve the following outcomes for you:

Equip you with the appropriate information to help you negotiate with Aged Care facilities, in order to secure a desired placement and acceptable fee structure.

Decide on the optimum strategy for the family home in order to optimise accommodation costs and pension entitlements.
Calculate if an accommodation payment or contribution is payable and how you can efficiently structure your assets to fund this.
Evaluate options for paying a refundable accommodation deposit or daily accommodation payments while ensuring that Centrelink benefits are not negatively impacted.
Determine how ongoing accommodation fees can be minimised and pension entitlements can be maximised, through the structuring of investment assets and implementation of financial planning strategies.
Maximise access to additional benefits, such as the Commonwealth Seniors Health Card.
Utilise the financial planning strategy to structure assets in order to maximise tax efficiency.
Ensure the financial planning strategy enables an efficient estate transfer to beneficiaries in line with your wishes.
Perform a regular strategy review to maintain your strategy’s effectiveness.
Navigate will ensure your Aged Care strategy is completed in a timely and stress-free manner so that you can focus on what matters most. Once you or your family member are settled into aged care accommodation, you can relax knowing that you or your loved one have quality of life in appropriate care, you have achieved this with the greatest financial efficiency and that the financial situation is effectively structured for the future.

Dennis Spiroski is an Accredited Aged Care Professional and enthusiastic and caring Financial Planner passionate about providing superior customer service to his clients.

Feel free to contact Dennis or one of the team at Navigate Financial Group who are here to support your financial decision making, leading you confidently into your financial future.

Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.