What do you do if you discover that one or more of your parents are not coping quite as well at home as you would like? The sad reality of growing old is that many of us become compromised, leaving family and friends concerned for our ability to care for ourselves and those we live with.
Who makes the decision to look into aged care? How do you know what you are looking for when it comes to aged care? How do you know if your family can afford aged care? What government assistance is there for aged care? Where do you even start?
In many cases, these questions are only addressed when the need for aged care arises – and sometimes when the need arises – it is an immediate need. For instance, a parent or loved one may have a fall and hospitals deem them unfit to return home. A family member may pass away suddenly, or dementia comes on rapidly. Sometimes we don’t have a whole lot of time to think, to weigh up options or to plan. When faced with this situation – what do you do?
The first step in planning for aged care is to listen. Listen to all the invested parties, the people who are requiring more care, the family that love them, all the people that can be impacted by the decision. Sometimes these conversations are hard for families. That is where people like AFAN’s Paul Geisel comes in.
AFAN’s co-founder Paul Geisel is an Aged Care specialist advisor. His job is to help families and clients who find themselves in this very common scenario. “People generally only deal with the issue of aged care when it is crucial. When families are in the thick of it and decisions need to be made swiftly,” says Paul. “When I am engaged by a client or family, my first task is to listen to the stories. What do they think? What do they want? What are their needs? What help is available?”
Australia is the lucky country. Whilst stories of poor-quality aged care make for good media stories, in general, Australia is very good at looking after our elderly, providing a range of options for dignified aged care living. You are lucky if you get to grow old in Australia. The important thing is to know what your options are when it comes to aged care.
Paul Geisel advises that the first step is to look at the government resource My Aged Care. Here you will find an overview of how the aged care system works. The next step is to engage an aged care professional. You can find them via the My Aged Care website or via your financial advisor network.
Engaging an expert aged care advisor can take some of the emotion out of what is a highly emotional time. Someone with a clear overview of what the options for aged care are, what they cost, what help is available and what impact it has on your or your family’s finances.
The next necessary step is to get an ACAT assessment. Basically, a ACAT assessment is the government’s determination of what level of care you require. In Australia there is a mixture of state run and commercial aged care facilities and amenities. Understanding what level of care you require is the starting point and so you and your family can assess the options:
- At home assistance
- Over 50’s lifestyle or retirement villages
- Residential aged care with 24/7 medical care
Most people who require aged care in Australia are lucky enough to be living in their own home. Australia operates a means-tested approach to aged care. What assets you have, and your financial position affect the level of government subsidy you are eligible for and the level of fees you will be required to pay. It can be a complicated process for families especially when acting in haste. A professional aged care advisor understands the fees you are likely to be faced with depending on the options you are looking at and your financial position. In addition, the aged care professional can handle it all for you – the negotiating and liaising with the aged care facilities and the government agencies such as Centrelink. Paul Geisel has been known to even handle the transport to an aged care facility for the family.
When entering aged care facilities there are generally four fees you are likely to have to pay:
- A lump sum accommodation deposit. This averages out between $350,000 - $750,000.
- A basic daily fee, which is a percentage of pension that will be deducted to cover daily care.
- Means-tested care with annual and lifetime caps.
- Additional service fees – these are the ‘luxuries’ or added extras at many residential homes and range from activities to hair-dressers. They are the add-ons that are determined by the individual facility and these are an excellent thing to get your aged care advisor to negotiate on you or your family’s behalf.
A professional aged care advisor can work with your financial advisors, your family lawyers and accountants to ensure that, if there is a change of circumstance, there are no nasty surprises.
While this sounds obvious, in many cases the best of intentions can result in unnecessary economic hardship. A will for example, leaving the assets to the life partner is fine until one of the two wind up in government-subsidized aged care and the other one passes away unexpectedly first. When re-assessed, the surviving partner may find themselves with significantly higher fees to pay. A situation that could be avoided with full consultation of the financial and legal team and a small adjustment to wills to leave assets to children or the next generation. Your aged care professional will also liaise with parties to ensure Duty of Care and Power of Attorney are in place and practical for any change of circumstance.
As with every major financial decision, having people on the same page, engaging in transparent conversations and listening is key. There’s help out there!