moving into residential aged care 101
Moving into residential aged care can be at times overwhelming and quite daunting. Unfortunately, one of the common triggers prompting a move into care can be brought on by a sudden fall, stroke, or some other unexpected event. These occurrences then lead to families making decisions, which, if not thoroughly thought through, lead to regrettable consequences. But if the conversation is had and planning takes place, this type of heartache can be avoided.
There are a number of decisions to be made and aspects to consider such as:
which facility best suits your needs
what fees will you need to pay and how should you fund them
what should you do with your family home, and
what impact will the move into care have on social security benefits.
There are generally 5 steps to follow if you think you or a loved one may need to enter an aged care facility:
Get your care needs assessed: Before you can move into a facility you will need to have your lifestyle and health needs assessed by an Aged Care Assessment Team (ACAT) member. You will be asked a series of questions to determine your care needs and whether you require full time residential care or another type of care.
Find an aged care home: All facilities are different so doing your homework on which may be most suitable to your needs is important. ACAT can provide you with a list of aged care homes in your area. They can be contacted on aged 1800 200 422. An alternative resource is the My Aged Care website at www.myagedcare.gov.au.
Work out the costs: Aged care costs can be partially funded by the government, you may need to pay a number of different fees depending on your financial situation when entering care.
Apply for your place: A separate application will need to be completed for each facility and you may have to be put on a waiting list before a suitable room becomes available.
Move in: Prior to moving into your new home, you will be provided with an Accommodation Agreement which outlines the terms of your residency, your rights and responsibilities and the rights and responsibilities of the facility you are moving into. This generally needs to be signed within a 28 day period of entering care.
Throughout this planning process, it’s important to look at the costs involved in paying for Residential Aged Care. There are several types of fees that need to be paid, these include ongoing fees and accommodation fees.
There are 3 ongoing care fees that may be payable when entering care:
Basic daily care fee: is a contribution towards daily living costs such as nursing, meals and personal care. This fee is based on 85% of the full Basic Single Age Pension and generally all aged care residents are required to pay this fee for each day they are in care.
Means-tested fee: may be payable in addition to the basic daily care fee and is an additional contribution to the cost of care. This fee is based on a formula that takes into account your income and assets. The general rule of thumb is the higher level of income and assets you hold, the higher this additional fee will be.
Extra services fee: is charged by the facility for extra services provided. This may include pay TV, a larger room or additional leisure activities. This fee is determined by the facility so will therefore differ from place to place. You should speak with each facility you are liaising with to determine whether this fee is payable or not.
An accommodation payment is a fee which goes towards the cost of your room. The Australian Government will pay for your accommodation costs if your combined income and assets sit below a certain amount.
If you are required to pay an accommodation payment you have the choice of paying this as follows:
refundable lump sum (RAD) – aged care facilities can charge a maximum RAD of up to $550,000. A higher charge requires additional approval by the Aged Care Pricing Commissioner.
a daily accommodation payment (DAP) – is a daily payment you will be required to pay if you do not pay the RAD in full. It is effectively “interest” payable on any lump sum RAD not paid.
a combination of both of the above.
As you can see, there are a number of potential fees involved and the costs can quickly add up, so working out the financial side of moving into an Aged Care facility can be quite confusing and stressful. To help ease this burden, planning early can make the world of difference. There are strategies that can be put in place to try to help you minimise the costs, which a qualified Financial Adviser can assist with.