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Aged Care - 7 min read
Most of us think about retirement from time to time. At the very least, you receive statements about your super and see your nest egg growing over time. But not too many of us think about aged care.
That all changes as people get older, however. More than 1.2 million Australians received aged care services during 2017–18, according to the Australian Institute of Health and Welfare. Of this group, 77 per cent received assistance in their home or other community-based settings.
There’s no guarantee that you will require aged care services during your lifetime, but chances are good that you or someone you love will need assistance toward the end of life. With this in mind, we’ve put together a simple guide to familiarise you with aged care.
Aged care is the support administered to older people in an aged care facility or their own home. It might include help with everyday living, medical care, accommodation and equipment like ramps, walking frames and wheelchairs. For those who can’t afford these services, government subsidies fill the gaps.
Everyone faces increased challenges as they get older, and aged care services seek to help older adults:
To accomplish these goals, older adults often need extra help, whether that’s assistance with household chores or more intensive medical care services.
People age differently, and they may need different support at different seasons of their lives. Aged care includes many types of support services:
Aged care isn’t a one-size-fits-all endeavor, and what works well during one phase of your life might not work so well in another. Fortunately, Australia offers several important types of aged care services.
Most older Australians stay in their homes and receive aged care services where they are. This option is perfect for people who want to maintain their social relationships with neighbours and enjoy the familiar environment.
If staying at home doesn’t seem ideal, moving into an aged care facility could be the answer. For people dealing with complex physical problems or dementia, aged care accommodations provide a safe haven.
When people face a short-term health crisis, accommodation in an after hospital or respite care facility can help them to recover quickly and return home where they’re comfortable.
Different types of organisations administer aged care services in Australia. That’s great news because you can find an organisation that suits your preferences and needs. Look for a service provider that offers the services and environment that best meets your needs:
Remember that organisations must apply to become approved providers to get government funding.
When it becomes evident that a loved one needs extra help, many people feel overwhelmed by the financial aspects of aged care. With a little background, however, you can understand aged care expenses and create a plan to cover them.
Aged care fees fall into four categories:
Set by the aged care facility, the accommodation deposit can be paid as a lump sum (Refundable Accommodation Deposit), a daily fee (Daily Accommodation Payment), or a combination of these two options. Facilities must publish their accommodation deposit rates on their websites and in other literature.
Once you start receiving daily care (either in your own home or a residential care centre), you’ll need to pay a daily fee. Like the Accommodation Payment, the Basic Daily Care Fee is paid by all aged care home residents at a fixed amount, regardless of their assets or income. This fee is indexed in March and September each year.
You may be asked to pay an income-tested fee (for care at home) or a means-tested fee (for care in a residential facility). The Australian government sets the amount that you must pay directly to your service provider; the same amount reduces the care subsidies paid to the provider.
Aged care facilities typically offer extra services in addition to primary daily care, and residents pay for these services on their own. Additional services might include podiatry, more menu options, more luxurious furnishings and regular newspaper delivery. The government does not regulate these services, and you enter a contract with your service provider to arrange for them.
With this information, you can estimate how much you’ll need to save to cover aged care. You’ll find as you research different facilities’ websites that there is a range of accommodation payment fees, and you can customise your aged care expenses to your budget by choosing a facility that best fits your needs and financial situation.
Our wealth advisers can help you to plan for aged care, whether you’re seeking immediate assistance for a loved one or planning for your own care later in life. We can look at your finances holistically and help you develop a plan that maximises your investments and minimises your tax burden.
To learn more, set up a consultation with one of our experienced wealth advisers. There’s no need to worry or take unnerving risks. Talk over your plan with an expert, and find the peace of mind you’re seeking.
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