Aged care season and why we need to talk about it

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Article by 

Rachel Lane

Navigating parental care and when to step in: Rachel Lane’s expert tips to helping aging parents

Some people 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 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 the aged care season.

Talk about it

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

There is a wide range of accommodation and care options available. While sometimes older people feel like a conversation about aged care is a slippery slope to a nursing home, having these conversations and planning early can be the best antidote. 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 choice.

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 to take a tour or join in an activity – gather as much information as you can. 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. Make sure you look beyond the lovely furnishings and décor and really evaluate whether there will be barriers to getting care, things like pokey bathrooms and narrow doorways can make getting care hard.

Get your care needs assessed

The first step in accessing government funded 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 access 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). These assessments are free and easy, but you can sometimes wait many weeks, sometimes months, at busy times.

Look into home care

The great thing about home care is that it can be delivered wherever you call home. There’s a range of government funded home care services as well as 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.

Book in a break

A respite stay in an aged care home can give carers a much-needed break and it 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 is no accommodation charge or means tested fees, which means you only pay the Basic Daily Fee, currently $61 per day plus any extra services you receive like wine with meals, hairdressing, and Foxtel.

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 costs across the ingoing, ongoing and outgoing and don’t compare villages 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.

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 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.

Consider supersizing your superannuation

Downsizers over the age of 55 who have lived in their home for at least 10 years can qualify to make a superannuation downsizer contribution of up to $300,000, for couples that means up to $600,000 combined.

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.

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. For example, moving in separately can enable the first person to qualify as a “low means resident” and have some – or all – of 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.

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.

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.

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

About Rachel Lane

Rachel Lane explains the ins and outs of retirement living and aged care like no-one else. Her ability to break down complex arrangements and explain the pros and cons is embraced by millions of readers and she frequently speaks on radio and television. As Principal of Aged Care Gurus she oversees a national network of specialist financial advisers. Rachel holds a Masters in Financial Planning and has written several books including the best seller “Aged Care, Who Cares?”

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