It’s almost inevitable that you or someone you know and care about over the age of 70 will require Aged Care services. Statistics prove that approximately 45% of people over the age of 70 will use an Aged Care service.

Aged Care isn’t cheap, accommodation bonds/deposits for assisted living are around $300,000. And as of 1 July 2014 there are going to be some significant changes to the rules for Aged Care, which without proper advice and guidance could result in higher ongoing care fees.

Things you need to know before moving, or assisting someone moving, into Aged Care:

Moving from home
When moving into an Aged Care residence, you need to determine whether to sell or keep your existing house. While there are a number of factors that will impact your decision, it is important to know that keeping or selling your house can affect your ongoing care fees if you enter an Aged Care facility on or from 1 July 2014.

Prior 1 July, if you keep your house, it is not included as an assessable asset when determining your ongoing care fees.

However, from 1 July 2014, up to $144,500 of the value of your house will be assessed as an asset in determining your ongoing care fees, unless it is occupied by a ‘protected’ person, for example your spouse. If you sell your house, all of the proceeds will be assessed to determine your ongoing care fees. This will need to be considered in conjunction with the demands of keeping the house, such as ongoing expenses and upkeep.

Paying for accommodation
From 1 July, you will have 28 days after entering an Aged Care residence to determine whether to pay for your accommodation as a refundable accommodation deposit or a daily accommodation payment. Your choice can have an effect on your financial assets, which can then influence how much you pay for your ongoing care fees.

Pre 1 July, you usually pay for accommodation as an accommodation bond if you’re entering a low-level care facility or as an accommodation charge if you’re entering a high-level care facility.

From 1 July, the distinction between low-level care and high-level care will be abolished and you’ll have the option to pay for your accommodation either as a refundable accommodation deposit or daily accommodation payment, regardless of the type of facility you enter. The refundable accommodation deposit will be assessed as an asset to calculate your ongoing care fees. Aged Care facilities will also be required to publish their accommodation prices and are unable to charge more than the published amount.

Investing money
Your financial assets are assessed when calculating your ongoing care fees, so a clever investment strategy can possibly reduce the amount you pay.

Pre 1 July, only your income is assessed to determine your ongoing care fees.

From 1 July, your assets in addition to your income will be assessed when calculating your ongoing care fees.

Note: People currently living in Aged Care facilities or receiving in home Aged Care services will not be affected by the above changes until they change their current arrangements.

Why are these changes so important for you?
A move into Aged Care usually happens in a hurry and with emotional turmoil, planning ahead can help to improve the situation and avoid family conflict.

The costs for Aged Care are increasing and with an ageing population we all need to think more carefully about how to ensure our loved ones can access the help they need.

The decisions you make can have a significant impact on your loved one’s lifestyle and comfort, their entitlement to the age pension and the fees paid to Aged Care facilities.

We can help you make these important decisions, please contact us today for a complimentary initial discussion on 02 4962 4440, email: or visit our website

Disclaimer: This editorial provides general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your particularly investment objectives, financial situation and individual needs. Charter Financial Planning and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this editorial. Charter Financial Planning Limited ABN 35 002 976 294 AFSL Licence No. 234665. Principal Address 750 Collins Street GPO Box 2830AA Melbourne VIC 3000.

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