Looking for aged care – where do you start?

Where do you start if you are looking for aged care?

If you have a parent or loved one who is not coping at home, working out what to do or where to start with aged care can be very difficult.  If you google aged care, you are likely to come up with more than 20 million hits and most of the early responses are residential aged care.  So where to do you start if you are looking for aged care?  Here are some tips:

Talk to your loved one

Discuss your concerns with your parent or loved one.  You will not be able to do anything unless the loved one agrees.  In our experience, it is not unusual for a parent to say they think they are coping fine, even if it requires you to do a lot of running around.  It may take quite a while for the parent to agree to help.  Just be patient; it is not easy getting old and coming to terms with the thought of losing independence or needing help.  Here is a useful article about how to have that kind of conversation.

Work out what care is needed

Think about the kind of assistance that is needed.  Is it help with domestic tasks or more that that?  Are they lonely or forgetting to take their medications?  Defining the problem will help you  work out the best solution.  Most people want to remain in their home with some help with daily living tasks.  In that case, home help would be best but try to work out what kind of help at home is needed, otherwise, the loved one will quickly say it is not working for them.  If the loved one is lonely then it could be worth considering some form of community living such as a retirement village or residential facility.  If they need a considerable amount of help and care, then an aged care residential facility could be the answer.

Get an ACAS/ACAT assessment

Get an ACAS/ACAT assessment done through myagedcare.gov.au.  This is a free assessment done by the government to assess whether an older person is eligible for subsidised care.  You can read more about ACAS/ACAT assessments in our earlier article which is here.  Getting it done early helps with planning and can be very useful if an emergency arises.

Shop around for providers

Once you have worked out what kind of help is needed, start looking for providers and work out the cost.  Make sure your loved one can afford the type of care they are looking at.  Good care is always available and affordable for people of all means; those that need assistance and cannot afford it can get subsidised care.  Remember to shop around for care.  Even if it is subsidised care, there are considerable differences in what you can get and how much it will cost amongst providers of both home care and residential care.

If you need assistance working out the options or understanding the costs, contact us for help and advice on 1800 744 676.

Until next time,

Sara and Margaret

*Unless they no longer have capacity.  Just because they have a diagnosis of dementia or Alzheimers does not mean they do not have capacity.  If they have lost capacity, it can be very complicated to take control of their situation without their consent.  Contact us if you need help in this situation.

5 tips for finding residential aged care for couples

Residential Aged Care for Couples

Aged Care Residential Facilities

Residential aged care for couples can be tricky and expensive and usually you will be looking for your Mum and Dad.  It can be hard to find 2 spots available at the same time or the rooms look too small for both members of a couple to live in.  It is not unusual for a facility to advertise ‘couple rooms’ but what does this mean and what should you look out for?  Here are 5 tips to help you on the journey.  Just a note that this article is specific to Aged Care Residential Facilities (ACRF’s) which are facilities that are accredited and subsidised by the Federal Government.  There are alternatives to ACRF’s for older couples.  If you want to find out more about those, read our earlier article on Aged Care Housing Options.

