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Financial planning for those entering an age care facility

Do you have elderly parents or other relatives who need to enter an age care facility?

Australians are now living longer and as a result aged care facilities are in great demand. For those who are unable to live independently the most popular facilities are low care hostels and high care nursing homes most of which are government funded.

Entering an aged care facility can be a difficult and emotional experience for both the individual and their family. For example for those who are single consideration has to be given to the treatment of the family home, which if sold may result in the loss of age/DVA pension entitlements and higher daily care fees.  

As the fees and charges structures for age care facilities are complex, expert financial advice is required to ensure the financial needs of individuals are met.

Things you should know about government funded age care facilities:

  • Individuals cannot enter an aged care facility without an assessment of their needs by an Aged Care Assessment Team who will determine the level of care required.
  • Those who require a high level of care will generally require nursing home accommodation, whilst those who require a lower level of care maybe suited to hostel care.
  • Nursing homes and Hostels have different fee structures which are very complex. 
  • Residents are required to contribute to the cost of care by paying various fees and charges.
  • High care nursing home residents will pay daily care fees and a possible accommodation charge. If the facility is classed as an “extra service” facility, the resident may be asked to pay an accommodation bond in which case the accommodation charge will not apply.
  • Low care hostel residents will also pay daily care fees and an accommodation bond if their assets exceed a certain threshold as governed by legislation.
  • Daily care fees are usually calculated in relation to a person’s income.
  • Centrelink or the DVA are responsible for calculating the individual’s level of income even if they are not in receipt of a pension or allowance.

If you have an elderly parent or other relative who needs to enter an aged care facility it is crucial that they seek the advice of a Lifespan Financial Adviser to help decide how to best manage their finances. This is particularly important for those who are ineligible for age/DVA pension benefits as the ongoing costs of age care can be considerable.

Disclaimer:

The material provided in this document is provided for information only and constitutes general financial product advice. It does not take into account your personal financial situation, objectives and needs. Consequently before acting upon the information in this brochure you should consider its appropriateness to your financial situation, objectives and needs.

 

 

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