For most people, growing older means that there are times when you find it difficult to manage with day-to-day living activities.
This can be quite frustrating because you may still want your independence but realise you need help. If you are caring for a friend or family member who needs help, it is often very difficult to gain a clear understanding of the options available and the costs, as well as determining who can help you get the answers you need.
Mark Felton is our Seniors Care and Planning specialist. He helps our Senior clients on a daily basis. He has clients who:
- Find it difficult to manage their day to day activities.
- Live a big home that is no longer required.
- Have had a life partner pass on.
- Just want to move into a place with like-minded people.
He also helps elderly parents of clients who need Seniors or Aged Care. This can be quite difficult and time consuming if they didn’t have Mark’s help. Not to mention the emotion clients experience by having a loved one who now requires more care, whilst trying to maintain a level of independence and financial stability. These clients look to Mark for options and alternatives.
As a result of being in business for 50 plus years, we have become a specialist in the Aged Care/ Senior Care situation. Mark has personally dealt with many and varied Senior and Aged Care situations, and he knows the pitfalls and challenges personally. He has been impacted by Aged Care directly, as he has recently had to help his parents in law into Aged Care.
There are also a range of financial issues to consider. With longer life expectancies and the importance of a fulfilling lifestyle, retirees need to put a lot of thought into where and how they will live in retirement. It is important to speak to a Lindale Financial Planner regarding Centrelink entitlements or investment income. We can implement strategies to assist in:
- Reducing assessable assets and/or income;
- Increasing social security entitlements; and
- Minimising entry and ongoing costs for aged care accommodation.
The costs of residential care can be the most confronting aspect for the inexperienced. Whilst facilities are not government run, the cost of care is partly funded by the government but there can be still significant costs to residents.
Permanent Residential facilities now use the same structures to calculate fees, however total fees will vary depending on care 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.
It is critical to have a complete understanding of the assessment process and criteria. We can assist you in navigating through this process.
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.
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.
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. It may well be possible to keep the home, rent it out and use the income from this to fund the accommodation entry fees. By doing this, both the value of the home and the rental income generated may still be exempt from the assets and income tests respectively. There are no simple answers here, so it is vital to consider the total income picture and not just the pension in isolation.
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 to be paid by the person entering 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. Again, there is no simple answer to this; it requires a careful analysis of the resident’s other assets and income. This is why you should speak to one of our specialists who can help relieve any stress and worry. Call on 03 9848 5933 to arrange a complimentary private discussion.
Where to from here?
Make a time with one of our Financial Planners and work out how we can:
- Reduce assessable assets;
- Increase social security entitlements; and
- Minimise entry and ongoing costs for aged care accommodation.
We also need to understand if Aged Care is the most appropriate option for you. Should you keep the family home and utilise at-home support? Are there other accommodation options which might fit better? It is best to work out a strategy that will achieve your retirement goals.