Aged care financial planning involves working closely with clients and government agencies to navigate complex funding arrangements and ensure optimal outcomes. The focus is on structuring finances to manage costs, maximise subsidies, and minimise stress during emotionally challenging times.

The key difference lies in the structuring of assets and income to determine aged care fees, which are influenced by Department of Aged Care regulations. These fees depend on income, assets, and how they are structured—not just on available funds. Additionally, aged care financial advice involves navigating multiple fees, including basic daily care fees, means-tested care fees, accommodation costs, and optional additional service fees.

Specialists provide expertise to navigate intricate fee structures and tailor strategies to individual needs. This ensures informed decision-making and effective cost management while preserving assets and maximising government benefits. Without specialist advice, families may overpay or fail to maximise their financial legacy.

One example involves a couple entering aged care at staggered times, preserving their family home as an exempt asset and saving significant costs. Another case saw a family negotiate a higher refundable accommodation deposit (RAD), reducing assessable assets and retaining pension entitlements, which minimised fees and maximised the estate’s value. The remaining RAD balance is refundable upon the resident passing away or leaving the facility. 

Planning should begin well before aged care is needed. Government agencies assess assets from the previous five years, so proactive discussions about gifting or transferring assets are crucial. Open conversations between parents and children can reduce stress and ensure informed decisions. Researching facilities in advance can also help ensure smoother transitions when the time comes.

Aged care costs include:

• Basic Daily Care Fee: Covers living expenses like meals and laundry (85% of the Age Pension)
• Means-Tested Care Fee: Based on income and assets, with a lifetime cap
• Accommodation Fees: Paid as a RAD, daily accommodation payment (DAP), or a combination of both
• Additional Service Fees: Optional or mandatory, depending on the facility, for luxury items like premium meals or activities.

Engaging a specialist ensures optimal structuring of fees and assets. For instance, retaining and renting the family home may reduce means-tested fees while generating income to cover costs.

Starting July 2025, aged care facilities may retain 2% of the RAD annually, up to a maximum of 5% over five years. This change emphasizes the importance of financial analysis to determine the best approach for each family.

Without planning, families may face financial stress, higher fees, and limited options. Selling the family home prematurely can increase assessable assets and reduce financial flexibility. Emotional stress also compounds when decisions are rushed. Early planning fosters better outcomes and lessens the burden on everyone involved.

Start by evaluating the family home’s value, exploring financing options for the RAD, and visiting potential facilities. Engaging a specialist ensures a comprehensive strategy that aligns with financial and emotional goals. Families can also benefit from resources like a curated aged care directory, offering insights into local facilities.