Wealthy or not: Which is best to afford Aged Care?

TL;DR

Learn about the fees associated with aged care, the various types of residents, and strategies to increase affordability.

Transcript

g'day and welcome to this week's video my name is Ashley Rowland and I'm a financial planner with consortium Private Wealth today we're going to be talking about affording aged care and in particular I want to pay attention to the least affordable financial position that our resident entering care can face now to start with it let's begin at the ba... Read More

Key Insights

• 😨 Aged care fees include a basic daily care fee, means-tested care contribution, and an accommodation payment.
• 🤱 Different types of residents have different fee structures based on their assets and income.
• 😨 Those with assets between $170,000 and $400,000 may face affordability challenges for aged care.
• 👪 Residents who cannot afford to pay their accommodation deposit in full may be forced to sell their home.
• 👪 Strategies to increase affordability include contributing funds towards the deposit, comparing facility pricing, having family members contribute, and maximizing income from other assets.

Questions & Answers

Q: What are the different fees associated with aged care?

There are three main fees - a basic daily care fee, means-tested care contribution, and an accommodation payment. The amount of the fees varies for each resident based on their assets and income.

Q: How does the affordability of aged care vary for residents with different financial positions?

Fully supported residents have assets below $50,000 and only need to pay the basic daily care fee. Partially supported residents, with assets between $50,000 and $170,000, may also have to pay a partial lump sum and the basic daily care fee. Standard residents pay all three fees, including a large lump sum deposit.

Q: What are the disadvantages for residents who cannot afford to pay their accommodation deposit in full?

They may be forced to sell their home to come up with the required capital. Their strategies for affording ongoing care costs become limited, and their estate assets diminish over time.

Q: How can affordability be increased for aged care?

There are several options, such as contributing funds as a lump sum towards the accommodation deposit, comparing aged care facilities for pricing, having family members contribute funds on your behalf, and maximizing income from other assets, like rental property.

Summary & Key Takeaways

• Aged care residents are required to pay a basic daily care fee, means-tested care contribution, and an accommodation payment.

• Different types of residents have different fee structures based on their assets and income.

• Those who cannot afford to pay their accommodation deposit in full may be forced to sell their home, limiting their options for funding ongoing care costs.