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Aged Care Financial Advice (Part Two – Entering Residential Aged Care)

Whether for yourself or a loved one, making the decision to enter residential aged care is a significant step in life. The residential aged care system can be complex to navigate, and doing so without proper advice and planning makes it all the more difficult. In part one of this Aged Care Financial Advice series, we explored the planning and advice side of the process, and illustrated the impact of engaging a specialist financial adviser to guide you through the process. This time, we’ll be looking at the practical steps required to enter residential aged care, and how your financial adviser can support the transition.

Entering Residential Aged Care – A Three Step Process

Typically, there are three important steps required before you or a loved one enter residential aged care.

  • Getting Approved: Before you or your loved one can transition into residential aged care, it’s necessary to undergo a health evaluation to confirm the need for this level of support. This crucial assessment is carried out by a qualified member of an Aged Care Assessment Team (ACAT, or ACAS in Victoria) — professionals that include doctors, nurses, and social workers. To initiate this process, please schedule an assessment through
  • Choosing the Right Aged Care Facility: Selecting a residential aged care facility is a personal decision, and it’s important to choose a place where you or your loved one will feel at home. Importantly, your financial adviser can assist with this choice. We recommend visiting several facilities to find the one that best suits your individual preferences and requirements, and apply for multiple locations if there’s more than one that ticks the boxes. You can also visit for a list of potential accommodation costs, along with descriptions of each facility’s rooms and the services they offer.
  • Managing Your Finances: Upon admission to your chosen aged care facility, you might be asked to contribute to the cost of accommodation, depending on your financial situation. The Government may cover all or part of these costs for some individuals, whereas others will be responsible for the agreed-upon accommodation fees. Your financial adviser can liaise with the Department of Human Services (DHS) and inform you of your specific obligations based on an evaluation of your income and assets at the time of entry. Additionally, residents are typically required to cover a basic daily fee and possibly a means-tested care fee, subject to quarterly reassessments of your financial circumstances. Please note that certain facilities may offer premium services, superior accommodation standards, or enhanced meal options for an additional fee.

The key takeaway here is that your financial adviser is here to help you with the decisions and advice required leading up to admission into residential aged care. What’s more, an ongoing advice relationship and regular reviews means that your financial plan can stay on track even when external factors (such as legislative changes) have an impact on your financial situation.

Aged Care Financial Advice FAQs

In our experience working with people from all walks of life, and with unique aged care needs, there are a few questions we get asked regularly. Here’s an overview:

  • What upfront costs will I need to pay? It depends on which facility you choose and successfully apply for, but in any case your adviser will help you determine how to pay for your accommodation. This can include a lump sum, periodic payments, or a combination.
  • How much will I pay for ongoing care? Different ongoing care costs apply for different people and facilities. This could include the basic daily fee, a means-tested care fee, and other additional fees. Strategies can often be put in place with the help of a financial adviser to reduce ongoing care costs, which could include selling the family home. Well-crafted strategies can result in improved entitlements, lower costs, and overall better outcomes. Your adviser will also help you invest your capital effectively to meet ongoing costs and retain healthy cash flow.
  • Can I keep my family home? Your adviser is best placed to outline the implications of either keeping or selling your family home. Broadly speaking, your adviser can discuss with you strategies to pay agreed accommodation payments, and explore how your home will be treated for Centrelink/Department of Veterans’ Affairs (DVA) and aged care purposes. If you sell your home, your adviser can devise the optimal strategy for balancing income requirements, maximising pension entitlements, and reducing ongoing care costs.
  • How can I maximise my Centrelink/DVA Benefits? You can work with your adviser to determine how Centrelink/DVA assets and income tests apply to you and your situation. From here, strategies can be recommended and implemented to maximise your Age Pension entitlements.
  • How much tax will I pay? Tax offsets may apply to you, and the sale of your family home can also bring with it certain tax implications. Your financial adviser can review your situation and identify these offsets and obligations, and work alongside a specialist tax adviser to develop strategies to optimise your tax position.
  • Will I have something to leave to my family? Leaving a lasting legacy is important to a lot of people, and this often includes putting aside an inheritance for family members. Start by identifying which assets you want to include in your estate, and which beneficiaries should receive those assets. Your adviser can assist with coordinating the relevant beneficiary nominations and legal requirements, so you have peace of mind knowing those assets will be distributed according to your wishes. McKinley Plowman’s Estate and Succession Planning service works with clients to do exactly this.

How MP+ Can Help

Embarking on the journey into residential aged care is a process that requires careful planning and time, and advice to manage effectively. Achieving the best possible outcome relies upon informed decision-making, which is why it’s so important to have a McKinley Plowman financial adviser in your corner. Our specialised approach to Aged Care advice goes beyond mere financial affordability – we provide a holistic view of your aged care transition. By working with our advisers, you’ll uncover strategies designed to enhance your cash flow, increase the potential value of your estate, and prioritise the aspects of care and lifestyle that matter most to you. This partnership is instrumental in ensuring that every aspect of your aged care experience is tailored to meet your unique needs and preferences. If you’re ready to take the first step, contact the MP+ team today on 08 9325 2411 (Perth), 08 9301 2200 (Joondalup), or via our website.

written by:

Nick has been in the financial services industry since 2008 as a financial adviser, and has completed a Master of Financial Planning (MFinPlan) and Advanced Diploma of Financial Services (Financial Planning) with specialist accreditations including Margin Lending and Self-Managed Super Funds.

Nick is passionate about helping individuals and families to create, grow and protect wealth so that they can focus on enjoying the things in life that are most important to them – and finds nothing more satisfying in his work than seeing clients achieve their goals – whether that’s a particular lifestyle goal, a comfortable retirement or going from financial distress to financial comfort.

Outside of work, Nick is all about family time with his wife and two young boys. Camping, four-wheel driving, Auskick coaching, surfing, swimming, and watching his beloved Manchester United.

Nick is an Authorised Representative of Fortnum Private Wealth Ltd.

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