’Tis the Time to Talk About 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 sometimes they realise 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 12 tips for navigating the 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 make the transition easier for everyone. There is a wide range of accommodation and care options. Sometimes older people feel like a conversation about aged care season is a slippery slope to a nursing home. In reality, having these conversations and planning early can be the best antidote to needing to move into residential aged care.

But if the decision is made to move into residential aged care, starting your research sooner rather than later normally means you have far more choices.

2. Look into Home Care.

There’s 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 include equipment and aids, home modifications, respite services, home and garden maintenance and social activities.

Commonwealth Home Support Programme (CHSP)

The range of services available varies from one provider to another, as does the amount you will pay. People who can afford to do so will be asked to pay a co-contribution towards their services based on their income.

Home Care Packages

Packages are provided on a consumer-directed care basis. This means that you control the budget of funds in your home care package. You need to choose a provider to host your package. You can receive your services from them, from other approved service providers or a combination. You can even self-manage your package if you wish. The amount you pay for your Home Care Package depends on the level of package you receive and your assessable income.

There are four levels of the package. The basic daily fee is based on the level of your package and ranges from $9.88 per day at level 1 to $11.02 per day at level 4. In addition, you can pay an income-tested care fee. This is based on your assessable income of up to $15.81 per day if you are a pensioner or $31.63 per day if you are self-funded.

Department of Veteran’s Affairs (DVA)

People who are eligible for DVA services should contact them about the wide range of services and support they provide to returned servicemen and woman and their widows/er.

3. Arrange an assessment of your care needs.

The first step in accessing government-funded aged care is to have your care needs assessed. This starts with a call to MyAgedCare. If you are going to be receiving Commonwealth Home Support Programme (CHSP) services, then you will need a Regional Assessment Service (RAS) assessment. If you want 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).

The assessments are free and easy, but you can be waiting many weeks, sometimes months, at busy times. The assessment will normally be conducted face-to-face in your home. You will be asked questions about the things you are able to do for yourself and those that you need help with. Rest assured that the assessment team are there to help you.

4. Take a Break.

Respite in an aged care facility can give carers a much-needed break. It is also a great way to “try before you buy”. A respite 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. There is no accommodation costs or means-tested care fee, you only pay the Basic Daily Fee, currently $53.56 per day. Of course, if you receive extra or additional services, which can include wine with meals, hairdressing, massage or Foxtel, then you will need to pay for those.

5. Consider Downsizing.

Retirement villages and land lease communities are becoming a popular choice for people who need some care. They provide the independence to do what you can for yourself. There is care and support for things that you can’t (or don’t want to) do.

If you’re thinking about making a move to a retirement community, it’s important to crunch the numbers. Make sure you break down the costs into the Ingoing, Ongoing and Outgoing. Simply comparing based on the upfront price means that you are ignoring two key elements of costs (what you will pay while you live there and when you leave).

Other important questions that you should ask include:

• whether you need to pay stamp duty
• how the ongoing costs are determined
• how much money you can expect to receive after you leave
• how soon will you get the money after you leave

Some contracts are subject to guaranteed repayment time frames. Others rely on the dwelling being sold to the next person.

6. Research your options.

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. In the words of the movie “The Castle”, “It’s the vibe”. Most retirement communities will have opportunities for you to take a tour. You may be able to join in an activity or two 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 joining them for dinner on a Sunday or the occasional holiday. Make sure you think about the dynamics of the house now and in the future.

7. Crunch the numbers.

Funding the move into a granny flat, retirement community or aged care home often involves the sale of 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, the amount of money they will get for their current home will be greater than what they spend on their new home. This often causes a reduction (or loss) of pension under the assets test.

There are different asset thresholds depending on whether you are single or a couple and based on whether you are classified as a homeowner or not. Once your assets exceed the relevant threshold, your pension reduces by $7,800 per year for each $100,000 – which can have a terrible effect on your cash flow.

8. Timing.

If you are a couple, then the timing of your move into aged care can make a significant difference to your costs. It’s important that you understand the impact of moving together or separately (even a day apart).

You see, your home is exempt from your aged care means test while your spouse lives there. Moving in separately can enable the first person to qualify as a “low-means resident”. This means 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 you will be provided.

Additionally, make sure you have crunched the numbers on what it will mean for your pension and your cost of aged care 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.

9. Supersize your superannuation.

Downsizers who are over the age of 65 and have lived in their home for ten years or more can qualify to make a “Downsizer Contribution” to their superannuation. You do not need to satisfy the work test or the age test to make a downsizer contribution. If you are eligible, you can contribute up to $300,000 from the sale of your home. This means an eligible couple could contribute up to $600,000.

You can only access the scheme once (once accessed, you cannot use it again on another property). 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. However, your superannuation is included in the means-testing arrangements for the Age pension.

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 the estate and those that won’t and provides a clear document of your wishes. It is really important to have one and have it properly documented. It doesn’t need to be complicated. There can be significant financial benefits to having a testamentary trust (which is where your will creates a trust that is responsible for the distribution of 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 Advice.

Whether it’s a granny flat, a retirement community, home care or an aged care home, crunching all of the numbers can be complicated. Seek advice from a Retirement Living and Aged Care Specialist. This will ensure you understand all of the choices that you have and the strategies you can use to make it more affordable. The right advice is well worth the cost.

Rachel Lane is the principle of ‘Aged Care Gurus‘ where she oversees a national network of specialist advisers. She writes regular columns on retirement living and aged care for the Sydney Morning Herald, Melbourne’s The Age and the Brisbane Times. She also regularly speaks on TV and Radio. Rachel has co-authored a number of books, including the Best Seller Aged Care, “Who Cares?” and her new book “Downsizing Made Simple”.