Concise aged care financial advice when you need it.
Key Points
Expert help is needed to cut through a complex financial story at a time of high emotion and stress.
Government resources are vast, and working out the relevant components, tools and administrative process takes an enormous amount of time and focus away from the importance of looking after a loved one.
Confidence to commit to a course of action is vital when other people’s money is at stake, or there are multiple decision makers involved.
With almost 20 years experience, and in working with hundreds of Australians working out financial implications of a move to aged care, we are expertly placed to help you clarify and move forward with aged care decisions with confidence.
Each person has a unique financial situation that will result in a unique set of financial options when considering government means testing, the choice of aged care provider the ability to sell assets to pay for care and the situation of spouse or dependents.
See the end of the article for some useful links.
Any help to alleviate the complexity of this process is going to save time and reduce the stress of an already emotional and difficult situation.
Jane’s Story
Jane’s mum went from independence to being in need of full time residential aged care in just one week. It’s a familiar story - a fall, a stay in hospital, and advice that mum needs to move to full time residential aged care.
Jane is already busy - with work and family commitments, and her siblings are interstate, meaning she is handling a lot of the work of transitioning her mother to residential aged care.
Jane and her siblings have each been doing their own research into the financial side of the transition, and are having difficulty coming to a consensus on what to do.
Plenty of information
After looking at residential aged care options proposed by friends, medical professionals and some internet searches, Jane has an idea of the right place for her mother.
Meanwhile she doesn’t know where to start with the financial side of the story. Her investment advisor had no expertise to offer in aged care, and neither did her accountant.
The aged care provider advised specialist financial advice, but was hesitant to make a recommendation.
She had begun looking for specialist aged care financial advisors online, downloading guides, trying to learn the rules, and was becoming more and more confused.
Concerned about the agendas and experience of people she was finding on the internet, and unable to get help from her accountant, she was trying to learn complex rules herself, and was coming up with few constructive answers.
Jane was recommended Later Life Advice, and was comfortable with the idea of an aged care consult.
The consult started by gathering information about Jane’s mother’s financial situation and aged care bed options, and quickly followed on with an efficient discussion of options and clarification of questions around her mother’s options. In this case she was able to bring in her siblings to the consult via zoom.
Later Life Advice was able to financially model any pathways presented by Jane and her siblings and was also able to qualify some other ideas the siblings had - without lengthy delays.
The situation
Jane’s mother is 90, she owns her apartment (worth about $750k) and has about $25k in savings. She is on the full age pension.
Jane had found a bed that she thought was suitable in a nearby aged care facility with a Refundable Accommodation Deposit (RAD) of $670k.
Jane had taken the lead amongst her siblings in working out the most suitable approach, and needed a well reasoned approach to support decisions.
This is what we outlined to Jane:
We showed her how to find clear pricing, quality and compliance information specific to the aged care facility she had suggested. This is public information available via a government website.
We outlined her choices in paying the Refundable Accommodation Payment, and highlighted that payment of the RAD was favourable to retaining the full age pension.
We clarified her mother’s age pension outcome when moving into aged care via Services Australia information, showing the new asset test limits for someone who has sold their home to move into care.
We made an estimate of the annual cashflows, including the Basic Daily Fee, and the Means Tested Care Fee, noting that the cashflow shortfall, when taking into account her mothers eligibility for the age pension, would be easily supported by savings left over once the Refundable Accommodation Deposit had been paid.
We showed what the cashflows would look like if the family decided to retain the home, and also if the home was rented out for market rent.
We were also able to clarify some ideas from the family. - like the idea to pay the RAD from a family member that had savings available to do so.
The outcome
By organising the publicly available information into a concise format, and taking focus away from information not relevant to her mother’s situation, we saved many hours of internet searching and discovery.
We were also available to clarify the impact of various scenarios proposed by the family members - creating a clear basis for unified decision making.
Helpful links
The challenge with working out aged care cashflows - is that there are many moving parts, thresholds, exceptions and calculations.
Our role is to efficiently make these calculations, and present the overall impact.
Here are some of the resources we use.
My Aged Care is the government website that importantly has a search function for facilities, and a basic calculator. The income and assets checklist is a useful start, but is ambiguous when detailing the testing of superannuation income.
In the move to residential aged care, the payment of the RAD, sale of the house and other financial decisions will have an impact on the age pension. In this case, thresholds for income and assets test are useful:
The Department of Health and Aged Care publishes a schedule of fees and charges and thresholds that is updated quarterly.
This is probably the best overall resource for clarifying specific issues around aged care financial.
If you want to find out more about our expertise in dealing with retired Australians, please call.
Brendan
Brendan Ryan CFP
0412 181 031
Not sure what your next move should be?
Why not start with a phone call?
I am always keen to hear people’s stories and find ways to help.
Brendan Ryan CFP
All of my clients have unique situations, but they mostly want the same thing - to get good value and security from the big companies that help them manage their savings, to make sure they get all they are entitled to from the government, and to have confidence in their plans.
More than 25 years experience in finance, and a deep understanding of retirement and government puts me in a strong position to help you get confident you are doing the right thing, and organised in your approach.
Call me on 0412 181 031 or send me an email.
Brendan Ryan CFP