Early planning can take away a lot of the stress and uncertainty that can arise when considering aged care at home or a residential aged care facility.
Know what your options are
The first option that probably comes to mind is a residential aged care facility. These facilities provide accommodation and care depending on your personal needs. Care can range from personal care, such as help with showering and dressing, together with occasional nursing care to continuous nursing care for those with a greater degree of frailty.
What you may not realise, however, is that there are also Home Care Packages that provide access to services that can help you to stay at home for as long as possible. Support services may include cleaning, meal preparation and transport for shopping or appointments.
Start planning early
There are a number of reasons why you should plan ahead and well before the need for aged care is imminent. For example:
- in many cases, the need to move into residential care can be sudden due to a serious illness or injury (eg a stroke, heart attack, or fall), or another unexpected event
- it’s not uncommon to find there are significant waitlists for residential care, particularly at the more popular facilities, and
- regardless of whether home or residential aged care is required, if you wait until the last minute to speak to a financial adviser, you may not be able to minimise the fees you may have to pay and/or maximise the social security benefits you may receive.
Find a suitable facility
Whether you currently need residential aged care or not, ideally you should plan to visit a range of facilities in your chosen area as soon as possible and, you may prefer to do this with family members. Becoming familiar with the alternatives can enable you and your family to have meaningful conversations regarding your options and make more informed lifestyle and financial decisions.
The My Aged Care website has a ‘Find a Service’ tool that enables you to locate and contact aged care homes in your preferred area.
Each facility is different, so visiting a few will help you to decide which one is the most suitable for you. Not all aged care homes will be able to meet your care needs. Also, some provide higher standards of accommodation and broader food choices, which generally come at a higher cost. These are called ‘extra services’ facilities.
Seek financial advice
Moving into residential aged care can be a financially challenging time. However, obtaining financial advice can help reduce a lot of the stress by helping you to:
- determine which fees may be payable
- implement strategies that could reduce your care costs and/or increase social security entitlements, and
- ascertain whether care at your preferred facility(s) is affordable for you.
In conjunction with your solicitor or other legal professional, a financial adviser can also help you to ensure your estate planning affairs are addressed. Issues that may need to be considered include:
- selling, renting, retaining or transferring ownership of your family home
- nominating a person to maintain and/or rent your home on your behalf
- reviewing your enduring power of attorney
- reviewing your Will (including the benefits of including provisions in your Will that establish a Testamentary Trust upon your death), and
- reviewing your superannuation death benefit nominations.
While the Australian Federal Government provides some funding for residential aged care facilities, those who can afford it are expected to contribute to the cost of their care. The four different fees you may be asked to pay include:
- an accommodation payment – for your accommodation in the aged care facility, which may be paid as either a lump sum, regular instalments or a combination of lump sum and instalments
- a basic daily fee – which will usually be payable by all residents and is a contribution towards daily living costs, such as nursing, personal care and meals
- a means-tested care fee – which is an additional contribution towards the cost of care that you may need to pay depending on the assessment of your income and assets, and
- an extra services fee – which may be payable if you choose a higher standard of accommodation or additional services and it varies from place to place.
It’s important to ensure you will have sufficient assets to pay the accommodation payment required to secure yourself a spot in your facility of choice when the time comes, as well as cover the ongoing aged care fees and your living expenses.
There are a range of strategies that can be used to reduce aged care fees. However, caution needs to be exercised to ensure you have enough money to afford the care you’d want. A financial adviser can help you to address this complex issue.
Get your eligibility assessed
Before you can enter an aged care facility and receive Government support, your health situation must be assessed by the Aged Care Assessment Team (ACAT). The assessors are generally health professionals such as doctors, nurses and social workers who specialise in aged care.
This is a free service that can be done at home or in a health centre or hospital. The purpose is to determine whether you are eligible to move into residential care, or can access a range of care services that would enable you to stay in your home longer.
More information about ACAT assessments can be found on the Australian Government’s My Aged Care website.
Apply for an aged care home
Once you’ve decided the type of care you want and can afford, and your estate planning affairs have been taken care of, it’s time to apply with an aged care home. To do this, you will need to complete an application form with the relevant aged care home of your choice.
You may find that a place in your preferred aged care facility is not available. In case that happens, it may be a good idea to lodge an application with a few places and ask to go on the ‘waitlist’. You can apply to as many places as you’d like and the facility will let you know if your application has been accepted.
If you are offered a place, you must be given a copy of the Accommodation Agreement before you move in. This agreement sets out the key terms and conditions and it should be reviewed by a legal professional. You must sign the agreement and decide how you will make the accommodation payment within 28 days of entering the facility.
Centrelink may also ask you to complete and lodge a ‘Request for Combined Assets and Income Assessment’. If you already receive a Centrelink benefit and have provided details of your income and assets to Centrelink before, you may only need to fill out a shorter version of the form.
Centrelink will then use the information to determine what, if any, means-tested care fees you may need to pay.
If you would like to find out more about moving into an aged care home, check out the My Aged Care website or contact Arco Advisory on 9562 0742.
Important information and disclaimer
This article has been prepared by Arco Advisory an authorised representative of FSP ABN 52 991 176 712 AFSL 237590. Any advice provided is of a general nature only. It does not take into account your objectives, financial situation or needs. Please seek personal advice before making a decision about a financial product. Information in this article is current as at 1 July 2020. While care has been taken in the preparation of this article, no liability is accepted by Arco Advisory, FSP or its related entities, agents or employees for any loss arising from reliance on this article. Any tax information provided in this article is intended as a guide only. It is not intended to be a substitute for specialised tax advice. We recommend that you consult with a registered tax agent.
 An Aged Care Assessment Team is referred to as an Aged Care Assessment Service (ACAS) in Victoria.
In this article a reference to ACAT includes a reference to the Victorian ACAS.