On 1 July rules on funding and delivery of Age Care were set to undergo significant changes.
The main changes were the result of the Royal Commission into Age Care Quality and Safety and aim to make the delivery of care safer, and people are treated with respect and dignity. This will affect delivery of services to older people in their homes, community setting and residential care homes.
On 4 June the Federal Government announced that industry needed more time to prepare for these changes so they have been rescheduled to commence on 1 Nov 2025.
In the meantime experienced financial adviser Nicole Bell is qualified to offer advice consultations for any Retirement Essentials members who are grappling with the complexity of aged care decision-making, as well as the emotional toll of supporting older relatives.
Today Nicole shares answers to five common aged care questions that pop up in customer conversations.
Q. Is it better to sell my house or to rent it out when I move to aged care later this year? Is there a significant financial advantage? I am 78, fully retired and my home is valued at about $900,000.
A. When moving into aged care, whether or not you keep or sell the family home is a complex decision and the best course of action really depends on a range of financial and personal factors. Every situation is unique and so it is really helpful to understand your options.
The interplay between selling a home, paying the Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP), and how these affect Age Pension entitlements and care fees is complex and often misunderstood, and our goal is to explain how these moving parts work to help customers avoid mistakes and make more informed decisions.
One of the most common mistakes is selling the family home immediately without exploring other avenues. Many people assume they need to sell the home right away to fund entry to aged care, when in many cases, it’s not necessarily the best course of action and it doesn’t have to be an ‘all or nothing decision’.
For example, paying just part of the Refundable Accommodation Deposit (RAD) and holding onto the house for up to 2 years can sometimes allow an individual to keep their Age Pension for longer, enabling a more measured approach to selling the home or accessing equity down the track. And at that time, it’s not a crisis situation anymore. Everyone’s settled in, and everyone’s clearheaded. The next time we need to start making some significant decisions is after the family has had a little bit of breathing space.
It is also worth bearing in mind the emotional impact of a sudden sale of the family home. For the individual moving into care, an abrupt sale of their long-term home can lead to significant grief and a lack of closure, which may be mitigated by careful planning.
Q. I can see that my mother is becoming increasingly frail and I am dead scared she will have a fall and not be found in time to help her. I am encouraging her to wear an alarm (but she forgets). I have also raised the question of her moving to a nearby aged care home. She flatly refuses, saying ‘they’ll carry me out in a box’. As her only child, how do I get a decent discussion going about her care needs?
A. Often entering aged care can feel like losing your independence and your home all at once, and this can come with a lot of fear and grief. Aged care conversations can be difficult, so it is important to approach the topic gently. It’s crucial that your loved one feels you are on their side and you have a shared goal. s. Because the thing is, you’re not going to make any progress if you continue to argue. It is important that your loved one feels understood and supported, so they are more open to start exploring different options.
It can be easy to ‘skip steps’ and assume residential aged care is the only option. Accessing care in the home as early as possible can significantly delay or even eliminate the need to enter residential aged care. Studies consistently show that early intervention can delay the need for residential care, while helping families avoid crisis situations where choices are taken away from you. If you want to have the greatest possible chance of remaining in your own home, you need to get as much help as possible as early as possible
Once all options have been explored for support in the home, the conversation around residential care may become an easier conversation to have as you have slowly worked toward that point. First and foremost these conversations need to be approached with understanding and compassion for the life that they are giving up, and hopefully lead them to a point where they are participating in the decision making rather than waiting until a crisis point where the decision is taken out of their hands. .
Q. We are exploring local aged care facilities for my father and I am his Power of Attorney. I am new to making decisions about aged care and concerned I might overlook something important. What are some of the practical things I should keep in mind?
