Sometimes it’s better to get specialist aged care financial advice rather than doing it yourself
At the outset it is important to point out that you should seek specialist aged care financial advice on this topic as there is no straightforward or simple answer to this question on how to fund nursing home costs.
Nursing home fees are made up of a number of different components including the Refundable Accommodation Deposit, basic daily fee, means tested care fee, and extra service or additional service fee. We’ve written a detailed article explaining the components of nursing home costs which may be of interest.
When residential aged care is required, a major decision for most people is whether or not to sell the family home. The right solution depends on your individual circumstances, but it is worth remembering that there is no requirement to sell your home to pay the Refundable Accommodation Deposit in full or in part.
(We’ve also written a detailed article explaining the Refundable Accommodation Deposit, which might be helpful in understanding your options for paying this large fee).
As we pointed out above, there is no straightforward answer to the question on how to fund nursing home costs and getting help from an aged care financial advisor will mean you are able to see multiple different scenarios and their impact on your finances, both now and in the future. They will take many things into consideration, and spend time discussing the impact of these decisions with you.
The following are the things that you must think about when trying to work out the best way to finance the Nursing Homes Fees, particularly when selling the family home is involved:
- The value of your home can impact on the amount of your nursing home costs. If, for example, the proceeds from the sale of your house are significantly more than the amount payable for the Refundable Accommodation Deposit – do you understand how this will impact on the assets and income tests (eligibility for the age pension), and on the means tested care fee?
- If the family home is sold, you will lose the opportunity for capital growth on the house in the future
- How will the family cope emotionally with the prospect of selling the family home?
- Is the family ready emotionally as some decisions need to be made quickly?
- Under certain circumstances the family home may be exempted from the calculation for the nursing home cost calculations. Do you know if this applies to you?
- It is important to get aged care financial advice at this early stage. It has far reaching implications, not only on how much you will pay ongoing for your aged care, but also what you will be able to leave for your family.
- It is important to note that the pension eligibility rules are changing all of the time and this needs to be factored into, not only the situation today, but how it will impact in the future.
- What do you do with the excess funds after paying the Refundable Accommodation Deposit, so that you make the most of the funds as a source of income to cover your ongoing care?
- How you invest, and the various structures that you use, will have a different impact on the amount of Pension you receive and the amount of Means Tested Care Fee you will need to pay.
Don’t assume you have only one choice
There will generally be other options for you to consider. Don’t assume you have only one choice. Speaking with a specialist financial adviser will help you identify all of the different possibilities.
Certainly, being able to understand whether you should retain the home and either leave it vacant or rent it out should be explored.
Both of these options have their own consequences on the pension and the means tested care fee. Sometimes there are special circumstances where your family home may be exempted from the calculation of nursing home costs.
We have written another article which may be of interest, ‘What are nursing home costs? Understand the upfront and ongoing charges‘.
The complexities of these issues makes it essential to seek advice from a specialist in Aged Care Financial Advice. It is a very complex financial problem that always benefits from an expert doing the figures and working within the rules to find the best possible approach.
If you would like to talk to someone and get advice on the best approach for you, we would be happy to assist with these complicated financial calculations.
If you’d like to talk through your options please give us call.
Claudia Rigoni from Aged Care Specialists Vic
Authorised representatives of Synchron AFSL 243313
Image sourced from https://stocksnap.io/photo/9ML7MMR8T5 under the Creative Commons license.