When it comes to aged care – speed is of the essence

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If you’re a current full age pensioner and you need to consider moving into residential aged care, here is a salutary story about not dilly dallying when it comes to getting into action mode.

We all probably know, or at least suspect, that aged care is complicated and potentially expensive, even for age pensioners. In terms of care fees, all people moving into aged care will pay a basic daily fee of 85% of the single age pension (currently $50.16 per day). Some of us who are more well off, may also have to pay a means tested care fee. It can be up to $248 per day – yes that’s right, $248 per day. So, taking into account the basic daily fee and the means tested fee, that is a total of $2087.12 per week. Bear in mind, that doesn’t include any accommodation costs or personal expenses you may incur while living in a facility.

When you are considering moving into aged care or, as Centrelink would say, it is “reasonable to assume” you will, it can be very advisable to lodge, as soon as possible, the relevant form with Centrelink setting out your assets and income. It is very elegantly called the “Permanent Residential Aged Care Request for a Combined Assets and Income Assessment“. At some 28 pages long and with some 146 separate sections, the form is, to say the least, intimidating. However, it is what is required for Centrelink to assess the means tested care fee you may have to pay.  While you do not have to lodge the form (and some people consciously decide not to), beware, if you don’t, you will be required to pay the full means tested fee, the consequence of which is set out above.

Regrettably, many people don’t lodge the form promptly and wait till they are about to move in or even after they have moved in, before they lodge the form.  This can be bad news particularly for an age pensioner.

Why would that be?

Because, until the form is lodged and Centrelink assesses whether you need to pay a means tested fee, some age care providers will charge, and are charging, the full means tested fee, namely $248 per day even if you are a full age pensioner. This is on an ‘interim’ basis until the assessment by Centrelink is done.

Moving into aged care is up there with later life stress events but that stress soon mutates to downright distress where you have not done the proper planning for the move. These days, ‘Planning’ is a bit of a cliché, if not a discredited word particularly in the financial world, but I am a passionate believer in it especially when it comes to aged care. Getting some good financial planning advice, sooner rather than later, is crucial and not from just any old financial planner, but from one who knows about aged care.

By the way, the other by-product of not planning is that your family could collapse under the pressure. Don’t believe me? – If I had the time I could regale you with the lamentable tales of family implosion sitting on our many files. They are all the result of badly planned transitions and crisis management.

Trust me, I am a lawyer.

Brian Herd

Recognised as one of the leading experts in Australia on elder law, aged care, retirement, estate planning and disability and a regular author, broadcaster and popular presenter on many elder law subjects and issues.