5 tips for finding residential aged care for couples

  1. Each member of a couple needs to pay separately for their daily costs (comprised of basic daily fee, means tested care fee and any additional or extra fees that the facility is charging).  This can be expensive as the daily charges are a minimum of around $17,750 per year currently.  Whilst that might seem like a lot, apart from the extra or additional fees, the amounts are means tested and the minimum amount of around $17,750  is pegged at 85% of the full pension.  When pensioners go into aged care, they are separately assessed for a single pension even if they are a couple and both going into care. This means that it is affordable but watch out for the extra or additional fees because they may make it unaffordable.
  2. Whilst moving into an ACRF might seem like severe downsizing, particularly for a couple, just remember that there are lots of common areas where the resident can enjoy space.  Think of it as a shared house rather than just a room.
  3. ‘Couple rooms’ are usually shared rooms meaning a room with 2 beds, often separated with a curtain similar to a hospital ward.  When one member of the couple passes away, the other bed in the room might be shared by someone else.  Make sure you have discussed  with the ACRF what will happen when one member of a couple passes away.  Will the survivor move to another room and, if so, how much will that cost?
  4. Don’t assume that because a couple have been sleeping in the same room for the past 60 years that they want to continue to do so.  Usually one member of a couple is less well than the other and has disturbed sleeping patterns which keeps the other partner awake.   We were recently told by a very wise facility manager that in her experience, for most couples, at least one member of the couple is really happy to be able to spend the days with a spouse but sleep alone comforted by the fact that someone else is there to tend to the spouse overnight.
  5. Each member of a couple will have to pay a separate Accommodation Payment (bond or RAD) unless they are supported.  How do aged care bonds work is covered in our post just follow the link. To find out whether or not a person is ‘supported’, see our earlier article on ‘How do you afford aged care if you are a pensioner with no assets.  If they are supported, the timing of moving into aged care can be really important and it could be beneficial to move them in separately, even a day apart, to be able to access additional funding for one member of the couple.

If you need help, call us on 1800 744 676

Call 1800 744 676 for an obligation free chat with one of our expert consultants if you want to find out more.

Until next time

Sara and Margaret


How do aged care bonds work?

What is an aged care bond?

When an elderly person enters into an aged care residential facility (ACRF) they may be asked to pay an aged care bond or Accommodation Payment.  This is sometimes also called a RAD, which is short for Refundable Accommodation Deposit.  It is colloquially called a bond.  The amount the resident pays depends on the ACRF; the price is set by the ACRF and is usually a function of the location, the room size and type and the state of the ACRF.  Think of a bond as the capital cost of entry into aged care – like paying for a house. In addition to paying a bond, the resident will also have to pay daily costs of living and care.  To find out more about those daily costs of living, see our earlier articles.

Also you will need to know about placement, so go and read our post “What is aged care placement?

If a resident has very few assets, they may not be required to pay a bond.  Our most recent article explains more about that.

When and how does an aged care bond have to be paid?

The resident does not have to have ready cash to pay the Accommodation Payment on the day they move into care.   Read on to understand what happens if they do not have the ready cash.

The Accommodation Payment can be paid wholly or partly in cash.  The amount that is paid in cash is called a RAD.  The ACRF gets to keep the income from the RAD whilst it holds the RAD.

Interest is payable on any amount of the Accommodation Payment that is not paid as cash from the date the resident moves in permanently usually at the rate fixed by the Government. At the moment that rate is 5.76% per annum.  That rate is reviewed every quarter.  The amount paid as interest is called a Daily Accommodation Payment (DAP) and is calculated by multiplying the outstanding amount of the Accommodation Payment by the current interest rate and dividing by 365 (or 366 in a leap year).

Selling Your Home To Pay The Full RAD

Quite often, a resident will move into care without having the ready cash and needs to sell the home to pay the full RAD.  They might have a bit of cash to contribute to a RAD whilst the home is being sold.  In that case, the resident would pay interest on the outstanding amount until the sale of his home settles and he can pay the balance of the Accommodation Payment as a RAD.

Here is an example.  George has moved into an ACRF and has agreed an Accommodation Payment of $500,000 for his room.  He has $200,000 in available cash but needs to sell his house to pay the whole of the Accommodation Payment as a RAD.  He decides to pay $150,000 as a RAD straight away so he can keep some money to pay other expenses such as getting the home ready for sale and selling the home.  So, until he receives the money from the sale of his home, he will pay $55.08 per day DAP ($350,000 x 5.76% /366).  Once the sale of his home settles and he receives the proceeds, he will pay the remaining $350,000 as a RAD, and he will not have to pay any more DAP.

