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Myths of aged care

11 Apr 2023

Written by

Rahul Singh
 
 
 
 
 

Brought to you by Challenger Tech

As the proverb goes, ‘a little knowledge is a dangerous thing’. With much information floating on the internet or a gathering among friends and family, clients sometimes make decisions based on incomplete information which can unfortunately lead to detrimental and sometimes irreversible outcomes. 

When a person enters aged care, they are faced with a plethora of rules – to name a few, concerns relating to social security payments, aged care fees and funding decisions, including what to do with the family home are often front of mind. 

To join the dots in making an informed decision requires holistic knowledge and highlights the importance of seeking financial planning advice. In seeking advice, one has the peace of mind that informed decisions are made and given the many nuanced legislative rules and opportunities, optimise their position when relevant. 

Over the years in the journey of assisting with provision of aged care advice, there have been a few common themes of aged care myths, tips and traps amongst unadvised clients. The article that you can access below, discusses some of these myths, tips and traps in an endeavour to highlight for awareness, which include: 

  • Not knowing that the price for a room can be paid in any combination of RAD (lump sum) & DAP (interest on the unpaid lump sum). 
  • Thinking that RAD price is non-negotiable when it could be worth asking the question. 
  • The cashflow issues caused by the Means Tested Care Fee (the co-contribution based on means) annual cap not being subject to an annualised averaging. 
  • A lower Maximum Permissible Interest Rate (the interest rate on unpaid lump sum) not necessarily being advantageous when considering low means residents. 
  • Financial hardship applications when majority of the monies are tied in RAD / RAC and minimal liquid assets. 
  • Myth that aged care entry means that the main residence has to be sold as a default option: may indeed be the case for some clients depending on funding decisions, but doesn’t need to be the one and only option by default. 


I am sure there are unfortunately many other scenarios which have acted as a trap for unadvised aged care clients. I would love to hear from you to see whether you have had clients in similar circumstances and whether you have come across other myths, tips and traps in addition to the 10 we have outlined in this article. 

Access the full article here.

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Disclaimer
This information is general information only and not intended to be financial product advice, investment advice, tax advice or legal advice and should not be relied upon as such. As this information is general in nature it may omit detail that could be significant to your particular circumstances. Scenarios, examples, and comparisons are shown for illustrative purposes only. Certain industry data used may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. Accurium has not independently verified any such data provided by third parties or industry or general publications. No representation or warranty, express or implied, is made as to its fairness, accuracy, correctness, completeness or adequacy. We recommend that individuals seek professional advice before making any financial decisions. This information is intended to assist you as part of your own advice to your client. Use of this information is your responsibility. To the maximum extent permitted by law, Accurium expressly disclaims all liabilities and responsibility in respect of any expenses, losses, damages or costs incurred by any recipient as a result of the use or reliance on the information including, without limitation, any liability arising from fault or negligence or otherwise. While all care has been taken to ensure the information is correct at the time of publishing, superannuation and tax legislation can change from time to time and Accurium is not liable for any loss arising from reliance on this information, including reliance on information that is no longer current. Tax is only one consideration when making a financial decision.
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