Whether it is for a parent, partner or other loved one, making decisions around aged care can be a highly emotional time. Here are our tips for managing the preparations.
#1 If you haven’t organised power of attorney, act as soon as possible
This is the first step to making a move to aged care, particularly where there is an impairment that affects the person’s decision-making capability. A person can only assign power of attorney where they are deemed in a mental state to do so, so it’s critical to address this as early as possible. You will need a lawyer to do this for you, and your Apt Adviser can also point you in the right direction to identify a qualified professional from our network.
#2 Get the family together early
In such an emotionally charged time, it’s important to get the family together for an open discussion. Where there are multiple adult children making the decision, it’s likely that there will be differing opinions and views, so it’s important to get this out on the table early. At the end of the day, you all likely want the best outcomes for your loved one, so if you keep returning to this focus it can help to keep discussions on track.
This discussion should cover not only your wishes for your loved one’s care, but your individual roles within it. Conflict can often arise down the track if these roles are not openly discussed and agreed to.
Often, the loved one in question can’t participate in the discussion because of the impairment that is leading to the care, such as Dementia or Alzheimer’s. However, where the move is for physical impairment, it’s important to make sure they are included in the discussion and their voice is heard.
#3 Understand the available options
While the names and requirements can vary state-to-state, all states and territories have a required assessment that must be completed by a medical professional. Often referred to as an ACAT or ACAS, this assessment defines the level of care the person requires.
For some, home care packages that provide on-site care may be an appropriate first step, whereas for others a residential facility will be necessary. Knowing the available options for your loved one will help you have more detailed discussions with everyone involved.
If a family member decides to take on full-time care arrangements, make sure you explore respite care arrangements, as it can be emotionally and physically difficult. In many cases, you will be entitled to a number of days of care with government support.
#4 Explore care facilities
When it comes to choosing a residential facility, there are many aspects to consider. What care options do you want for your loved one? Where should the care be situated? In many cases, it makes sense for the care facility to be close to those who will be taking the biggest caregiver role, but in others, the individual may want to stay in their home area, near friends and what they know.
Subject to local COVID restrictions, most facilities allow you to visit, and it’s worth viewing a number of properties to get a sense of the care provided, additional features and general environment.
It’s also worth talking to a placement agent, who can guide you through your options, current vacancies, and the application process to secure a place at a facility that suits you and your loved one.
#5 Navigate the financial arrangements
Aged care is expensive, but there are options when it comes to how you fund it. Typically, there are two separate costs involved:
- The Residential Accommodation Deposit (RAD) – this is essentially a payment for the physical room and bed and can be up to $550k, or even more if the facility has government approval to exceed this amount. It is refundable when the room is vacated less any deductions you have agreed to.
- Ongoing Care Costs – this is a regular weekly or monthly payment to cover the basic costs of care and applies to all residents. The facility may also offer options to pay for additional optional care and comfort features.
These are typically means-tested, and some may have to pay more than others.
The RAD is a significant amount, but there are several ways to pay. You can pay all of it upfront, make partial payment or pay nothing. If you choose the latter two options, the remaining costs are rolled into significantly higher ongoing payments.
The best option for your really depends on a number of factors and your personal circumstances, so there is no “right” answer. Commonly, families consider selling the family home to cover the cost of care, and while this is sometimes the best option – it’s not always. Selling the family home can add significant means that may have an impact on other government entitlements, like the pension.
There are other options, such as renting out the property and funding the care via rental income, however these are not without ongoing maintenance and property management costs and some administrative burden for family members.
This is where advice is critical. Your Apt Adviser can help you navigate your options to understand how you will fund the care and the best payment option for you.
In some cases, some or all of the family members may agree to contribute funds towards the RAD as a lump sum. While this is a nice idea, it’s important to note that in most cases, regardless of who pays, the balance of the RAD will be refunded to your loved one’s estate, not the individuals who paid it. This means it will be divided as per your loved one’s estate plan, so if you are going to do this, it’s important to get legal advice to make sure you manage this in the best way.
At the end of the day, we all want the best possible care for our loved ones, but the aged care system can be hard to navigate – particularly when it comes to financing care. If you are considering care options for a loved one, get in touch with Apt Wealth Partners to find out how we can help you navigate the maze.
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 and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommend that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.
