Wealth Connexion explains how your finances can be affected during the transition to an Aged Care facility for yourself or your loved ones providing specific Aged Care financial advice.
We understand that Australia’s Aged Care system can be daunting, especially when it comes to your finances. It is important to be aware and prepared for how this change will affect you and your family. Are you feeling overwhelmed by thoughts of what you are going to do financially? Wealth Connexion offers expert Aged Care financial advice and is here to help you understand how the system works.
How to get into an Aged Care facility
The first step in moving into aged care is being assessed either over the phone, or at home, or in the hospital. This initial stage is to establish medical history and assess care needs.
Next, the Permanent Residential Aged Care – Request for a Combined Assets and Income Assessment form will need to be completed for the Department of Human Services. This is essential if you wish to receive help with the costs of living at the facility. The department will determine how much you need to pay for your accommodation and if you need to pay a means-tested care fee based on your assets and your income.
It will then come time to make the decision of which Aged Care facility is right for you. We recommend visiting as many places as you can and then apply to the ones that you feel are right for you. There may be multiple waiting lists, so it is important for you to have options. It is also beneficial in knowing the types of homes that are available in your area as this affects the cost and services that they offer. The Aged Care Financial Advice specialists at Wealth Connexion are available to ensure you are aware of the costs associated with this decision-making process, how it affects your superfund and other finances into the future.
Understanding the Finances of Aged Care Facilities
At Wealth Connexion, we encourage you to understand how your current financial situation will impact the decision of moving into Aged Care. The pricing of Aged Care fees depends on the level of care being received.
The accommodation payment is the biggest cost, so there are different ways in which to pay it. The advisors at Wealth Connexion understand that this process can happen suddenly and we can work with you to decide which payment form best suits your circumstance. The options include:
- Bond or lump sum up-front, which is refundable (called a Refundable Accommodation Deposit, or RAD)
- Daily amount (called a Daily Accommodation Payment, or DAP)
- Combination of RAD and DAP
When considering these options, it is important to avoid taking financial actions that could result in a loss of age pension or increased aged care costs, so be sure to speak to one of our experts to act in a way that best suits your needs.
What are some financial options going forward?
It might seem as though selling the family home to pay the bond (RAD) is your best option. Or maybe you’re wondering whether it’s better to rent it out to help pay the daily amount (DAP)?
Either way, the decision should prioritise the goals of the person moving into care. It is often a 6-month process from selling and settling a home, so it is also important to have a plan for your finances moving forward.
Similarly, if you are leading more towards renting the former home, it is important to consider the income tax impact, capital gains implications and the cost of ongoing maintenance.
The option you choose can affect the Age Pension assets test and as your Aged Care Financial Advisors, we are here to give you the best advice on what to do with your home for your needs.
