Four key mistakes we often see people make when they don’t get advice include:

• Selling the home without understanding the consequences
• Being afraid to pay a lump sum (refundable accommodation deposit - RAD)
• Not generating enough cashflow
• Providing the wrong information to Services Australia and paying too much in fees.

Sometimes things can go wrong. To ensure you are protected, is important to get advice from someone who has experience and education, is licensed under an Australian Financial Advice Licence (AFSL) and is listed on the ASIC Financial Adviser Register. If something does go wrong, you then have access to dispute resolution processes and professional indemnity insurance.

Advice should focus on more than just the costs on date of entry into care. You want the advice to also forecast how your finances will be affected over time, to make sure you don’t run out of money or make bad decisions. Examples of advice gone bad, include:

• If keeping the home, not understanding how the age pension changes after two years.
• Structuring finances to qualify as a low-means resident, without realising this may make it harder to find a place with some aged care providers.
• A person may gain comfort that the home is exempt if an eligible carer continues to live there, but what seems like an affordable option could soon be a financial disaster if the carer loses income support and this was not anticipated.
• One child in a family uses their own money to help a parent pay the lump sum Refundable Accommodation Deposit/Contribution, and only too late realises that this resulted in higher aged care fees and an estate dispute when they want to recover the money.