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By Kristy Hatcher, Wills & Estates Litigation Lawyer, Owen Hodge Lawyers
Image by Sabine van Erp from Pixabay
This article provides a comprehensive overview of aged care, focusing primarily on residential aged care homes. It outlines the types of care available, the associated costs, and the steps involved in accessing aged care services.
Types of Aged Care
While various support services are available for those experiencing difficulties with independent living, this article concentrates on aged care homes. These facilities cater to individuals who require round-the-clock support and can no longer live independently.
Aged care homes offer a range of services, including:
- Accommodation: A private room with all necessary furnishings.
- Hotel-type services: Meals, laundry, and social activities.
- Personal care services: Assistance with bathing, dressing, and other daily tasks.
- Clinical care: Physiotherapy, nursing, and other therapy services.
There are two main types of aged care homes:
- Government-funded: These homes receive subsidies from the government, making them more affordable for many people.
- Non-government funded: Residents in these homes must cover all costs privately.
To access government-funded aged care, an ACAT (Aged Care Assessment Team) assessment is necessary.
Changes to Aged Care
The aged care sector is undergoing significant reforms, with new legislation expected to be implemented from 1 July 2025. These changes include:
- Increased accommodation costs: The cap on accommodation deposits will increase from $550,000 to $750,000 in January 2025 for those entering care after that date.
- Partial retention of accommodation deposits: Aged care homes may retain up to 10% of the accommodation deposit when a resident departs.
- New means-testing system: Details are still being finalized, but this will affect how much residents contribute to their care costs.
- Standards and regulations: Revised standards, a national registration scheme for Aged Care workers, and increased transparency will be introduced to maximise care quality.
Accessing Aged Care
The process of accessing aged care typically involves the following steps:
- Obtain an ACAT assessment: Apply for an assessment through the My Aged Care website.
- Find a provider: Consider factors such as location, services offered, quality of care, and cost. The My Aged Care website provides a list of providers.
- Negotiate accommodation fees: Work with the provider to determine the best payment option for your circumstances.
Costs of Aged Care
Three main types of fees apply in aged care homes:
- Basic daily fee: A maximum of $63.57 (as of September 2024) per day, covering hotel-type services. This fee is set at 85% of the single person rate of the basic pension.
- Accommodation costs: Vary depending on the room and the resident’s means assessment.
- Means-tested care fee: A maximum of $417.41 per day, based on the services received and the resident’s means assessment.
Funding Aged Care
Navigating the costs of aged care can be complex. It’s essential to seek expert advice to determine the best way to fund your care. Factors to consider include your income, assets, and eligibility for government assistance.
Funding Aged Care can be complex, with various options to consider:
- Selling the family home: This provides immediate funds but may impact inheritance.
- Renting out the home: Generates ongoing income but may have tax implications.
- Leveraging home equity: Options include loans and reverse mortgages.
- Family support: Adult children may contribute to the accommodation deposit.
Tips for the Aged Care transition
- Focus on financials early: Understand your financial position and how you will fund aged care well in advance.
- Seek expert assistance: Consult with financial advisors and legal professionals to navigate the complexities of aged care.
- Choose an aged care facility carefully: Consider the quality of care, services offered, and location.
Legal considerations
Navigating the legal aspects of Aged Care is equally important. Key considerations include:
- Aged Care agreements: Understand the terms and conditions of resident agreements, accommodation agreements, and extra services agreements.
- Estate planning: Evaluate the impact of Aged Care decisions on your estate plan, including wills, powers of attorney, and enduring guardianship.
- Security options: Be aware of potential caveats, guarantees, and indemnities that Aged Care facilities may require.
- Additional services: Factor in the cost of extra services not covered by the basic fees.
- Room changes and security of tenure: Understand the circumstances under which a resident may be moved or asked to leave.
- Complaints resolution: Familiarise yourself with the facility’s complaints process.
Seeking Professional Advice
The decision to move into Aged Care is significant, with far-reaching implications for both the resident and their family. Seeking professional advice from both financial and legal experts is essential to ensure informed decision-making.
Financial advisors can help:
- Achieve income and estate planning goals.
- Address concerns about the aged care process.
- Explain the different fees involved.
- Identify ways to reduce costs.
- Manage age pension paperwork and assessments.
Legal experts can assist with:
- Understanding legal obligations and responsibilities.
- Reviewing and negotiating aged care agreements.
- Updating estate planning documents.
- Addressing potential conflicts of interest.
- Protecting resident rights.
Planning for Aged Care requires careful consideration of both financial and legal aspects. By seeking expert advice, understanding the available options, and staying informed about the changing landscape of Aged Care, individuals and families can navigate this complex process with greater confidence and ensure the best possible outcomes.
About Kristy Hatcher
Kristy Hatcher is an accomplished Estate Planning Solicitor with Owen Hodge Lawyers. With an impressive reputation that stems from her extensive experience, Kristy’s credentials include a Master of Laws specialising in Wills and Estates. Kristy uses her experience and specialty to achieve outstanding results for her clients.