Finally, the resident has 28 days after moving in to decide how he or she wishes to pay the Accommodation Payment.  Once a decision is made on how the resident would like to pay the Accommodation Payment, he or she then has 6 months to pay the agreed RAD.  The RAD can be topped up to the full amount of the Accommodation Payment at any time, even outside that 6 months.

Is the bond guaranteed?

Yes the RAD paid to an ACRF is guaranteed by the Federal Government and, in most cases, the resident or his estate will receive the whole amount back.  The amounts that are deducted are unpaid fees and charges and, in some cases, ACRF’s charge a refurbishment fee which they deduct from the RAD.  Make sure that the facility you are paying a RAD to is an ACRF.  There have been instances where a facility has taken a bond but that facility is not an ACRF which means that the bond is not guaranteed. You can check on the myagedcare website or ask the facility if you can see its certificate stating that it is an ACRF.

What does the ACRF do with the bond?

Under the relevant legislation, the ACRF is only allowed to use the RAD for limited purposes, including capital expenditure,  or invest the RAD in approved investments. The ACRF must comply with mandated prudential standards when investing RADs.  The ACRF keeps the income earned on those investments.  A resident is entitled to receive information from the ACRF about its RADs, including copies of the audited accounts on request.

When does the bond get returned?

The RAD is returned within 14 days of:

  1. the resident leaving the ACRF; or
  2. if the resident has passed away, a copy of probate being provided to the ACRF.  In very few cases, usually only if the RAD is relatively small, the ACRF may not require probate.  Probate can take quite a while to obtain and the ACRF will continue to keep the income on that RAD in the meantime.

If the ACRF does not meet these timeframes, it has to pay interest to the resident or his or her estate on the amount of the RAD at the rate fixed by the Government.  That rate is currently 3.75% per annum and is reviewed quarterly.

If you require further information or need assistance, contact us on 1800 744 676 or at info@signpostlms.com.au.

Until next time

Sara and Margaret

Retirement village vs aged care

What is the difference between aged care and a retirement village?

In an aged care residential facility, which used to be called a nursing home or hostel, care  is provided to the residents according to their needs and it is included in the cost together with meals and most other living expenses.  Retirement villages are primarily independent living units meaning that it is for people who can live independently and do not need care.  It becomes confusing because some retirement villages provide meals and have some sort of care available, usually at additional cost.  Most retirement village agreements have a provision in them saying that if your care needs increase, you can be asked to leave.

What is the difference in cost?

An aged care residential facility is subsidised by the Australian Government.  Because it is subsidised, you need to be assessed as eligible i.e. assessed as needing care.  Most elderly folk who are struggling on their own at home will qualify.  Being subsidised does not mean it is free – you have to pay if you can afford it but you only pay what you can if you have low means.  In aged care you pay for the accommodation (like buying a house) either by paying a bond or rent type payments (unless you are low means) and you pay for care and services.  If you pay the bond as cash, you get it back when you leave the facility.  The amount you pay for care and services depends on your means and on whether the particular facility provides extras.

Retirement villages are not subsidised.  You pay an entry fee (like buying a house or apartment) and you pay a monthly service fee. What you get for that monthly fee depends on the village.  When you leave, most retirement villages take a percentage of the sale price – and this could be as much as 40%.   You also usually have to pay the monthly fee for a while after you vacate the village.  We say to our clients that retirement villages are not an investment decision – they are a lifestyle choice.

So what is appropriate for you?

If you need help with your daily tasks (meals, hygiene, dressing) then an aged care facility is probably more appropriate.  If your only issue is loneliness, then a retirement village could be the better choice.  If you are struggling at home or over 85 then you should be very cautious about moving into a retirement village.  Whilst a retirement village might look suitable, they can very expensive as a short term option, mainly because of the deferred management fee.  Some retirement villages have aged care facilities on site but understand that you will have to pay separately for the aged care facility and that the retirement village cannot guarantee that you will get a bed in the facility when you need it.

How do you tell the difference?

