Aged care. Two very emotionally charged words. Two words no one wants to consider as part of their future. People would rather die than go into one of ‘those’ places.
But then the time comes when a loved one can no longer manage on their own. A raft of emotions arise – guilt, grief, impending relief – and tough decisions have to be made. Knowing where to start is hard, very hard.
Amidst the turmoil, you have the unenviable task of telling your beloved mother, father, husband or wife, that they need to move out of their home. It’s one of the hardest conversations to have and it’s often met with denial, refusal or anger. Convincing a loved one that you have their best interests at heart can be incredibly challenging.
While dealing with the emotional upheaval, you have to tackle the practicalities. A suitable aged care facility needs to be found and often there are long waiting lists. Then there’s all the facility and Centrelink (aargh) paperwork to complete while you try to make sense of the complicated aged care fee structure – What fees are payable and when? What can be done to reduce the fees? And how can you manage to pay the fees on an ongoing basis?
I hate the thought of anyone struggling to navigate the aged care system. While I can’t take away all the emotions you’ll experience, I can equip you with knowledge that’ll reduce your stress levels and demystify the process. A good starting point is breaking down the aged care fee structure in Australia.
The aged care fee structure can be broken down into four areas as summarised in the chart below.
This is the first fee that comes into consideration and it goes towards the cost of a person’s accommodation. The fee is a fixed amount. Assuming a person has sufficient income and assets, the amount payable will not exceed the facilities advertised amount.
The accommodation payment can be paid as either:
The RAD is a refundable payment, guaranteed by the Government, and is refunded within 14 days of a person leaving the facility, following the deduction of any outstanding care costs.
The DAP is a daily payment contributing to the cost of accommodation. It is paid periodically (i.e. fortnightly or monthly) and is not refundable.
This is a fixed, flat fee that everyone pays no matter how much money they have. The fee is 85% of the single Age Pension.
This fee goes towards everyday living expenses such as meals and refreshments, cleaning, laundry, heating and cooling. It is payable each day someone is in care.
This fee is a tad more complicated. While it also goes towards the cost of someone’s care, the amount payable is based on a person’s income and assets.
The good news? There are lots of strategies that may help minimise this ongoing fee and potentially increase the amount of Age Pension you or your loved one receives. Having someone in the know, like me, can definitely help you work through the options available.
This fee captures a range of items and services that will make a person’s stay more comfortable including the provision of items like a daily newspaper, wine with meals or access to Foxtel.
The cost is generally a flat fee determined by the facility. Facilities are under no obligation to provide an option for these services so it pays to check if they do and what the associated costs are.
In order for the Government to pay a share of the aged care costs, you need to get approval from an Aged Care Assessment Team (ACAT). In Victoria, this team is called an Aged Care Assessment Service (ACAS).
Completing the documentation takes time which is where I can come in. As your personal aged care specialist, I can deal with all the paperwork. I can also assess, and hopefully minimise, the fees associated.
Having a specialist like me in your corner will give you the time and space you need to deal with the most important thing – looking after your family’s wellbeing during this tumultuous time.
If you need help navigating aged care paperwork and fees, please get in touch.
For general information on aged care services in Australia, please head to the myagedcare website.
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General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.