Australia has a robust aged care system designed to support the elderly with quality care when they need it the most. However, engaging professionals for care, either at home or by moving to an aged care facility, is often a difficult and emotional decision that may cause stress for the whole family. With a variety of options available, it can be overwhelming to uncover what’s best for you during this emotional phase. Needless to say, knowing the lay of the land is crucial to ensuring you make an informed decision.
At Morrows, we provide numerous clients with financial advice on aged care, wealth creation and estate planning. We know very well the challenges that are faced by elderly people in applying for in-home or residential aged care and the financial impact it can have on them. Here we talk about the steps most people go through before engaging a professional:
Moving into an aged care home or even applying for in-home care requires a lot of planning. This is a big decision to make and it will impact your daily lifestyle, state of mind and general wellbeing so it needs to be made thoughtfully and in consultation with your family. Morrows uses a structured approach to facilitating meetings between family members and ensures everyone is advised on all options available. Through our mediation, clients receive an impartial and objective view of the journey ahead as we draw on many years of experience in working with the various issues that arise in the process.
Due to changes in aged care regulations in 2017, anyone applying for care needs to be assessed by a member of ACAT (Aged Care Assessment Team), who will evaluate your needs and lifestyle, provide information on aged care homes in your area and go through the option of in-home care with you. This assessment is free of cost and determines your eligibility for government subsidised aged care services. To find your local ACAT or for more information about ACAT assessments, call 1800 200 422* or visit www.myagedcare.gov.au.
Searching for services
There are many factors to consider when searching for services to ensure residential care is as seamless and comfortable as possible. We encourage clients to write down a list of things that are important to them and share this with their family. Have a family member help you search for aged care services and, contact them or visit them to understand if they accommodate your needs. Enquire about their accommodation fees or visit www.myagedcare.gov.au for more information on fees you can expect to pay.
Understanding the costs
Residential aged care often involves the following types of fees:
- Basic daily fee: this is calculated at the rate of 85% of the basic single age pension
- Means-tested fee: this is payable if you have income and assets over specified thresholds and has an annual and a lifetime cap
- Additional fees: Most aged care homes offer additional services such as remedial massage and physiotherapy. These additional services usually come at an extra cost, which varies based on the aged care provider.
Every time your circumstances change, it is important to consider the impact it has on your estate plan. Moving into aged care is a life-changing decision and so, you need to consider updating the following elements of your estate plan:
- Your will: Moving into aged care may involve selling your house or putting it up for rent. Any changes in the ownership of estate assets will need to be updated in your will.
- Investments: Review your investments before moving into aged care and update any “death benefit” nominations
- Powers of attorney: Ensure you have the appropriate powers in place so that someone you trust can make decisions on your behalf, in the event of an illness or injury.
Covering the costs
Before making the move, it’s important to conduct a complete review of your financial situation to create sufficient cash flow and maximise your estate. Some common decisions that need to be made include:
- Should the family home be kept, sold or rented?
- Is it best to pay a RAD or DAP for aged care accommodation?
- How is your Centrelink/Veterans Affairs pension affected and can this be improved?
- What are the best investment options for any surplus money?
At Morrows, our advisors often conduct a full financial review for clients and develop an appropriate strategy to help them make these decisions cost-effectively.
This is the big one! When you accept a place at an aged care home that you like or use a service to accommodate in-home aged care, you will be asked to sign a Resident Agreement. This will detail the services provided and fees payable. It will also outline your rights and obligations which are important to consider should any part of your circumstances change.
We understand that these steps are just the beginning of entering a new chapter in your life and as you keep going, you may find that there are more financial decisions to make.