Major reforms to the aged care system are set to kick in on 1 July 2014. The financing arrangements have been revised, and will affect those who enter residential aged care on or after this date. Those who enter before that date will continue under their existing arrangements.
- If a family member needs to go to residential aged care this year, it is worthwhile getting advice to determine if they will be better off (financially) going in under the current rules prior to 1 July 2014. Of course, this isn’t just a financial decision, but in many cases in-going residents will pay higher costs under the new rules. .
- The decision whether to keep the family home or sell it has always been a difficult one. In terms of the new means-tested care fee, the scales are tilted towards keeping it. This is because only a portion of it is assessed ($144,500) as an asset as opposed to all of the proceeds if it is sold. .
- Getting advice will make a real difference to the outcome. An adviser experienced in aged care matters can determine investment strategies that give the best outcome in terms of fees, structuring the accommodation payment to optimise Centrelink and DVA benefits, and investment of funds. .
- Give yourself plenty of time if you want to make the move prior to 1 July 2014. Now is the time to act as it can take time to get assessed, find a place, sell your home, get advice and move in.
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on any information posted, you should assess your own circumstances or seek advice from a financial planner and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.