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12 tips for ‘aged care season’

Some call it the silly season, others call it the festive season, but I call this time of year ‘aged care season’. It’s a time when families come together, maybe for the first time since last Christmas, and notice that Mum or Dad or both need some (or a lot) of care.

So, if your family gathering turns into a conversation about “what are we going to do to help Mum?”, here are my tips for navigating aged care season.

1. Talk about it

Conversations about care can be hard. Maintaining good communication and having a ‘with you’ rather than ‘to you’ attitude can it easier for everyone.

There is a wide range of accommodation and care options. Sometimes older people feel like a conversation about aged care is a slippery slope to a nursing home. But having these conversations and planning early can be the best antidote to needing to move into residential aged care. Whatever the choices are about where and how you wish to access care, starting your research sooner rather than later normally means you have far more choices.

2. Work out where and who

Whether you are considering moving into a granny flat with family, downsizing to a retirement community or moving into residential aged care, you need to do your research about where you want to live and who you want to live with.

Most retirement communities will have opportunities for you take a tour, join in an activity or attend an open day – gather as much information as you can from the staff and from the residents who are living there. When it comes to granny flats, it’s important to remember that living with family is not the same as sharing Sunday dinner or a holiday. Think about the dynamics of the house now and in the future and make sure you have a written agreement.

3. Get your care needs assessed

The first step in accessing government funded aged care is to have your care needs assessed, which starts with a call to MyAgedCare.

To receive Commonwealth Home Support Programme (CHSP) services you will need a Regional Assessment Service (RAS) assessment. To get access to a Home Care Package, a respite stay, or a permanent move to an aged care facility, you will need to have an Aged Care Assessment Team (ACAT) assessment (known as ACAS in Vic). The assessments are free and easy, but you can be waiting many weeks, sometimes months, at busy times.

4. Look into home care

The great thing about home care is that it can be delivered wherever you call home. There are a range of home care services, including Commonwealth Home Support Programme (CHSP), Home Care Packages, Department of Veteran’s Affairs (DVA) services and private care.

While many people think of home care as a regular service you can access more than just your regular care. Home care services can also provide you with equipment and aids, home modifications, respite services, home and garden maintenance and social activities.

5. Book in a break

A Respite stay in an aged care home can give carers a much-needed break and is also a great way to ‘try before you buy’. A stay of 2 or 3 weeks is normally long enough to get a good idea of the activities, the other residents, the food and, most importantly, the care.

Respite is also very affordable as there are no accommodation costs or means tested fees - you only pay the Basic Daily Fee, currently $57 per day plus any extra services you receive like wine with meals, hairdressing, massage, or Foxtel.

6. Consider village life

Retirement villages are becoming a popular choice because they can provide the independence to do what you can for yourself, with care and support for things that you can’t (or don’t want to) do.

When it comes to the financial arrangements, look at the ingoing, ongoing and outgoing costs. Don’t just compare based on the upfront price or the exit fee. Other important considerations include whether you need to pay stamp duty, how the ongoing costs are determined and how much money you will receive and how soon after you leave (some are subject to a buyback while others rely on the next sale). If you are going to receive care from the village, ask for a menu of their services and prices.

7. Be prepared for pension consequences

Moving into a granny flat, retirement community or aged care home normally involves selling your current home. If you receive a means-tested pension such as the Age Pension, make sure you understand the impact of your move on your pension and other entitlements such as rent assistance and concession cards.

For many people their current home is worth more than their new home. This financial downsize can cause a reduction (or loss) of pension. It is often due to the assets test which reduces your pension by $7,800 per year for each $100,000 over the threshold and can have a terrible effect on your cash flow.

8. Consider supersizing your superannuation

Downsizers over the age of 60 who have lived in their home for at least 10 years can qualify to make a superannuation Downsizer Contribution of up to $300,000. If you are a couple, you may be able to contribute up to $600,000.

