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The Importance of Working With An Aged Care Financial Adviser

October 25, 2022 | Aged Care Advice Financial Advice

There are many things to think about when you or a loved one is transitioning into Aged Care. One of the biggest considerations is what to do with the family home. For many people, the family home is more than just an asset—it’s full of memories and emotional significance. The thought of selling the home can be very stressful.

However, it’s important to know that you have options and can seek advice from a specialist Aged Care Financial Adviser to understand all of your choices. This will help you make the best decision for your situation and create a better outcome for you and your family.

How an Aged Care Financial Adviser Can Help You

1. Selling Your Home and Aged Pension

You will no longer be considered a homeowner if you sell your home. However, the amount you pay to the service provider as a Refundable Accommodation Deposit (RAD) will not be treated as an asset for the calculation of your age pension. This amount is still accessible when calculating your means-tested daily care fee.

If you keep your former home, you may continue to be assessed as a homeowner for up to two years, with your home remaining an exempt asset for your asset test. Once the two-year period is over, the value of the former home will be assessed at market value under the non-homeowner asset limits. You have 28 days after moving into care to let the provider know whether you want to pay the total price as a lump sum (refundable accommodation deposit – RAD), daily rent (daily accommodation payment – DAP), or a combination of the two.

selling your house when entering aged care

Source: https://www.agedcaresteps.com.au

Planning and professional advice are the keys to quality care and effective decision-making. Your specialist Aged Care Financial Adviser can help by:

  • Providing you with the appropriate information to help you negotiate placement with a facility under an acceptable fee structure for your financial situation.
  • Advising on the most favourable strategy for the family home to optimise accommodation costs and age pension entitlements.
  • Calculating what accommodation payment or contribution is payable and how you can effectively structure your personal wealth to fund this.
  • Determining how ongoing accommodation fees can be minimised and entitlements can be maximised, through the effective structuring of investment products and implementation of a tailored aged care financial planning strategy.

2. Making a Claim on Your Estate

It is important to review your estate plan if your circumstances change, especially if you move into residential aged care. This ensures that your wishes are still reflected in your Will. For example, if you later develop dementia, you will likely need to delegate financial and medical decisions to someone else. This is easier if you have an Enduring Power of Attorney (and Guardianship).

So it is important to set up the appropriate powers before you or a loved one loses legal capacity. Once capacity is lost, it will be too late to set up the powers, and the Guardianship Tribunal will likely be needed.

Your specialist Aged Care Financial Adviser can assist in your Estate Planning by:

  • Advising how an accommodation placement may affect current Estate Planning arrangements.
  • Working in conjunction with your estate planning solicitor to help guide you and your family through the estate planning process, complete all necessary documentation, and make the right decisions with your financial and personal assets.
  • Upon your death, work with your solicitor to dissolve your investment portfolio and then distribute your financial assets and personal insurance claims in adherence to the instructions outlined in your estate plan, ensuring peace of mind during your family’s time of grief.

3. Social Security: Maintaining Your Records and Maximising Your Entitlements

You need to update your records with Centrelink or the Department of Veterans Affairs within 14 days if your circumstances change, including if you move into aged care. Your payments may change depending on how your income and assets change.

If you are part of a couple, you will still be assessed for combined income and assets, but you will both start to be paid at the higher single rate of pension. It is important to seek advice from a financial planner to ensure you get the most out of your entitlements.

Your specialist Aged Care Financial Adviser can provide support regarding your Social Security by:

  • Assessing how Centrelink entitlements and ongoing income may be affected.
  • Evaluating options for paying a refundable accommodation deposit or daily accommodation fees while ensuring that Centrelink benefits are not negatively affected.
  • Maximising access to additional benefits, such as the Commonwealth Seniors’ Health Card.

Working with the Experienced Aged Care Financial Advisers at Coastal Advice Group

Aged Care, Estate Planning and Social Security are three important topics you should be aware of. Aged Care can help you maintain your independence and quality of life as you age. Estate planning can help you ensure that your assets are distributed according to your wishes, and it can also help you avoid probate. Social Security can improve your quality of life by supplementing your income and providing access to various non-monetary entitlements.

At Coastal Advice Group, we support our clients in enjoying their golden years by delivering personalised financial advice. We believe everybody deserves access to quality financial advice to have peace of mind and achieve financial security. If you or a loved one needs Aged Care Financial Advice, we’ve got you covered! We have offices located in Newcastle, the Central CoastSydneyPort Macquarie, and Byron BayCall us or book online to secure your first appointment with us today and get started.


DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.