Entering Aged Care/Nursing home? – Here are 3 Costly Mistakes…

Mistake 1: Thinks they’ve graduated after visiting myagedcare.gov.au

When researching about aged care fees, visiting myagedcare.gov.au is a very good start and everyone should do it. There is even an online Residential Aged Care Fees Estimator for you to try out. However, the mayagedcare is silent on available concessions that may reduce your aged care fees and enhance Centrelink/DVA pension.

Although the aged care calculator shows you how much is the Basic Daily Fee and estimated Means-tested care fee and Accommodation Contribution, you have to work out manually how accommodation payment affect your cash flow. In addition, there are also other ongoing costs like Extra/Additional services and out-of-pocket expenses.

There is also a risk of mistake when completing the income and assets checklist, especially if you own income and/or assets with existing concessions – like certain types of Allocated Pension and/or Annuity. From years of experience, we have seen avoidable mistakes leading to unintended consequences – which may lead to forced-sale of the family home.

Solution:

Check if any asset and income you own has exiting concessions attached for Centrelink/DVA income and asset test purposes. In addition, also check if your pension is reasonable. Not sure how to do that? We can help, click here. Thanks for reading. We’ve prepared a free gift for you. It’s located after mistake number 3.

Entering Aged Care/Nursing home? - Here are 3 Costly Mistakes...

Mistake 2: Quickly pick an accommodation payment method, don't miss out

Unfortunately, most people procrastinate thinking about health and ageing matters until it becomes an unavoidable event. In some cases, the aged care home entry comes after a hospital admission and told by a healthcare staff that they will not be allowed to return home based on personal safety concerns. Families are often suddenly thrown into a pressured decision-making process to secure a bed at a facility they want, often without understanding the complexity and impacts of such a decision. A decision involving aged care accommodation payment costing hundreds of thousands of dollars – enough to buy an apartment in the city – and there’s only just up-to 28 days to decide if it’s best to pay

1) a lump sum (Refundable Accommodation Deposit – RAD or Refundable Accommodation Contribution – RAC), or
2) by daily charges (Daily Accommodation Payment – DAP or Daily Accommodation Contribution – DAC), or
3) a combination of both methods (RAD+DAP or RAC+DAC).

Some worry that leaving too much cash can reduce their future pension while leaving too little may lead to having not enough cash, the main issue here is you can’t withdraw from paid lump sums until you exit. Importantly, there is no one best payment option that fits everyone.
What’s worse is no one tells you that there are actually 4 methods of payments, and this 4th method make or break many situations but is not public knowledge.

Solution:

Understand the 4 aged care fees, check which variable ones you can reduce further. Make sure you review the cash flow numbers in detail with a personal budget. Make sure you are including all aged care fees. If you’re not sure how to do this, we can help click here. Thanks for reading. we’ve prepared a free gift for you. It’s located after mistake number 3.

Mistake 3: Act on Hearsay – just follow what Aunt May did last year, we'll be alright

We all love tips to pay less money, so why not do it when entering an aged care home…? Your aged care fees is one of those affected by income and asset test rules and these rules have been changing with almost every federal budget announcement since 2014. The aged care concessions that benefited Aunt May when she entered aged care home last year may no longer be valid now.

In fact, the aged care income and asset test rules that affect aged care fees calculation are different to the rules used in pension calculations. Aged Care fee rules include more income and assets than the pension rules. However, they are related. Their relationship is like the two opposite ends of a see-saw, more pension leads to less means-tested care fees and vice versa! You need to know what concessions are available, to avoid unintended negative financial consequences.

Solution:

Spend more time researching concessions (if you can find them) and making sure they are not those expired ones. Or have a tutorial session with an aged care specialist. Tutorials are a great way information is passed on from one party to another. Only experienced specialists have the knowledge and experience to answer your questions on the spot or point you the right direction because they deal with aged care rules regularly enough. Non-specialists may think they know the issues, but since no one goes to their family GP for a heart surgery, do you want to risk it? Plus, a tutorial session paid by the hour is generally more affordable because there is no personal advice, just fee facts and guidance on existing rules that may affect you now. Clarify your situation to avoid unintended financial outcome. Book your tutorial session, click here. Thanks for reading. we’ve prepared a free gift for you. It’s located in the next section.

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