They say there’s no place like home, but as we get older and begin facing health challenges, staying in our home can become increasingly difficult. The demands of caring for ourselves and maintaining our living environment can bring about both emotional and financial stress.
This is where thoughtful aged care planning becomes important. With the help of a financial adviser, you can start to make decisions that support your personal needs, protect your finances and give peace of mind to your loved ones.
When you reach a point where you need more support, your options may include in-home care services or residential aged care. A good first step is talking with your GP, who may refer you for a free assessment with an Aged Care Assessment Team or Service (ACAT or ACAS). This assessment is necessary before you can access government-subsidised services such as personal care, domestic assistance, meals, home nursing or residential accommodation.
Even if aged care services are not yet needed, it is wise to consider your preferences early. Having an agreed plan in place can ensure that the right decisions are made when the time comes. Without some form of forward planning, you may have fewer options when you need them most.
One of the most important parts of aged care planning is understanding how to manage the costs involved. Having enough cash flow to cover fees and related expenses can help protect your financial security.
Some of the key questions to consider include:
Should the family home be kept, sold or rented?
How will Centrelink or Veterans’ Affairs benefits be affected?
Are you eligible for any concessions or subsidies?
What is the best way to fund your aged care?
Will your estate be affected by your choices?
How can you best manage any tax obligations?
Your adviser can guide you through these decisions to ensure that your care is affordable and aligned with your long-term goals.
The costs of aged care can vary widely. That is why it is important to be clear on what kind of care you might need and what you can realistically afford. Your assessable income and assets will often influence how much you are expected to contribute.
Start by making a checklist of what matters most to you. Consider location, services, medical facilities and the level of nursing support available. Visiting aged care providers and asking questions can help you compare your options. Many facilities have waiting lists, so it may be wise to apply to more than one.
A good place to start your search is www.myagedcare.gov.au, which lists services and fees in your preferred area.
For assessments or to speak with someone directly, you can contact:
ACAT/ACAS: 1800 200 422
Aged care fees generally include several components:
Accommodation payments: This may be a lump sum, a daily payment or a mix of both.
Refundable Accommodation Deposit (RAD): A lump sum payment that is refunded to you or your estate, unless you have requested deductions or have unpaid fees.
Daily Accommodation Payment (DAP): Similar to rent, this covers the daily cost of accommodation and can also be used to pay interest on unpaid RAD amounts.
Daily care fees: These contribute to meals, nursing, laundry and cleaning. Standard fees are set at 85% of the basic single Age Pension. If you have higher income or assets, you may be required to pay a means-tested fee, capped annually and over your lifetime.
Additional service fees: These are for extras like special meals, entertainment or personal services and are usually offered as a package or paid for separately.
Once you accept a place in a facility, you will sign a Resident Agreement outlining the services and fees. You will then have 28 days to choose how to pay your accommodation costs, whether that is through a RAD, DAP or a combination.
You may need to adjust your assets to cover the initial and ongoing fees. It is also important to notify Centrelink or Veterans’ Affairs of any changes to your living arrangements or finances.
Your adviser can work with you to explore strategies that help maintain regular cash flow and ensure your care is sustainable over the long term. The goal is to balance your financial priorities, such as:
Maximising age pension entitlements
Minimising aged care fees
Maintaining investment returns
Deciding what to do with the family home
These considerations are often interconnected. A well-structured plan with the support of a qualified adviser can make a significant difference for you and your family.
A change in living arrangements often calls for a review of your estate planning documents. It is important that your wishes are clearly outlined and your affairs are protected.
Key areas to review include:
Your Will: Ensure it is up to date and reflects your current wishes
Enduring Power of Attorney: Appoint someone you trust to manage your financial affairs if you become unable to do so
Enduring Guardianship: Authorise someone to make decisions about your health and living arrangements
Death benefit nominations: Review how your super or investments will be distributed
These documents can only be completed while you are legally deemed to have decision-making capacity, so early planning is essential.
Aged care can be complex, but it does not have to be overwhelming. By starting the conversation early and involving your adviser, you can put a clear plan in place that gives you confidence about the future. Whether you need care now or later, the right guidance will help you make informed decisions and reduce the pressure on those closest to you.
