Financial planning for aged care

The financial challenges that come with aged care can catch families off guard. This article explores key aspects of aged care and the importance of effective and specific financial planning to enable aged care choices.

As our loved ones age, ensuring their financial security and wellbeing becomes increasingly important. With life expectancy on the rise, many families find themselves faced with the reality of caring for aging relatives. However, the financial challenges that come with aging can often catch families off guard. From healthcare expenses to long-term care costs, planning is crucial to ensure our elderly relatives can maintain their quality of life without undue financial strain on themselves or their caregivers.

Understanding the aged care landscape

As individuals grow older, they often encounter increased healthcare needs, including medical treatments, prescription medications, and specialised care services. Additionally, many seniors may require assistance with daily activities, such as meal preparation, mobility assistance, and personal hygiene, which can further contribute to expenses.

There are a few different options available based on the health, support available from family and preferences of the individual. These are:

  • In-home care – getting additional support to enable the elderly to stay in their own home.
  • Short-term respite care – in an aged care facility, but on a short-term basis.
  • Residential aged care – permanent facilities with a range of services and levels to enable residents to have the right level of care they need.

These options have different financial implications for the individual and their family which need to be considered and planned for.

Step one – Get an Australian Government Aged Care Assessment

The first step to access government-funded aged care services is to get an assessment through the Australian Government organisation – My Aged Care. This is assessment is available throughout Australia. In Victoria it is provided by the Victorian Department of Health, My Aged Care assessment services (ACAS). Assessments are used to evaluate the care needs of individuals and determine their eligibility to access government subsidised aged care services. Once assessed individual have options to decide from different type of care available.

In-home care

Most people prefer to live independently in their own homes as long as possible depending on the support available from family. The Government provides support to people aged 65 and over who wish to remain in their homes through the “Commonwealth Home Support Program”. Once individuals are assessed, they can obtain different levels of support at their home. Seniors who wish to stay at home may need to modify their homes. However, these services are not fully funded by the government, and depending on income and assets, seniors need to contribute to access the support. Individuals will need to consider addressing the cost of home-care packages and additional private care. Home-care packages do not provide around-the-clock care.

Short-term respite care

Respite care offers caregivers a temporary break from their caring duties while ensuring that those they care for receive support. It can be as short as a few hours or as long as several weeks, allowing caregivers to rest or tend to emergencies. There are different types of respite care available, including in-home assistance, day centre programs, transitional care after hospital stays, and short stays in residential facilities. The cost of respite care will depend on the type of respite care received.

Long-term aged care accommodation

Aged care homes are available for older people when they can no longer live at home and need help living safely, healthily, and comfortably. Residents need to buy a room in the facility and pay ongoing fees. A refundable accommodation deposit (RAD) is the lump-sum payment for a room in an aged care home. The price is for residents who are not eligible for Australian Government assistance. The amount paid to buy a place in the facility varies based on their location, demand, and type of care provided. All facilities are required to publish their price. The RAD can be paid as a lump sum, an equivalent daily accommodation payment (DAP), or an equivalent combination of both. Other ongoing costs involve a basic daily fee and a means-tested care fee, which varies depending on an income and assets assessment.

How an aged care accredited financial advisor can help

An aged care accredited financial advisor is a financial planner with specialist accreditation to provide advice in assessing the current financial situation of individuals or families and crafting a comprehensive plan tailored to their specific needs and goals. By consulting with an aged care accredited financial advisor, individuals can explore investment strategies and retirement planning options to ensure adequate financial resources for future care needs. They also assist in navigating the costs associated with aged care, including government subsidies, accommodation payments, and ongoing fees, ensuring that individuals make informed financial decisions. Through proactive financial planning, individuals can safeguard their financial wellbeing and ensure a more comfortable future for themselves or their loved ones.

As the population ages, the financial implications of aged care become increasingly relevant. By understanding the options available and implementing proactive financial preparations, individuals can navigate the complexities of aging with confidence and security. Strategic financial planning by an accredited advisor is key to achieving peace of mind and financial stability in the golden years. With the right guidance, individuals can effectively plan for the future and ensure a comfortable and secure retirement.

Do you or a family member need assistance with accessing aged care services or navigating the complexities of funding aged care living? Talk to your Bentleys contact and connect with an accredited aged care financial advisor.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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