A changing time of life
Australia's population is aging. We have some of the world's best aged care facilities and the variety and choice is growing rapidly. However, the issues associated with transitioning to aged care are complex. Simply trying to choose the right arrangements, facilities and surroundings is complicated enough without the added stress of trying to understand the financial arrangements and legal issues.
Where to start?
You need to begin by looking at your short and long term needs. The lifestyle you wish to lead together with potentially changing circumstances in the future will determine what level of independence will be important. Some of your options will include:
detached residence (Granny flat) at a relative's property
Note that an ACAT (Aged Care Assessment Team) assessment will be required to obtain access to a hostel or nursing home.
Of course there will be lots of factors that need to be considered that will help you in your decision such as:
proximity to family and friends
visitor and privacy arrangements
availability of palliative and high level care
additional services and associated costs
Now... Saward Dawson can help
Once you have decided what you want to do there are so many other things to consider. That is where Saward Dawson can really help. In fact, some of the things we can you with may have a bearing on those initial questions.
By understanding fee structures and how they are calculated, we may be able to save you thousands of dollars every year. We have the knowledge and the modelling tools to assist you in finding the best financial outcome.
Each accommodation option has different costs and ongoing fees. Sometimes a standard fee applies whereas others fees can be based on the value of your assets and/or your income. Saward Dawson can help you to understand the fee structures and options. And importantly, we can help you to organise things so that you can gain the most financial advantage.
Depending on whether you decide on a retirement village, nursing home etc. various combinations of the following may apply:
An initial entry fee may be required
An initial bond may be required based on the value of your assets at your time of entry.
Daily accommodation and care fees may apply
Ongoing fees may include entertainment, meals, maintenance and other facilities.
A portion of your fees may be based on an income test
Significant exit fees may apply based on the value of your unit or apartment.
Balancing assets, fees and Centrelink payments
In many cases, selling the family home is the most logical option as you move into the next phase of your life. However, there are lots of things to consider.
When entering a hostel or nursing home, your family home is regarded as an asset and its value may be relevant to determining your initial bond. However if your spouse or carer is still in residence, this has implications.
Your home needs to be factored into Centrelink calculations.
There is much to be considered. Making the right decision and getting the balance right between your assets, fees and the aged pension can be quite advantageous financially.
Where accommodation bonds apply, it may be to your advantage to pay a larger bond, reducing your personal assets and altering the basis on which your Centrelink payments are calculated. Saward Dawson can look at the various options, helping you to create worthwhile savings over the long term.
Reducing your income tested fee
As is common for many aged care facilities, a significant component of on-going fees may be based on your income. In some cases, this can be significantly reduced by structuring your financial affairs appropriately. We may be able to suggest income friendly investments or, if appropriate, insurance bonds via a private trust.
These are complex issues but they are definitely worth investigating. The savings can run into several thousand dollars each year.
A will and arranging a Power of Attorney are particularly important. There are several types of Power of Attorney that may need to be considered. Of course your will is a very important document that protects the assets that you have worked very hard to accumulate.
In each case, legal advice will be required but we will be very happy to ensure that these critical processes are completed.