Article by 

Rachel Lane

While many people plan for retirement, often counting down the years, months and days, very few plan for aged care.

Instead, aged care is thought of when a crisis unfolds. This can make the decision rushed, emotionally difficult and very expensive. Understanding the options available to you and being able to quickly calculate and compare options before you need care can help you to have more choices. You will make better decisions and save a lot of money and stress.

One reason why people avoid planning for aged care is because they think it is “a slippery slope to a nursing home. It might help to know that of the 1.5 million Australians who received aged care last year only 243,000 lived in an aged care home. So the first place to start is…

Where will you live?

There is a smorgasbord of accommodation options available to senior Australians. These include apartments, granny flats, retirement villages, land lease communities, and residential aged care.

Before the need for care arises many people are adamant about staying in the family home. But there can be significant downsides to this, from a practical point of view most homes are not built with the view to providing care. While some modifications are simple and inexpensive, others may cost tens of thousands of dollars, or simply be impossible. And then there can be the growing isolation if you are no longer driving or have been widowed.

You may wish to move in with one of your children. In doing that you may establish what Centrelink call a “granny flat right”. Granny flat arrangements can have enormous implications emotionally and financially for you and the person you live with, so it needs very careful consideration.

Retirement villages and land lease communities are becoming a favoured accommodation choice for many retirees. The homes are often built with a view to delivering care and there is often a strong social network. Retirement communities can often provide a good balance between independence to do the things you can do and support for the things that you can’t (or don’t want to) do.

One of the crucial considerations about your accommodation options is at what point would you need to move again. Do you want live somewhere that can support you as you age? Or would you prefer to kick up your heels for as long as possible — then move again if needed?

Of course, not everyone will have that choice. When it comes to your safety and wellbeing, the right decision may well be to move into an aged care home. Many aged care homes nowadays resemble a 6 star hotel more than they do a “nursing home” of years gone by. You may be pleasantly surprised by your options.

How much care will you need?

How much care you need now and how much you anticipate needing in the future are crucial considerations. There is a range of government funded care and support services available to you through Commonwealth Home Support Programme (CHSP), Home Care Packages, Department of Veteran’s Affairs (DVA) services and other programmes such as the Short-Term Restorative Care and the Transition Care Programmes.


The first step in accessing government funded aged care is to have your care needs assessed. This 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, Transition Care, Short Term Restorative Care or have a respite stay or a make a permanent move to an aged care facility, you will need to have an Aged Care Assessment Team (ACAT) assessment.

The assessments are free and easy but you can be waiting many weeks, sometimes months, at busy times.
While many people think of home care as a regular service in the case of Short Term Restorative Care and Transition Care these are generally more intensive short-term programmes that can be provided in your own home or an aged care home, or a combination of the two.

When it comes to the other home care services it’s important to know that you can access more than your regular care. They can also provide you with equipment and aids, home modifications, respite services, transport, home and garden maintenance and social activities.

In addition the government funded services, there are also private care services which you may wish to use instead, or to topup the funded services.

What will it cost?

When it comes to your accommodation costs, it is easiest if you break it down into your ingoing, ongoing and outgoing.

When it comes to the ingoing, there may be transaction costs such as contract preparation fees or stamp duty that you need to factor in on top of any price. Whatever accommodation choice you make there will normally be ongoing costs associated with it. In a granny flat arrangement you may pay rent or board. Retirement communities normally have a weekly or monthly fee. In residential aged care you will need to pay a basic daily fee and possibly a means tested care fee, you may also choose to pay some (or all) of your accommodation cost by daily payment.

In some properties you will have a contract that has an exit fee. This can be complex formula that involves shares of capital gain or loss, renovation costs, marketing expenses and selling fees. In some cases your property may also be subject to a guaranteed buyback, in the event that it doesn’t sell within a certain period you are guaranteed to get your money back. In the case of a granny flat, your exit fee is often 100% because the granny flat can’t be sold separately to the home.

When it comes to the cost of your care, the amount you will pay for government funded aged care is often based on a basic daily fee (up to $12 per day for home care and $57 per day for residential aged care), plus a contribution based on your means. For home care, you are only assessed based on your income. In residential aged care it is a combination of your assets and income. If you receive private care then you will simply pay the market price.

What are the implications?

Your accommodation and care choices can have significant legal and financial implications today and in the future. Ultimately whatever accommodation and care options you make will involve a contract (yes, even if it is a granny flat arrangement with your children you should still have a written agreement). You should look at your contract through 3 lenses; your rights, responsibilities and costs and make sure that
the balance of those 3 things is fair.

Before you make any decisions you should make sure you understand how it will impact on your:

  • overall asset position
  • (or your children’s) need to pay tax
  • pension entitlement and other benefits such as rent assistance and health cards
  • investments
  • cash flow
  • estate planning wishes
  • ability to fund residential aged care in the future (if that is not your choice now)

While many people bemoan the complexity of aged care decisions, the complexity comes from the fact that you have so many choices, and that’s a good thing! Aged care is a smorgasbord, it’s certainly possible and quite common to move from one arrangement to another.

The two most common mistakes people make are leaving it too long (reducing their options), and not seeking specialist advice (costing themselves far more than the advice would have been). So plan ahead now and seek specialist advice.

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  1. Knowing that an assessment can take months is it possible to apply before aged 65 eg 64 + 9 mths as told that my application will not be accepted unless 65+ by My Aged Care

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