The easiest way to tell the difference is to ask the sales person ‘Are you an aged care residential facility or a retirement village?’.  If they say neither, they are probably an SRS (supported residential service) which is something altogether different.

If you are still confused or need help sorting through the options, call us on 1800 744 676 or email us at info@signpostlms.com.au.

Until next time

Sara and Margaret


How do you afford aged care if you are a pensioner with no assets?

Affording aged care if you have no assets

If you receive an age pension and have no or very few assets, the good news is that you can still afford quality aged care in a nice facility.  Most aged care residential facilities have what are called ‘supported beds’.  These are beds that are offered to people who are low means (as defined) and the Federal Government provides additional funding to the facility for supported beds.  They are in high demand so you are more likely to get a supported bed in the facility of your choice if you plan ahead.  This article sets out more detail about the eligibility criteria and how to find a supported bed.

Asset thresholds for supported beds in aged care

If you have assets below the relevant thresholds, you will not be required to pay any bond (called an Accommodation Payment or Accommodation Contribution) at all unless you have an independent income source other than your pension.  As at the date of publishing this article, the relevant asset thresholds are:

  • for a single person below $46,500
  • for a couple combined below $93,000.

If you have some , but not a lot, of assets and depending on whether you have an independent income source, you may be eligible for a partly supported bed meaning that you will be required to make a contribution towards the cost of your accommodation.  This contribution is called an Accommodation Contribution.  The amount you will be required to contribute depends on the amount of your assets and income.  As at the date of publishing this article, the relevant assets thresholds for a partly supported bed are:

  • for single, assets from $46,500 to $159,631.20
  • for couples combined assets from $93,000 to $319,262.40

Up to date thresholds can be found in the current Schedule of Resident and Home Care Fees and Charges

Treatment of the family home, other assets and independent income

Your home is excluded for these asset thresholds if a protected person will remain in the house.  A protected person is a spouse or dependent child, a carer on income support who has lived there for at least 2 years or a close relative on income support who has lived there more than 5 years.  If there will not be a protected person remaining in the home, the home is included and its value is capped.  At the moment that cap is $159,631.20 which means that, if you own a home and no protected person will be remaining in it, you will most likely not qualify for a supported bed.

If you receive income other than an age pension and returns from investing your assets, you may also not qualify and you should seek independent advice.  Remember that personal assets like household furniture and cars, boats and caravans are also included in this threshold test.

If you qualify, the only payment you will be required to make for your aged care costs, apart from the Accommodation Contribution,  is the daily fee which is pegged at 85% of the full age pension plus any additional fees for extra things that you agree to with the owner of the facility. You should either avoid any facilities that ask for these fees or ask them if they waive the fees in cases such as yours as these additional fees can add up very quickly.

Change of financial position whilst in care

The asset and income assessment is not static – it is regularly revised during your time in care.  If your asset or income position changes whilst you are in care, for example if the protected person leaves the home or you inherit a sum of money, you may be asked to contribute more to the cost of care after you have moved in.

Finally, sometimes paying an Accommodation Contribution can cost you more than paying the amount of bond (Accommodation Payment) that the facility is asking for from someone who is not low means.  This is more likely if you are at the upper end of the thresholds.  We recommend that you speak to us or seek independent advice from a suitably qualified and specialist aged care financial adviser.

Finding a supported bed

You can use an aged placement agency such as us.   They usually have relevant and up to date information about available supported beds.  Otherwise, the best way is to ring around the aged care residential facilities in or around the area you want to live in and ask them if they have supported beds and whether any are available now or in the future.  You should ask if they are any conditions for supported beds.  For example, some may only have supported beds in shared rooms or may require you to pay additional fees for extras.  You can ask to put on a waiting list for supported bed and then call at regular intervals to make sure you remain on the waiting list.  Many wonderful aged care facilities have supported beds and sometimes you can get very lucky.  The harder you try, the luckier you will get.

If you need advice or help, call or email us.

Until next time

Sara and Margaret