At Plan4Wealth, we are unfortunately very familiar with the trials and tribulations of navigating the Aged Care system. Most clients approach us from a financial aspect: they want to make the right choices, maximise age pension entitlements while minimizing aged care fees and taxation, and of course investing wisely any surplus funds. Undoing decisions in this area can be costly and emotionally draining for all concerned.
But its so much more than that. The emotional aspects of moving a loved one into care are paramount as you go through this process.
Needless to say, we have done our homework in both the financial and the emotional angles.
I had to assist my mum to apply for and transition into the nursing home of her choice a few years ago, when she thought she was getting dementia and didn’t want to be a burden on me any longer! And I’ve had to watch with sadness her health and mobility decline significantly following her move. My dad on the other hand remains stubbornly independent, which creates a whole other set of worries that I have to live with.
Cathy is currently going through the process of securing services in the home for both of her parents, and simultaneously trying to convince her aunty that ‘it’s time’ to stop living independently.
So when you approach us to guide you through this, we’re talking from experience not just from text books
What can you do?
We don’t know your loved one like you do, and we won’t be able to help you select which services or which home would suit them best. But we can help you with a step-by-step process to follow, which pretty much goes like this:
- Make sure your estate planning is up-to-date – always! This includes getting wills and powers of attorney in place while everyone still has the capacity to make such decisions and to execute the necessary documents. This one escapes over 50% of all Australians—don’t be one of those statistics, please.
- Claim all concessions and offers. Once you are eligible for the age pension, keep an eye on ALL the concessions and home care options that you are entitled to. Many of these are provided by your local council or other local businesses, so ask around and stay up-to-date with whatever offers are available. These providers are also a great source of further information in this field.
- Do your research beforehand. When your loved one’s health deteriorates to the point that they need specialist full time care, being prepared beforehand is a great stress remover. Health can deteriorate rapidly after an accident or illness, no matter how young, so you don’t often get much advance notice. So make the research phase a lot of fun – visit homes or retirement villages when they’re having ‘open days’ (especially if they put on free sausage sizzles or the like!) Ask around and listen well when friends tell you about a good (or bad) service or Aged Care home or retirement village that they’ve come across. There’s nothing like word of mouth to find the real deals around town, and to get an idea of which one might suit your loved one’s personality or background.
- Keep centrelink records up to date. When your loved one needs to enter the Aged Care system, this will provide a great starting point for the governments financial assessment. To this, they will add the value of the home if no family member or carer is going to remain living there afterwards. For a member of a couple, centrelink will start with applying a ‘couple separated by illness’ calculation, which essentially halves all of the assets and pays the equivalent single person rate of payment. However if your loved one is not likely to ever return home, a better option may be to be treated as two single aged care recipients. Getting this calculation right upfront can benefit you financially.
- Seek financial advice. Investing surplus funds in exempted assets can help with optimising ongoing Age Pension entitlements. We may advise you to keep the home and rent it out, or to pay for the full cost of the room in a nursing home, or just to invest in an annuity or bond. Timely advice in this area is necessary.
- Review the ownership of various assets. This helps with minimising ongoing Aged Care fees, AND assists with streamlining future estate planning, so that adult children in particular can minimise tax on the receipt of any inheritance.
- Update your estate planning – again! We don’t have any inheritance tax per se here in Australia, but we do have income tax, capital gains tax and superannuation death benefits taxes that can be minimised if an estate is well structured. Definitely seek advice in this area and update it whenever there are significant changes in your life.
How we can Help
If you want to find out more about how we might be able to help your particular Aged Care situation, book a preliminary chat now!
Forewarned is forearmed as they say. Wishing you all the best on your research journey.
About the Author
I'm passionate about helping real people have enough money to live a life they love!
40 years of experience working in financial services, starting as a chartered accountant with Grant Thornton in England before emigrating to Australia in 1988 with Price Waterhouse.