You can only access the scheme once (once accessed you cannot use it again on another property) and your contribution will need to be made within 90 days of your home selling (unless there are extenuating circumstances) with the appropriate downsizer contribution form completed for your super fund. The contribution doesn’t count towards your contribution caps and there is no requirement that you purchase a new home. It’s important to note that your superannuation is included in Age Pension means tests once you reach pension age.

*Legislation is currently before the Senate to lower the contribution age to 55 and provide a 2-year pension asset test exemption and apply the lower deeming rate (0.25% p.a) on the proceeds that will be used for your next home.

9. Get the timing right

If you are a couple, then the timing of your move into aged care can make a significant difference to your costs. Because your home is an exempt asset while your partner lives there moving together or separately (even a day apart) can create very different outcomes.

Moving in separately can enable the first person to qualify as a “low means resident” and have some or all their accommodation cost subsidised by the government. Before you employ such a strategy make sure you are happy with the accommodation, and you have crunched the numbers on what it will mean for your pension and care costs now and in the longer term. It may sound crazy, but it is possible for low means residents to end up paying more than the market price.

10. Have a trusted attorney

Having an Enduring Power of Attorney enables a trusted person or people, rather than a tribunal or a court, to make decisions for you when you can’t.

Powers of attorney can be made for financial decisions, medical decisions and lifestyle decisions. You may wish to nominate the same person or different people for different roles. Make sure you have one.

11. Estate plan

A good estate plan is more than ‘just a will’ – it considers the assets that will be part of your estate and those that won’t and provides a clear document of your wishes.

Your estate plan doesn’t have to be complicated, although there can be benefits to having a testamentary trust (which is where your will creates a trust for distributing your assets and income). The most important thing is to speak to a legal professional about who you do (and possibly don’t) want to receive your assets when you are gone.

12. Get good advice

Whether it’s a granny flat, a retirement community, home care or an aged care home crunching the numbers can be complicated. Advice from a Retirement Living and Aged Care Specialist® will ensure you understand all the options available to you, the strategies you can use to make it more affordable and that there are no nasty surprises down the track.

 

Rachel Lane is the Principal of Aged Care Gurus where she oversees a national network of adviser dedicated to providing quality advice on retirement living and aged care. She is also the co-author of a number of books with Noel Whittaker including the best-seller 'Aged Care, Who Cares?' and their most recent book 'Downsizing Made Simple'. To find an adviser or buy a book visit www.agedcaregurus.com.au.

 

4 Comments
Jenni
December 10, 2022

Could someone point me in the right direction to an existing article on how one pays their contribution towards an aged care package. I have friends who are on a full pension who say they do not pay anything!

The MyAgedCare website suggests some providers do and some do not charge the daily care fee (about $10 per day). why is this the case? I would need to pay a means tested fee as well, so how does this get paid. It has been suggested to me that both the daily care fee and the means tested fee can just come out of the package you are eligible for. Is this correct, or does the contribution come directly from your personal bank account?

Any help you can provide would be appreciated.

Rachel Lane
December 11, 2022

Hi Jenni,
There are two costs in a home care package:
The basic daily fee (around $10per day), this can be discounted or waived as negotiated between yourself and the provider.
The income tested care fee, this is a means tested amount calculated by the government and used to offset the funding they provide, it can be up to around $30 per day. This generally cannot be negotiated. It is paid by you, normally by direct debit.
Hope this helps clarify for you.

Jenni
December 13, 2022

Thanks. In other words if you spend everything you earn or put it into a large house you can $10 to $50k on top of the full pension tax free with no contribution by an individual towards the cost. Given that these packages are not only easy to get (I know a couple with a level 2 and 3 package who painted their own house!) and they can be used for social interaction items eg gym fees, art classes, etc as well as getting household chores done it makes me wonder why I bothered saving money to be an independent retiree when I could have up to $75k tax-free at taxpayers expense.

No wonder the Government is going broke.

Paul Wasserstrom
December 07, 2022

Think I broke rule 1 by talking 'to you' last Christmas. Time to make amends this Christmas.

Thanks for the tips.

 

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