Getting old is one thing that those of us lucky enough will need to deal with.
One of the more challenging and complex areas to deal with is aged care.
Planning for aged care, although includes structuring assets so as to minimise the costs associated with aged care, needs to include being aware and understanding as best as possible what the costs associated with aged care are.
With awareness and preplanning you can maintain control over the process, have access to the financial resources to pay for care and avoid nasty shocks which can occur.
Families are often reluctant to talk about aged care and its implications both financially and emotionally. The result is action is only taken when a crisis arises. This leads to limitations being placed on time needed to evaluate options and a sub optimal decision may be made, resulting in family arguments and conflicts at a time when clear thinking is required.
What to do:
Depending on the family member’s financial assets and income, the level and range of fees payable can be surprisingly high.
Planning early on can help you focus on how to fund the fees to provide you with the best support – this may not necessarily be the cheapest option available.
With the help of the My Aged Care website and/or the assistance of a specialist adviser gain an understanding of the range of fees, including:
Further there are daily accommodation payments which generally comprise two parts:
Therefore financial provision needs to be made not only for the refundable deposit bond but also for both the basic daily fee and the daily means tested fee.
However, any luxury, lifestyle and other additional items will need to be paid for by the resident on a user pays basis. This would extend to pharmaceutical, medical and other services such as hairdressing, clothing and treats.
In many organisations, only a bed and chest of drawers etc are provided. You may also need to purchase an appropriate chair, television and other items to provide the lifestyle that is desired.
Therefore, cost of these items need to be provided for as well.
Accommodation costs are published on the My Aged Care website.
If assets and income can be reduced enough to become a low means resident before the move, the government may subsidise the accommodation and regulate what the residents contribution is.
This may reduce the accommodation cost but may not always be the best result for the resident. Choice and control of accommodation may well be lost. As a result, the resident may not be offered a position at their place of choice, but rather a place many kilometres from “home”. This may result in unhappiness, distress and depression.
Many accommodation places have places “reserved” for high fee paying residents such that having the funds and paying the price results in the accommodation of choice being offered, with a much better result emotionally for the resident. Don’t forget this as it is more valuable that the resident is happy than money saved!
Dementia is a leading cause for the need for aged care services. It is very important for Wills to be reviewed and updated as necessary and appropriate Powers of Attorney executed whilst the resident has legal capacity.
Once legal capacity is lost, a Will cannot be renewed or amended. Further, it will be necessary to go to the Guardianship Tribunal to set up Powers of Attorney in these circumstances.
In conclusion, careful planning will ensure that the transition to aged care will be a relatively smooth and stress free process.