Aged Care - Options and Strategies

As we continue to live longer, the number of older Australians in need of extra care will likely grow rapidly. In this month's article we take a look at the different options available to those in need of care and what they, or those looking after them, may need to consider in regards to their financial affairs.

The information we have compiled below represents considerations that our Aged Care clients have had to reflect upon prior to making some important lifestyle and financial decisions. Your situation may be different and given the complexities of Aged Care, please seek personal advice as the following is not intended to be a summary of all costs or strategies that may be relevant to your personal circumstances.

The first step, as part of this entire process, is to firstly figure out if any care is actually needed.  This is left up to an Aged Care Assessment Team, a government-run service that helps older people and their carers work out what level of care is needed.  Once this is known, aged care options, costs and useful strategies are important to understand. 

 

Low Care 

High Care
Stay At Home* Option If you wish to remain at home you may be able to access the Home and Community Care (HACC) program. Depending on your accessed level of care (1-3) you can receive assistance with basic daily activities, cleaning and meals.

Costs: Most of the costs for this program is Government funded, with some state governments assisting with different eligibility requirements. A small income-tested fee may be payable.		 If you wish to remain at home you may be able to access the Home and Community Care (HACC) program. Depending on your accessed level of care (4) you can receive assistance with basic and intensive daily activities, cleaning, nursing and meals.

Costs: Most of the costs for this program is Government funded, with some state governments assisting with different eligibility requirements. A small income-tested fee may be payable.
Aged Care Accommodation Option You may choose to move into an aged care Hostel in order to be closer to support and a community.  In this type of accommodation you can receive assistance with most of your daily activities and also may find it easier to transition into a higher care facility later on if required.

Costs: Different payments must be made when moving into a hostel -
  • Accommodation Bond (mainly refundable bond payable to the provider.) The actual bond amount is set based on your overall asset level less $43,000.  Bonds our clients have paid has ranged from $0 - $500,000. This can be negotiated to some degree and can be paid off periodically.
  • Basic Daily Fee (maximum standard fee of $44.54 per day) to cover meals, utilities and services.
  • Income Tested Fee of up to $70.74 per day for people on higher incomes.
  • Extra Services Fee may be added by providers who offer a higher level of service (such as pay TV). This can range from $10 per day up to over $100 per day.
 You may choose to move into a High Level Care Home (nursing home) due to the level of support you require. In this type of accommodation you can receive a high level of assistance, including bathing, clothing and other nursing care.

Costs: Different payments must be made when moving into a High Level Care Home -
  • Accommodation Charge of $33.29 per day.  Less may be payable for those who have a lower amount of assets.                
  • Basic Daily Fee (maximum standard fee of $44.54 per day) to cover meals, utilities and services.
  • Income Tested Fee of up to $70.74 per day for people on higher incomes.
  • Extra Services Fee may be added by providers who offer a higher level of service (such as pay TV). This can range from $10 per day up to over $100 per day.
Strategies
    • Increase Accommodation Bond - As the bond monies are not included as assessable assets and will not provide income, paying a higher bond can result in a more favourable Centrelink assessment for the aged pension and facility assessment for the income tested fee.
    • Keep home and rent it out - By doing this you effectively make your home a non-assessable asset and the rent received a non-assessable income. This can result in a more favourable Centrelink assessment for the aged pension and facility assessment for the income tested fee.
 
    •  Keep home, rent it out and pay bond off periodically - By doing this you effectively make your home a non-assessable asset and the rent received a non-assessable income. This can result in a more favourable Centrelink assessment for the aged pension and facility assessment for the income tested fee.
    • The above strategy is an issue for those who might be living in a retirement village as they may be forced to sell their unit upon moving into an aged care facility. It may be worth considering moving back into a regular home prior to this so as to benefit from this exemption on your home assets. 
 
    •  The above strategy is an issue for those who might be living in a retirement village as they may be forced to sell their unit upon moving into an aged care facility. It may be worth considering moving back into a regular home prior to this so as to benefit from this exemption on your home assets.
  

*This may include a house, retirement village apartment, granny flat or boarding arrangement