Aged Care : Recent client stories
Key Points
We think reading endless examples of people working out how they are going to pay for aged care is not a great use of time when people with a lot on their mind.
Why would you want to learn more about a situation that is sort of like yours, but not close enough that you can actually get some practical help?
We don’t get it, but if you want to hear examples of the stories we hear (and solve), we are happy to help because we love this job, because we get to take our skills and solve complexity at a time of high stress and anxiety and it feels good to do this. And we have the knowledge to do it quickly.
We saved this family $46k per year
This is an example of an enquiry that comes after someone has already gone into full time residential aged care - probably based on a niggling concern things could have been organised better at the time and a check-in to see if anything can be done.
This client's mum went into aged care last year and decided not to fund the lump sum for the room (known as a Refundable Accomodation Deposit or RAD). At the time, mum was not eligible for an age pension.
A few months later and mum's savings have run right down with aged care costs - so much so that she is now eligible for an age pension of $7k per year. She just needs to apply for it.
The next step was to pay the RAD - which is like reducing a loan with an interest rate of 8.38%, using money that was sitting in a low interest bank account. The result was to save $37k per year in interest costs. The RAD can be paid down anytime the resident wants to do so.
The kicker in all of this is that the money used to pay the lump sum RAD is not assessable for the age pension test, meaning she would now qualify for the full rate of age pension of $29k per year.
I don't calculate the full saving as the eligibility for maximum rate pension of $29k pa, and the reduction in accomodation costs of $37k (i.e 66k), because she does lose the chance to generate (taxable) income on the funds paid to the RAD - which would be about $20k using RBA cash rates.
All of this is much easier to understand with it mapped out on a spreadsheet - something I have been doing for more than 20 years. Let me know if you want a closer look at this one.
There can be plenty to look at after someone has gone into care - a partner at home may pre-decease the resident, there are changes in how property is treated for means tests after specific time periods, and sometimes people live way longer than planned.
Mum chose an aged care bed for dad in a place miles away, because she thought she couldn't afford the place at the end of her street.
The price is not the price in aged care, and sometimes a place can seem unaffordable when it is not, or a place may look cheap and the converse applies. The point is to know the rules so you make the right decision.
I loved working with this family, in the zoom call the 2 sons got right amongst the numbers to convince mum the local option was feasible, that she would have plenty of cashflow to live on, and by having dad in walking distance they would all be happier.
I would say this is the classic case of something happening in a hurry, huge disruption as the whole family mobilises to try and make the best decision, and the satisfaction (especially for me) of knowing a decision has been made with confidence.
Dealing with the NSW Trustee and Guardian
This client did not have a constructive relationship with another family member and needed to deal with NSW Trustee and Guardian to propose a course of action for mums care and property.
The prevailing setup was very inefficient - straightforward changes were going to save a lot of money, however formal modelling and advice was required to get it moving.
We loved crunching the numbers, preparing them in a concise way (like we have done for more than 20 years), and being ready to stand behind good advice that is going to save this family tens of thousands of dollars
Daughter gets a strange Government letter 9 months after mum gone into care - more fees to be charged
Mum has been in care since July 2023, everything seems stable (cost wise), then a letter arrives detailing a new fee of $165 to be charged per day for the cost of care (that works out to be $60k extra per year).
A letter so confusing, in so many ways. Also a product of congestion at Centrelink, meaning lags in information. The client calls Centrelink on the number provided - huge delays, no clear answers.
Because we had worked with the client early in the process, we knew the numbers and the next steps to get this sorted without endless waiting at Centrelink.
We had previously estimated the client would be subject to a Means Tested Care Fee cap of c$22k, which had so far not been charged at all.
Mum wants assurance she won’t lose the age pension
This is pretty common. Mum already in an aged care bed, home sold and awaiting settlement, RAD yet to be paid. We were able to clarify age pension amount based on new asset mix, and confirm that mum now qualifies as a "non-home owner for Centrelink". Cashflows laid out, no surprises coming.
Get help when you need it
We offer a fast and reliable service to help you get to the bottom of aged care costs at a difficult time.
We bring more than 20 years of experience to help you understand all your financial options when moving a loved one to residential aged care.
We are here to assist if you need us on (02) 9173 8560.
Brendan
*We have simplified, rounded and generally streamlined the rules to make our charts and tables work. We hope this helps you get a better understanding of how you sit within the system. There are a few quirks we may have skimmed over for simplicity - as there always are with government rules and systems - the objective is to call you to action to get to the bottom of your story.
Paying for care?
Do you want someone to work with you to solve the confusion around the costs of aged care homes?
Make sure you are getting all you are entitled to, and that care costs can be easily supported with our help.
Brendan Ryan CFP
We have been working with clients solving the complexity of aged care costs for more than 20 years.
In this time we have learnt that downloading guides, trawling through government websites and reading endless news articles only confuses people at a time when they need absolute clarity.
Let us help you get clear on your situation and ways to maximise government support.
Call me on (02) 9173 8560 or send me an email.
Brendan Ryan CFP