Australia’s aged care system is changing: are you prepared?
With change on the horizon, early preparation and sound financial advice has never been more important to managing aged care with confidence.
From July 1, 2014, changes to the Residential Aged Care package will be implemented, affecting all new aged care residents – existing aged care residents will be grandfathered under the current rules. The most important changes are:
A single aged care assessment will replace low and high level assessments.
This means all residents will be subject to the same fee arrangement.
Current accommodation bond and charges will be replaced by accommodation payments.
Payments will be determined by the resident’s assessable income and assets, providing increased flexibility for new residents. Residential facilities will also have to disclose accommodation prices on their website and the Government’s new website www.myagedcare.gov.au making negotiation and planning easier.
A means-tested care fee (MTCF) will replace the existing income-tested fee.
The MTCF will be determined according to a resident’s assessable income and assets, subject to annual and lifetime caps.
The family home will be exempt from the MTCF if occupied by a protected person such as a spouse.
If the home is unoccupied, part of the property’s value will be counted (up to a capped amount) and upon sale, full proceeds will count towards the MTCF. Whether it is advantageous to keep or sell your home will depend on your individual situation, so make sure you seek professional advice.
Fees will depend on whether residential aged care is moved into before or after reforms take place.
As a result of including individual assets in fee calculations, ongoing care fees are likely to be higher. Fortunately, the impact of rising costs can be kept to a minimum with the right financial strategy. With reforms only one month away, now is the time to prepare for you and your loved ones’ aged care needs. Quality financial advice can help you reduce aged care costs, increase age pension entitlements and help you confidently navigate what is often an emotional and difficult transition.
Plan for Aged Care with confidence by putting your questions to our experienced team of advisers. Join us for an Aged Care Seminar Series, where you’ll find out how to:
- Prepare for a change in aged care rules on July 1, 2014
- Minimise costs and maximise entitlements
- Navigate the minefield of aged care services
General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977. Rev Invest Pty Ltd is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977.