Aged care: Expanding our advice for your loved ones

November 2017

Navigating the complex world of aged care for your loved ones can be daunting—both emotionally and financially. That’s why we recently launched a specialised new aged care financial advice service to help guide you.

What’s the service?

You can now get comprehensive advice on aged care designed specifically for you and your family.

Some of the topics our Australia-wide, accredited aged care advisers can help you with include:

• how the Age Pension may be affected by different care options
• paying for residential aged care accommodation
• referring you to a residential placement provider
• ongoing care costs
• decisions about whether to sell assets
• potential tax implications
• cash-flow advice related to paying for care and living expenses, and
• the impact to net wealth and estate planning.

Most importantly, this service helps give you and your loved ones that added peace of mind.

Who can get it?

There are two ways to access comprehensive aged care advice:

• Your related family member must be eligible to join as a Personal Account member, or
• You hold a valid Enduring Power of Attorney (or equivalent authority) for your related family member.

What should I know about aged care?

Aged care services provide support to individuals who need help to continue living independently at home or within a full-time care arrangement. There are two types of services:

• help at home, such as Home Care
• moving into a residential care facility

If your loved one would like to continue living at home but needs support, ‘Help at home’ programs through the Commonwealth Home Support Program or Home Care Packages Program may be available (subject to assessment). These include services like personal care, transport, meals and nursing.

If your loved one needs ongoing help with day-to-day tasks or health care, moving into a residential aged care home may be more appropriate. This allows the person to live in a supported environment where help is available 24 hours a day. The resident may pay an accommodation fee (lump sum or daily rental payment) as well as ongoing facility fees, but the government also generally supplements a portion of the costs for residents.

By contrast, a retirement village is effectively a community of older people living independently (or with some limited support services) and isn’t considered aged care. There are many different legal structures available, and each option raises different issues, including tax, service charges, security of tenure, and vacating requirements. So, it’s wise to get legal advice so that you clearly understand the implications of choosing this type of accommodation.

Aged care costs

For home care services, individuals are asked to pay a basic daily fee of around $10 per day. [1] An income-tested care fee may also apply. 

Costs for residential aged care generally fall into the categories of ‘accommodation’ and ‘daily care’.

How much you pay for accommodation will depend on the facility and possibly even the type and size of room. If your loved one has a low income and minimal assets (and qualifies as a ‘low-means resident’) the government will subsidise some or all of this cost.

How much your loved one contributes towards ‘cost of care’ will depend on their income and assets. For residential care, residents are asked to pay the basic daily care fee. This is set at an amount equal to 85% of the basic single person rate of age pension. Costs will only be more than this (as a means-tested care fee) if the resident’s income and assets are above certain thresholds.

^{[1] The fee as at September 2017 is $10.17 but is subject to change every six months. Go to agedcare.gov.au for more information.}