Things to consider when preparing finances for aged care

With Australia’s ageing population the need for aged care has never been greater, and with our growing population, demand will only increase.

This demand, combined with recent reforms to the aged care sector, has led to a surge in requests for advice on aged care and how to fund it.

Many of these enquiries are coming from clients who want to be actively involved in preparing for their future care needs.

However, clients are also often talking to us about the needs of their parents, either in preparation for the day when they will need care, or when faced with an urgent need to place them in aged care following a rapid decline in their health.

Here are a few things to consider when preparing your finances for aged care:

Complex issues

The issues to be addressed are complex.

We are in the middle of a 10-year implementation period of a range of aged care reforms so it’s an evolving environment.

Among other things, the reforms mean that aged care residents may pay more for their care.

On the other hand, they now have more choice when it comes to how those costs are paid.

This complexity means that there’s no ‘one size fits all’ solution when it comes to aged care. The best approach depends very much on personal circumstances.

Common concerns

Naturally, this complexity raises a number of major concerns for anyone looking at aged care. These include:

• What upfront costs will you need to pay?
• Will any of these costs be refunded?
• How much will you pay for ongoing care? Will you be able to afford it?
• Can you keep your home? Or is it better to sell it?
• How can you maximize your Centrelink or DVA entitlements?
• Will there be anything left to leave to their family?
• How much tax will you have to pay?

Planning ahead

Even if you or your relatives don’t need aged care yet, it’s worth taking the time to research the basics of the system.

A good place to start is www.myagedcare.gov.au.

However, when the need for care becomes imminent, specific, tailored advice is invaluable.

Professional advice can help with establishing a sustainable cash flow, maximizing age pension entitlements, reducing ongoing care fees and preparing for intergenerational wealth transfer.

Whether it’s for yourself or a relative, when it’s time for aged care it’s time to talk to one of LDB’s experienced financial planners.

To get the ball rolling call us on (03) 9875 2900 or fill out the contact form below.