Around the grounds - "your numbers are not relevant"
Over the last few weeks, I have been wheeling out a number of statistics that talk of tenure in aged care, gender make up, marital status and other interesting data for people to consider in aged care planning.
Again and again, aged care providers I speak to highlight to me how quickly these statistics are going out of date.
People are staying at home longer
The reason for this is home care, and more generally, government efforts to help people stay in their homes for longer. These efforts have really increased in scale over the last 5 years, and the statistics are yet to reflect this influence.
Because people are getting more support in their homes, the need for residential aged care may becoming more short term. The argument is that most of the people in long term aged care now (say 5 years or more) entered care before home care really got started, and if they had the home care options that people have now, they may not appear in the statistics as long term aged care residents.
An expectation of shorter stays in residential aged care
So if home care is keeping people in their homes for longer, then there is the expectation that stays in residential aged care are getting shorter.
If residential aged care is only for a short time period, should families spend more on accommodation in the expectation that time in residential care will be shorter?
In helping the family of a resident understand their options going into care, cashflow is the big story.
There can be situations where the money can run out.
For example, an accommodation bond can be paid like an outstanding loan, at an interest rate set by the government. There are also extra service beds, where the payment of the fee (potentially in addition to paying a bond at an interest rate), could result in quick depletion of the resident's assets. If these cashflows are not supported with earnings on investment assets, rent or aged pension, reserve assets can run down very quickly.
Things change after
Make no mistake, the government wants those that have the ability to pay more, to pay more.
If cashflows are going to be more onerous, how long should families expect to have to find the money to support aged care accommodation costs?
To "cashflow it"
What if a family chooses a more expensive bed, thinking the need for the bed won't be long enough to put pressure on the financial situation. They may choose to run down available cash at a high rate. They may choose to "cashflow it".
What happens when the stay goes longer than planned?
It is not uncommon for an aged care resident to improve once in care - with regular meals and a focus on care, families could expect this to happen. Let's face it, this is a good thing right!?
These are challenging situations for families and providers. These situations will be more prevalent with a system that seeks a higher contribution from those that can afford it.
Families will be faced with more complex decisions that will require not only financial clarity, but also input from care providers and physicians.
If you decide to "cashflow it", do it with eyes wide open.
We can help.