A. It really helps to understand your options ahead of time to avoid being overwhelmed during a crisis. Where practical, accessing home care and doing home modifications may allow your father to stay in their home longer prior to needing to move into residential care. Further steps you could consider include:
- Having open conversations with family and close friends
- Ensuring Power of Attorney, Enduring guardianship, and medical directive documents are in place and known to everyone
- Making sure Centrelink records are up to date
- Seeking professional advice on potential financial implications of home care or moving into a residential care facility.
- Engage your father in the decision making if he has the capacity – Having someone making decisions for him all of a sudden can leave him feeling guilty for the burden, and angry at the loss of control. Including him in discussions and seeking his opinion may help keep communication lines open while your relationship dynamics are changing.
Remember too when someone goes into aged care it is often a major emotional transition for them. Many people that enter care at short notice (or via a hospital stay), never get a chance to say goodbye to their home. That can be incredibly distressing to be told you are unable to return to a sanctuary you may have called home for decades – that you’ll never walk into your loungeroom and have your own space, and you won’t be the one that gets to go through all the photo albums to gain closure. Family members and carers need to keep this emotional transition in mind.
Equally, it is important for carers and family members to take care of themselves during this time. The process of a loved one entering aged care can be incredibly overwhelming and often comes with feelings of guilt. Where necessary, we suggest:
- Accessing community support services.
- Seeking counsel or someone to talk to.
- Recognising that it is a grieving process for everyone involved, including the carer, and that it’s important to keep their head above water.
Q: Why is it important to seek financial advice and guidance before accepting an offer for a place in an aged care facility?
There are many moving parts to think about such as aged care fee options, Age Pension impacts and what to do with the family home. Financial advice can show you how your choices about meeting aged care costs might affect Centrelink benefits and your ability to meet all your expenses. Advice from a professional can also help:
- Provide confidence in major financial decisions, especially for those in a Power of Attorney position who are not used to making such decisions.
- Prevent irreversible mistakes that may lead to unintended consequences like an increase in means-tested care fees or loss of Age Pension income.
- Understand trade-offs and avoid missteps like immediately selling the family home when it might not be the best option, or managing large sums of cash as a Power of Attorney without professional guidance.
- Navigate unique situations, as every person’s financial circumstances are different.
Mistakes can be costly or impossible to undo. We have seen cases where younger family members contribute to pay the Refundable Accommodation Deposit (RAD) without receiving advice. This can lead to the money becoming part of their loved one’s estate, making it difficult to retrieve in the short term. Worse, this can also potentially cause higher means-tested care fees.
Q. If we have no significant health issues, at which age or stage of retirement should my wife and I start planning for possible eventual care needs? My wife is aged 74 and I am 76. Do we even need to be thinking about this at our age and stage?
A. For most people it is usually preferable to ‘age in place’ if you can. Once again, accessing any sort of home care or doing some home modifications can allow you to stay at home for longer even as your mobility decreases. Planning ahead allows you to retain your independence for longer and reduce the chances you end up in crisis mode where decisions may be taken out of your hands.
The earlier you start to think about your care needs, the easier it will be to navigate your options should your health deteriorate. If a crisis situation does emerge down the track, you don’t want to be in a position where you are trying to heal your body and grieve a loss of independence, while also trying to figure out these incredibly complex financial decisions – often those decisions are lumped onto family members who have never made such decisions before.
So, it pays to understand what your options are ahead of time, making your wishes very, very clear, having open conversations with family and friends, ensuring that your Power of Attorney, Enduring Guardianship and medical directives are in place ahead of time and that everyone knows what they are.
If you and/or your loved ones are in need of support, Retirement Essentials newly introduced Aged Care Consultation will help you navigate this tricky terrain. During the 55-minute video call, our advisers can answer your questions, discuss your fee options, ensure any potential Age Pension impacts are easily understood and support decision making about the family home. Each aspect of the consultation is designed to give you reassurance on your next steps.
Do you have other questions on Aged Care?
This article is the first in a series exploring common questions that arise when making decisions about aged care options and scenarios, so feel free to share any experiences or questions you may have about making the move to aged care.
