(03) 9725 9078
  • Facebook
  • Twitter
  • Google
  • Facebook
  • Twitter
  • Google
Priority1 Wealth Management
  • Home
  • Why Us
    • Why Us
    • Our People
    • More About What We Do
    • Testimonials
    • Our Professional Partners
    • P1 TV
    • Priority1 featuring in the media
    • Privacy Policy
  • Our Services
    • Learn About the Value of Advice
    • Financial Planning Services
    • Financial Planning Process
    • Capital Gains Tax Planning
    • Centrelink / Govt Payments
    • Investment Planning
    • Mortgage Minimisation
  • Insurances
    • Types of Insurances
    • Personal Insurance
  • Superannuation
    • Retirement Planning
    • SMSF
    • Estate Planning
  • The Latest News
  • Our Community Support Progam
    • Our Community Support Program
    • Corin Jacka Community Ambassador Smiling Mind
    • Our Workplace Financial Literacy Program
  • Contact Us
  • Feel FREE to download one of our FREE eBooks
Select Page

What is your aged care funding strategy?

Jan 30, 2018 | Finances, Financial Literacy, Financial Planning |

When it comes to planning for retirement few of us think beyond the opportunity to travel and do all those things we’ve been putting off until we have more time and fewer responsibilities. It’s safe to say that moving into residential aged care is not on anyone’s bucket list. But as the population ages, it’s a possibility that few of us can ignore.

More than 3.6 million Australians, or 16 per cent of the population, are currently aged 65 and over.iThis is projected to grow to 22 per cent by 2061, or more than one in five.iiWe’re also living longer. The average Australian can expect to live into their 80siii, and many of us will live beyond 90.iv

That means more of us will need some form of aged care late in life. And as pressure grows on aged care service providers to cater for more people, the costs may rise.

What will you pay?

In recent years the government has tightened the rules around the calculation of means-tested fees for residential aged care. The aim is to make the provision of aged care services sustainable as the demand for high quality accommodation grows.

As we begin to consider the future care of not only ourselves but our older loved ones, what can we expect to pay?

The government provides an online Residential Care Fee Estimatorv to help you work out the likely cost of aged care. The type of fees you pay will depend on the facility and your ability to pay. One or more of the following may apply:

Type of fee Included
Basic daily care fee Living costs such as meals, power, laundry. Set at 85% of the single Age Pension and for some people this is the only fee payable.
Means-tested fee An additional contribution towards cost of care determined by Department of Human Services (DHS) and based on your means-tested income and assets.
Accommodation payment The government may cover some or all of this depending on your assets and income. If you are required to contribute you can do so as a refundable lump sum accommodation deposit (RAD), a non-refundable daily accommodation payment (DAP) or a combination of the two.
Extras/additional options These vary depending on your choice of facility and cover extras such as a higher standard of accommodation and services.

Watch out for “extras”

Although the government caps the annual and lifetime means-tested fees, you may be asked to pay extra for things such as a higher standard of accommodation, hairdressing, wine with meals, internet access and excursions. It’s important to check with the facility first to find out what is offered and how much these extra services will cost. In some cases, the charges exceed the services supplied and can add up to a substantial amount.

Aged care providers must give itemised accounts to the resident breaking down each of these services and the associated charge. Legislation also states that these fees cannot be charged more than one month in advance.

Plan to make it easier

Moving house can be stressful at any age, but particularly so when you are elderly and frail and have a lifetime of memories stored in your family home. Everyone wants the best possible living conditions for themselves and their loved ones, so it’s important not to make decisions in a rush at the eleventh hour. The decision about whether it’s better to sell the family home or keep it and rent it out to help fund the ongoing cost of care is one that needs careful consideration.

This is where we can help. Strategies for wealth creation that take into account all your retirement needs – including the possibility that you will need some form of aged care – are increasingly relevant. With careful planning you need never compromise on the life you want to lead.

As the saying goes, you’re never too young to plan your future. But you’re never too old either! 

i http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/2071.0~2016~Main%20Features~Ageing%20Population~14

ii http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/3222.0main+features32012%20(base)%20to%202101

iii http://www.worldlifeexpectancy.com/australia-life-expectancy

iv http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(16)32381-9/fulltext

v http://www.myagedcare.gov.au/estimate-fees-for-aged-care-services

Newsletter

Recent Posts

  • Is this insurance cover necessary?
  • How the world celebrates Christmas
  • 5 ways to benefit from record low interest rates
  • Being sensible with Buy Now Pay Later this silly season
  • Quarterly Economic Update: July – September 2019

Archives

  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • May 2015

Categories

  • Age Pension
  • Centrelink
  • estate planning
  • Finances
  • Financial Literacy
  • Financial Planning
  • Health & Wellbeing
  • Insurance
  • Interest rates
  • Investing
  • Lending
  • Loans
  • Property
  • Retirement
  • Superannuation
  • Taxation Planning
  • Uncategorised
  • wills
The information contained within this site has been prepared by Priority1 Wealth Management Group Pty Ltd. Priority1 Wealth Management Group Pty Ltd is a Corporate Authorised Representative of Priority1 Wealth Management Group (Australia) Pty Ltd (AFSL 324472). It contains general advice only and has been prepared without taking into account the objectives, financial situation or needs of any individual. Priority1 has endeavoured to keep all information current and accurate, however you should speak with a Priority1 advisor before making any financial decisions. Do not act on the information within this site alone, as the decisions you make may not be appropriate to your personal goals and objectives, and you may not be aware of the risks you are taking.

PRIORITY 1 WEALTH MANAGEMENT GROUP PTY LTD
Shop 1 204-206 Warrandyte Road Ringwood North Victoria 3134
P.O. Box 375 Croydon, Victoria 3136
T 03 9725 9078 | F 03 9723 7721 Copyright © 2017

Business Website by No BS SEO