Making the right financial decisions prior to moving into aged care will usually result in the resident being better off, by $5,000 – $10,000, for every year that they are in care. We help you with this, through simple strategies designed to improve Centrelink payments, assess your overall asset and cash flow position, and reduce age care costs.

Aged care bonds are also referred to as Accommodation Payment or Refundable Accommodation Deposit (RAD).

A bond for aged care is similar to paying a bond for apartment rental – the difference being that aged care bonds are usually much more.

Refundable accommodation deposits (RADs) are lump sum payments that vary based on location, facilities, and accommodation quality. The full amount is refunded upon departure, unless you opt for deductions or have outstanding fees. The Federal Government guarantees repayment for approved, federally subsidised services.

The amount you pay as the bond, will usually depend on the resident’s income, assets and of course on the type of aged care facility you choose as well. Anyone with less than $48,500 in assets will usually not be asked to pay a bond.

There are three ways that you can choose to pay for aged care bonds;

• Make a lump sum payment (full amount payable in 6 months).
• Make regular payments every fortnight or month.
• A combination of both lump sum and regular payments.

Choosing a payment method may be confusing. You want to choose one that won’t affect your parent’s pension or leave you with a heavy financial burden.

You may want to consult a financial adviser before you make this decision. They will help assess income and assets to make an estimate of what your bond fee will be.

They will also help you choose the payment method that is most well-suited to  you and your family.

The aged care system in Australia offers three levels of subsidised support for people who require living assistance:

Commonwealth Home Support Programme (CHSP) – provides entry-level services focussed on supporting individuals to undertake tasks of daily living to enable them to be more independent at home and in the community. Services under the program are provided on an ongoing or episodic basis.

Home Care – provides more structured and comprehensive support services in the home.

Residential aged care provides care and accommodation for people who have been assessed as requiring higher levels of care than can be provided in the home. This may include 24-hour nursing care. Residential care is both on a permanent and temporary (respite) basis.
Clients entering residential aged care may be required to fund their accommodation, basic living expenses and a contribution towards their care. This may require asset restructuring including the family home to fund lump sum and ongoing cashflow needs.

There are four types of fees that you may need to pay for aged care:

Accommodation fee - paid for the right to live in a residential service

Basic daily care fee - paid for the cost of aged care

Means-tested fee - you may need to pay certain fees depending on your income and assets

Additional services fee - only payable if you select additional services such as daily newspaper, recreational activities, etc.

The specific types of fees you have to pay as well as the amount largely depend on the aged care facility you want to move into, how much income you have, as well as the value of your assets.

The Australian government sets the rules for calculating the fees. Be sure to check with your resident agreement so you really understand what you are paying for.

With the advice of an aged care financial specialist, you can critically look at the rates you need to pay and any special rules that can help you minimise the cost.

If you have income below $31,140.20 and assets below $57,000, the Australian Government will pay your accommodation costs. If you have income above $78,816.92 or assets above $193,219.20, you will need to pay for the full cost of your accommodation, negotiated and agreed to with the aged care home. It is advised to engage a financial advisor specilising in aged care to help you manage your current assets and aged care costs and how to cash-flow model the affordability of quality aged care.

Reduce stress is a big one, but more tangibly we can increase Aged Pension, reduce Aged Care fees, protect Estates, minimise tax and lay out a clear road map for the whole family.

The rules are constantly changing. It's our advice that will assist in staying on top of the rule changes to ensure you can minimise unnecessary costs and fees whilst maintaining quality care.

Holistic aged care planning means that the entire financial life is considered and that it complements' any existing estate planning by respecting the wishes of the aged, minimising estate losses and encouraging cooperation amongst family members. When done well, estate planning should consider any tax implications that may be incurred and will be designed to minimise losses or penalties to the beneficiaries.
We can help remove emotion from the decision-making process so family members can think clearly and make an informed decision together in a united and fair manner.

At Smart Private Wealth, we understand the deep and trusted relationship that you would likely hold with your existing financial advisor. Aged Care is a very specialised area and with the constant changes to rules, documentation, landscape, most financial advisors are happy to outsource this area to a specialist and is the source of many of our referrals.

We are happy to take care of the Strategic Aged Care recommendations which are complementary to the services already provided to you and can involve your adviser in the decision-making/implementation, if appropriate.

Definitely not! At Smart Private Wealth, we operate on a strict no surprises, Fee for Service basis and will always let you know what the costs are beforehand.

We have absolutely no institutional involvement and focus on the right strategy with no undue influence from product providers.

In the event that you have an older Grandfathered product that we’re retaining, if we can’t turn the commissions off, we’ll rebate them back to you in full.

Definitely. Whether you’re a Self Funded Retiree or in receipt of a Centrelink/DVA Pension, entry into Care will need some DHS/Centrelink forms filled out correctly.

If standing in line at your local Centrelink office doesn’t sound like fun, we can help. Please note, if you require our assistance with Centrelink paperwork we will issue you with a quote for our time.  Any fees incurred for Centrelink assistance will be in addition to our Aged Care fees. 

Working out what care option is most appropriate as a client gets older may be best solved through a family decision. It is important for clients to decide in advance to have a family meeting and talk to their children and their partners as well as other close family members.

Having open discussions with the family members can help children to know what their parent wants and may help to minimise disputes among the family.

The list below might get clients started with things they should talk about as a family:

• What is important when making a decision about where to live
• Who should be responsible for making decisions – about finances and/or medical/lifestyle requirements
• How the estate will be distributed and why
• Where copies of all important paperwork is kept – including the will, bank account details and copies of insurance policies
• What should happen with the home if the person can no longer live there.

Remember that by the time the client needs to move into aged care, it is probably their children who will need to make the arrangements and the decisions.

Clients who move into residential aged care may need to consider taxation implications for the first time in many years. Many clients may need to recommence lodging tax returns, for example, if taxable income increases due to renting the former home or investing the proceeds from the sale of the former home.

In particular some of the issues to consider for clients include:

• Capital gains tax implications for the former home
• Land tax on the former home
• Capital gains tax if restructuring investments
• Implications of death benefits tax if superannuation lump sums are passed onto non-tax dependents.

At Smart Private Wealth, our approach to aged care financial advice is underpinned by our strategic and deep understanding of tax and financial structures, ensuring that our advice is holistic by nature.

We look at everything and consider every angle of your wealth, leaving no stone unturned to ensure your wealth remains exactly where you want it to.