People aged 65 and over are our nation's fastest growing age group, with one million Australians already receiving Aged Care - a figure set to soar to 3.5 million over the next 40 years. With recent changes to the Aged Care system, early preparation and sound financial advice has never been more important in managing Aged Care with confidence.
The value of financial advice
Major decisions need to be made during the transition to Aged Care, and many of them can involve greater costs and tax implications than you may expect. In an already difficult time for all those involved, you don't need to go it alone. Your FMD adviser can guide you and your family through the process and provide an objective analysis of the placement and financial options available - providing you with ongoing support during and after an often confusing time.
How your FMD adviser can help you navigate the Aged Care maze
Explain the fees that are involved and how they can be funded
The below table outlines what payments are required, how they are determined and who they apply to:
Review your cash flow
Do you have enough money to support your Aged Care needs? How much money will you need to ensure you're adequately looked after? Are you eligible for government support in your current position? These are valid questions to consider when entering Aged Care, and areas that need to be established before you make the move. Your FMD adviser will determine your personal tax structure and how to minimise your overall costs and maximise your entitlements.
Keep or sell the family home?
Although it may seem like a quick cash option, selling your home may have a negative impact on your Aged Care fees and Centrelink benefits, such as your eligibility for the Age Pension. Your family home will need to be assessed under Centrelink Means Testing, and your FMD adviser can walk you through the sell, rent or retain options and ramifications of your (likely) largest asset.
Make sense of Aged Care Services
When you first consider Aged Care, you will need to undergo an Aged Care Assessment (ACAT/ACAS), to determine the level of care you require. Once this happens, you are ready to find the right Aged Care Residential Placement for you. Deciding this requires a pro-active assessment of the Aged Care accommodation best suited to you. FMD partner with Millennium Aged Care Placement Consultants who take into account your needs and wants, your unique lifestyle and your financial position. Types of Aged Care accommodation range from retirement living; supported home stay care services; and Residential Aged Care.
Introduce smart strategies to improve outcomes
Your FMD adviser can also manage your investment strategy, investing funds into term deposits/direct shares/managed funds to fund the aged care fees. The option of purchasing an annuity may have more attractive Means Testing Fee allowances.
Assist with Centrelink
The Centrelink Income and Assets tests applies to all Aged Care recipients, but how you approach the test requires careful consideration from your FMD adviser. Your choice of investments may help you to access or retain benefits, including the Commonwealth Seniors Health Care Card.
Review your Estate Planning
One of the major areas to consider during the Aged Care process is your Estate Planning. Your FMD adviser will take you through the importance of your Will, Beneficiaries, Enduring Powers of Attorney, Enduring Powers of Guardianship and Advanced Care Directives. We also partner with legal professionals to ensure you are looked after from all ends of the spectrum. Click here for more information on the importance of Estate Planning.
While Aged Care can be complex and dependent on your personal requirements, your FMD adviser can help you by:
- Important estate planning considerations, including Wills, Powers of Attorney and estate services
- Explaining Aged Care options and costs involved under the new rules, and how to minimise these costs and maximise entitlements
- Navigating Aged Care services
- Weighing up the implications of selling or keeping the family homes