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The five key questions on aged care

Sooner or later many of us need to deal with a relative who is no longer able to manage independently in their own home. To try and help people gain some perspective and identify what the priorities should be, focus on what we call the five key questions on aged care:

The degree of care needed is evaluated by an Aged Care Assessment Team (ACAT). ACAT comprises health professionals and social workers and their role is to assess if the person needs assistance services at home or if a move to residential care is needed. In-home care can be arranged through the Department of Health in the form of Home Care Packages and Respite Care Services.

If it appears that independent living is too much of a challenge then they may recommend residential aged care. All facilities provide assistance with daily living needs, such as meals and cleaning as well as a degree of nursing care. However not all facilities can offer more intensive support for a higher level of care, including full time nursing care. The ACAT assessment will determine which level of care you need to look for so you can then decide on a facility. It is important to take a look first hand, to get a feeling for the standard of care available, any extra services and to start comparing the pros and cons of different aged care homes.

Whilst facilities are not government run, the cost of care is partly funded by the government and there are still significant costs to residents

Permanent Residential facilities now use the same structures to calculate fees, however total fees will vary depending on the facility and any extras that are agreed. All require a form of accommodation payment plus various ongoing care fees. Resident’s assets and income will be assessed by Centrelink to determine the level of fee and the degree of subsidy made by the government. You can of course enter a nursing home with ACAT assessment, but waive the Centrelink assessments – however this may mean that no Government subsidies are forthcoming.

While all these costs may seem difficult to digest, it is best to call 03 9848 5933 to seek some advice on whether there are ways and means to limit fee liabilities so that aged care doesn’t end up costing more than is necessary.

In many cases, the family home will be the major asset involved and once the reality of the costs of aged care start to become apparent, it may seem inevitable that the family home needs to be sold to fund these costs. The situation with the family home needs to be carefully considered.

If a spouse still remains at home then the value of that home is not assessable for accommodation entry fee purposes and this will serve to reduce the fee contribution required by the aged care facility.

If the home is left vacant, however, then it is assessable. The question here is whether it is better to sell the home or to retain it and rent it out. There is no simple answer to this; it requires a careful analysis of the resident’s other assets and income. This is where Mark Felton in our office can relieve any stress and worry.

It is best to call 03 9848 5933 to arrange a complimentary private discussion.

Maintaining aged pension entitlements can be a very sensitive area for many people. If selling the family home is being considered, then it is important to factor in how this may affect pension levels, as the value of the home may fall under the assets test once sold.

We recommend caution in this regard. Again, there are no simple answers here, so it is vital to consider the total income picture and not just the pension in isolation.

Optimising ongoing income for the aged care resident can be quite a challenge once all the complexities of the aged care regime are taken into account.

The need to minimise fees, maximise the age pension, deal with the family home and structure other financial investments will all have an impact on what ongoing income can be generated.

We urge people dealing with aged care not to go it alone. Analysing all these issues and structuring the most effective solution takes some skill to organise. There is a real risk of poor decisions being made if someone unfamiliar with the aged care environment either puts these issues in the too hard basket or fails to properly assess how all the factors interrelate.

To get a proper assessment contact Lindale Insurances on 03 9848 5933.

This information does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.