Aged care: Planning can make all the difference

An emotive topic, aged care is something that most of us will need to consider in our lifetime. As our parents and grandparents reach an age where living without care becomes difficult, it can bring up a range of questions and challenges to consider.

Aged care in Australia

There are approx. 3.7m Australians aged 65 or older. Aged care services cover a range of areas, depending on the required level of support needed. As we face a rapidly ageing population in Australia, the growth in the aged care industry will be high on the agenda for our politicians and policymakers.

It’s been a difficult time for the aged care industry. The recent commencement of a Royal Commission into Aged Care has uncovered practices that have brought shame on to some industry participants and have outraged many Australians. I am sure that through the process any failings in the system will be put under the microscope and changes made for the better for those involved.

Aged care is already a topic that people approach with trepidation. It can be difficult to consider placing a loved one in care, and looking at the available options can be confusing and make an already stressful situation even harder to bear.

Before looking at the financial aspects, there are many points to consider. There’s plenty of research material available, but here are a few tips I can provide:

Do your research

It might seem an obvious one, but with so many options available, understanding the different facilities is important. In working with my clients, I see looking at the facility, the range of services they provide, and online reviews as a good starting point. It can also be good to look at additional services that go beyond the obvious care options, for example, the different extra activities and services the facility organises for residents, as these can make a real difference between the various providers.

Think about location

Ensuring that you can spend time with your loved ones is important. To that end, choose a location that is close to you and other family members. Placing a loved one in a facility that’s difficult to reach ultimately means that the family member in care can feel cut off and isolated.

Get a ‘feel’ for the facility

By this I mean: Trust your instincts. For example, in thinking about your loved one, does it feel that the facility will be a good ‘fit’ for your family member? Do you feel that the types of activities would interest them? Having a good feel as to whether your family member will have the appropriate standard of living is important.

Understanding the financial aspects

This can be a relatively complex conversation as there are many aspects to consider when looking at how to fund aged care. Planning this component can have a very real long-term benefit, both for the family member involved and the extended family.

1. Understand what’s affordable

Understanding the different aged care options can be a minefield to navigate. While government funding exists, the reality is that you are most likely going to need to fund this from income and assets.

With a range of options available, varying greatly in both price and service, it’s important to understand what’s financially viable upfront.

2. Work through your funding options

Once you’ve understood what you can afford, the next step is to understand the options available to fund that choice.

For most, the first option is to explain what to do with the home of the family member in question. This can be tricky, as you need to consider whether selling this now and using the proceeds of the sale to fund aged care is the best course of action. Often there are other investments and assets that may also be sold. There are also a number of tax implications that can impact your decision.

Given that factors such as inheritance come into play, it’s worth looking at all the options early on in the process.

3. Understand the payment model

There are some specific costs that apply to aged care that you need to consider. For example, there are often a number of upfront costs that an aged care provider will require you to pay. This can seem daunting; however, there are funding options available to you that mean you do not need to pay this all upfront.

This is where the benefit of talking to a financial expert comes in. With the complexity and options available, it’s worth considering professional advice to ensure you make the right decisions for your loved ones.

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL 436121 ABN 49 159 583 847) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.