Aged Care Accommodation—Choices for the Elderly
This is a test. ccording to the Australian Bureau of Statistics, over the next 40 years Australia’s population over the age of 65 is expected to grow to more than 23% of the population – a proportional increase of 80%. Demand for aged care accommodation will grow accordingly
Entering aged care can be a daunting process requiring significant personal adjustment and an understanding of complex fee structures based on income and asset assessment.
At Home Help
For many, the familiarity and stability of the family home makes it the preferred option. Home Care Packages are available to assist people to stay in their home and provide a range of services such as personal care, home maintenance, transport and health support. These services can help prevent a premature move into Aged Care accommodation.
Granny Flat Interests
A granny flat interest involves the transfer of property or cash in exchange for the right to accommodation for life. It is usually a family arrangement to provide company, nearby help and support for an elderly relative. There are potential costs such as stamp duty and capital gains tax associated with transferring assets.
Retirement villages are purpose built accommodation for those over age 55. Units are either purchased or occupied under a lease or other form of agreement. An entry contribution is paid to secure an individual’s place in a retirement village and the form of the entry contribution depends on the legal structure of the village. A departure fee is payable on leaving the retirement village, which is usually a percentage of the entry or resale price.
Aged Care Accommodation
Eventually health or mobility issues can mean that remaining at home or moving to a retirement village is not possible or desirable. Approval to move into Aged Care and determining the appropriate level of care is provided through an Aged Care Assessment Service (ACAS). Referral to ACAS can be through a range of avenues such as a GP, nurse at a hospital or social worker.
The responsibility to research an aged care facility and clarify relevant issues such as the ratio of staff to residents, rules for visitors and whether palliative care is provided, tends to rest with the applicant’s children, relatives or friends.
Aged Care Costs
The Australian Governments Aged Care reforms commenced on 1 July 2014 and removed the distinction between high and low level care, which removes the link this had to the type of accommodation payment required.
to the reforms is the adoption of a ‘means tested amount’ which is
calculated using both assessable assets and assessable income and is
used to determine both entry fees and ongoing fees. This is a change
from pre 1-July rules where only assessable assets were used to
determine the accommodation payment and only assessable income was used
to determine any income tested fee payable in addition to a basic daily
care fee. The former home will be included in the calculation of the
means tested amount although exemptions can continue to apply, and the
home value is capped.
regarding the family home can impact on Age Pension or Department of
Veterans’ Affairs benefits and aged care accommodation fees. Decisions
relating to the family home are often not based purely on financial
grounds and in many cases, there can be a strong emotional attachment
to the family home.
Aged Care system has undergone significant change and it is clear that
the need to seek financial advice is now further reinforced. Strategies
such as investing in a lifetime annuity still have the potential to
reduce fees and issues around the former home continue to be complex.