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Demystifying the aged care maze

Demystifying the aged care maze

The rules and costs involved in the aged care system can seem a daunting prospect to deal with, so if you are negotiating the system now or are planning ahead for the future this summary may be a good starting point.

How does someone access an aged care facility?

Once a person’s health is such that they may have trouble living independently or have difficulty with everyday tasks, they can request an assessment by a local Aged Care Assessment Team (ACAT, or ACAS in Victoria). This determines whether they can access an aged care facility or other aged care services.

An interview is conducted by a member of the ACAT team (usually a nurse, social worker or other health care professional), who may also ask to speak to the person’s doctor.

Selecting an aged care facility

Once a person qualifies for entry to an aged care facility it is then up to the person and their family to visit and select an aged care home that suits them. This may require inspecting various facilities and asking questions about the care and services offered and their cost structure. You can visit myagedcare.gov.au to search for possible aged care homes in your vicinity. This site also provides details to enable comparison of costs and services.

Once you have narrowed down the options it is advisable to make an application for entry at more than one facility, as availability can sometimes be an issue. Once a home offers a position, the person is given a Resident Agreement covering things like services, fees, rights and responsibilities. It is vital that the person understands this document and gets professional advice on any issues of concern before they sign.

What does it cost?

The costs of residential aged care are substantial, but government subsidies ensure that access is available to all. The amount you need to contribute toward the cost of care will depend on your financial situation and is assessed via an income and assets test. These costs can include:

An accommodation payment: This is for your accommodation in the home. Each aged care facility is required to publish its accommodation charge and this amount may be fully or partly subsidised, depending on your means testing. You can choose to pay your accommodation costs by a lump-sum, rental-type payments, or a combination of both. Lump-sum payments are refundable once the person leaves or passes on.

A basic daily fee: This covers living costs such as meals, power and laundry.

A means-tested care fee: This is an additional contribution towards the cost of care that some people may be required to pay, depending on the assessment of income and assets. Annual and lifetime caps apply to limit the amount of the means-tested care fee you will need to pay.

Optional extra fees: Some homes will offer additional optional services for an additional cost.

The importance of obtaining good advice

A financial adviser has the experience and knowledge to help guide you and your family members at a time when emotions may be running high and confusion may interfere with good decision making.

Good advice can help address critical questions, such as:

  • How to best fund the accommodation cost
  • What to do with the family home to achieve the best financial outcome
  • How to best preserve social security benefits
  • How to structure investments to optimise your means test situation and properly provide for ongoing income
  • What to do to ensure the person’s estate is protected for the benefit of beneficiaries

Even if the need for aged care is not imminent, it makes good sense to consider the issues in advance in order to relieve stress when the time comes to take action.

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