familiar and comfortable. The thought of going to an aged care facility is traumatic. If someone you care about is no longer able to manage at home on their own but are fortunate enough to have assistance with everyday tasks such as shopping, cooking and transport to medical appointments they may be able to stay in their home longer. They may even be eligible for Government subsidised home care.
However, if they are unable to manage, in their home, you may need to help them transition into an aged care facility.
What comes next?
You can arrange for an Aged Care Assessment to determine the level of care required and the facilities that can provide this level of care. An ACAT assessment is a pre-requisite to entering Aged Care.
Once you have chosen a facility you will need to work out the finances to look at the value of the family home and other assets.
Residential aged care
If you can no longer live at home, you may choose to move to an aged care home (sometimes called a nursing home or residential aged care facility). Care is available 24 hours a day. This can be a short-term stay or a permanent move.
What you pay
If you can afford to do so, you may have to pay:
- a basic daily fee — a standard amount that everyone has to pay
- an income tested fee — an amount that will vary depending on your income and assets
- accommodation payment — an amount for your room, based on its quality, location and features
The accommodation payment is the biggest cost. You can pay this as a:
- bond or lump sum up-front, which is refundable (called a Refundable Accommodation Deposit, or RAD)
- daily amount (called a Daily Accommodation Payment, or DAP)
- combination of RAD and DAP
Selling or keeping your family home
You may be thinking of selling the family home to pay the bond (RAD). Or maybe you’re wondering whether it’s better to rent it out to help pay the daily amount (DAP)?
You have 28 days after you go into aged care to decide how to pay for your accommodation. You must pay the DAP until the RAD is paid:
- If you decide to pay a RAD within those 28 days, you have 6 months to pay the RAD
- If you decide to pay a RAD after those 28 days, it is due as agreed between you and the provider
Either way, be aware that what you choose to do with the family home may affect the Age Pension assets test.
- If you sell the home, its value will count towards the Age Pension assets test.
- If you rent out the home, its value may count towards the Age Pension assets test, depending on when you moved into aged care.
- If you keep the home without renting it out, it is exempt from the Age Pension assets test for two years from the date that you moved into aged care. (This may vary if you are, or were, a couple when you moved into aged care.)
You may need professional financial advice to work out whether selling or renting your home is the best option. Our experienced Financial Advisors can assist here to explain how various fees work and discuss your options.