Understanding Aged Care
Matthew McCabe, Financial Planner and Retirement Specialist at Judge Financial Planning
The emotional and financial upheaval of moving a family member into residential aged care is a daunting experience. If the complexities involved seem overwhelming, then perhaps our professional advice can help.
There is a maze of legislation, entitlements and Centrelink assessments to contend with, as you may already have discovered.
Fortunately, help is at hand to aid you and your loved one to cope with all this. We have identified 5 areas that most people in this situation will need to have answered to alleviate worry and avoid spending more than is necessary to achieve the best care. These include:
- ACAT assessment – An Aged Care Assessment will provide access to aged care support.
- Research – Determine your preferred option, whether it be, in home care or support in an Aged Care facility. The next step is to research the facilities and home care providers to determine the most suitable.
- Financials – The different fees, RAD, DAP, Basic Daily Care Fee, Means Tested Fees, and extra services fees just to name a few. One of the main issues for Aged Care, are the acronyms for all the fees and the various fees and how the fees will be paid. Establishing a plan so you maximise your entitlements and minimise fees/taxation can be complicated.
- Ongoing financials – Once in aged care, there are ongoing obligations that need to be considered, whilst also keeping abreast of government changes to Centrelink and potential taxation consequences.
- Moving from home – When moving into an Aged Care residence, one of the main choices one is required to make, is whether to sell or keep your existing house. While there are a number of factors that will impact your decision, it is important to know that keeping or selling your house can affect your ongoing care fees when you enter an Aged Care facility.
There are other strategies that may support you in providing the optimal outcome from an Aged Care fee and Age Pension prospective, whilst overlaying the potential taxation consequences of your decision.
Paying for accommodation
Generally you have 28 days after entering an Aged Care residence to determine whether to pay for your accommodation as a refundable accommodation deposit or a daily accommodation payment. Your choice can have an effect on your financial assets, which can then influence how much you pay for your ongoing care fees.
Investing money
Your financial assets are assessed when calculating your ongoing care fees, so a clever investment strategy can possibly reduce the amount you pay and/or even support you in meeting the ongoing costs of care.
Why this advice is important for you?
A move into Aged Care usually happens in a hurry and with emotional turmoil, planning ahead can help to improve the situation and avoid family conflict.
The costs for Aged Care are increasing and with an ageing population we all need to think more carefully about how to ensure our loved ones can access the help and support they need.
The decisions you make can have a significant impact on your loved one’s lifestyle and comfort, their entitlement to the age pension, taxation liabilities and the ongoing Aged Care costs.
My speciality is in helping you find the right answers to these questions to ease the financial burden and make the transition as smooth as possible. We sit with you on your side of the table and support you in making these important decisions, please contact us to arrange a suitable time 02 4709 6741 or mmccabe@judgeaccountants.com.au
Alternatively, you can book an appointment directly with your local Newcastle financial planner or Penrith financial planner.