Moving into residential aged care can be stressful with complicated rules, family conflicts and rushed timeframes. This can easily lead to mistakes, which can be costly and difficult to rectify. This article highlights three common mistakes and tips to avoid traps.
Rushing your decision
The biggest expense you will face is the cost of your room, which is likely to be quoted as hundreds of thousands of dollars. However, you might choose to pay a daily fee instead of the big lump sum.
When signing contracts, many people feel pressured to make quick decisions that might lock them into arranging a quick sale of the home. We recommend you take time to make an informed decision and understand your options. Your provider must give you 28 days after moving into care to decide how to pay. This gives you time to get advice and be prepared.
Focusing on just day 1
You need to know what fees you will be asked to pay on the first day of your stay in residential care. But this is just your starting point as your fees change over time.
Decisions you make after entry and changes to your circumstances can impact your fees. Ensure you understand what to expect over the following 2-5 years, with projections showing expected changes in fees, age pension, cash flow and asset values.
Filling-in forms incorrectly
Services Australia needs to review your financial position to calculate your fees. To enable this assessment, you need to complete some forms and update Centrelink (or Veterans’ Affairs) records.
If you don’t fill in the right form, or make mistakes with the information provided, your fees might be incorrectly calculated or cause long delays with the assessment.
Even if your situation seems simple, there are so many aspects to consider in working out the best financial strategy. The value of seeking advice from an accredited aged care adviser is peace of mind to ensure you have made the right decisions to generate enough cashflow while protecting the value of your estate.
If you want to discuss your options or your situation, contact our specialist team here.
IMPORTANT INFORMATION: This document has been prepared by Aged Care Steps Pty Limited, ABN 42 156 656 843 AFSL 486723, based on our understanding of the relevant legislation at the time of writing. While every care has been taken, Aged Care Steps Pty Limited makes no representations as to the accuracy or completeness of the contents. The information is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness for your personal investment objectives, financial situation or individual needs. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information. Current as at 1 January 2024.