Most people are not prepared for entry into residential aged care because it is typically not considered until there is an immediate requirement. Aged care advice is usually not sought until there is an unexpected incident such as a stroke or fall and there is need for aged care. This can be a challenging and daunting process and one that the individual’s adviser can provide assistance with. Some of those areas include:

Accessing residential aged care

To access residential aged care, a person must register with My Aged Care, undergo an assessment by the Aged Care Assessment Team (ACAT), receive the ACAT approval letter, find a suitable residential aged care facility, apply for admission, complete the necessary paperwork, and arrange payment for the costs of accommodation and care. The process may vary depending on individual circumstances and the specific facility.

Funding options for residential aged care

The costs for residential aged care are separated into accommodation payments and ongoing care fees. Accommodation payments are determined by the advertised accommodation price and the individual’s means at entry into residential aged care. Ongoing care fees are determined by the individual’s means reassessed monthly and any extra or additional services.

Accommodation can be paid as a lump sum, a daily payment or a combination of lump sum and daily payment. The individual will have 28 days to decide on their payment method after they move into the aged care facility. Depending on the individual’s means at entry into residential aged care, they may be classified as a ‘low-means’ resident and the Government will subsidise all or part of their accommodation payment.

Ongoing care fees include the basic daily care fee, means-tested care fee and extra or additional services fees which are generally paid monthly to the aged care facility. The basic daily care fee is capped at 85% of the single basic rate of Age Pension and is indexed half yearly. The means-tested care fee is determined by the individual’s means and reassessed monthly. The extra or additional services fees are determined by the aged care facility.

Decision to keep or sell the former home

For Centrelink purposes, the former home is automatically exempt under the Assets Test for 2 years from the date the individual leaves the home. For aged care purposes the asset value of the former home is exempt where the home is occupied by a protected person. Where the former home is not occupied by a protected person, the home is assessed up to the home exemption cap (currently $201,231). For Centrelink and aged care purposes, where the former home is rented, the rental income is immediately assessed.

In an upcoming Accurium Education webinar, Sean Howard, Technical Services Manager from Challenger, will address the above issues; look at the structure of residential aged care and use case studies to demonstrate the benefits of advice.