Planning aged care for your loved ones can be quite confrontational and emotionally draining but it cannot be ignored. Lack of planning can leave you and your family exposed should an elderly loved one have a medical crisis.
Aged care is almost inevitable
It is a common misconception that when one retires, expenses go down. Studies have shown that while living expenses such as supporting children are no longer being paid, your age will catch up to you as your physical and mental health will inevitably deteriorate, leading to larger medical bills.
From retirement, you will go through the following progression for aged care assistance:
Stage 1: No care is required, and you can perform the activities you wish to do.
Stage 2: You require some assistance with small tasks such as with meals or chores.
Stage 3: You start to develop severe disabilities and can no longer look after yourself with specialised care, which is where aged care comes into the picture.
Pre-planning is key
Pre-planning is necessary. As aged care is such an emotional subject, you should involve the whole family to minimise the issues that can arise. Lack of planning can lead to:
- Failure to get into a quality home that has the necessary facilities to properly care for your loved one’s needs
- Failure to source the necessary finances to afford aged care
- The separation of your loved ones due to restricted placements in the one aged care facility
Planning can be difficult as aged care homes themselves don’t understand finances. However, seeing a specialist may be your best point of call. A specialist can discuss with you how to structure your finances to pay Refundable Accommodation Deposits (RAD), manage the cash flow of future payments and ensure your loved one’s wishes are being met.
Also ensure that you have the proper Powers of Attorney assigned so that if any medical crises occur, decisions can be made.
Assessing the right place
Assessing which facility is right for your loved one can be challenging. To ensure you have a comprehensive understanding of the facility to make the most informed decision, follow these tips:
- Go in and visit the home but don’t go at times they suggest for you to go. Go at meal or activities time so you can see what the services are really like. This will not only give you the perspective of what meals they prepare and how they engage their residents
- Ensure they have special care facilities and specialist programs for conditions such as dementia or mobility issues
- Visit on the weekend to assess what the staffing is like
If you are still unsure, there are also third parties that can help assess the facility for you and provide a professional opinion.
Managing the financing
The most common method of paying for the initial RAD is selling the family home. While the costs are considerable (RAD’s typically range from $350,000 – $1.2 million), you do not always have to go down this route. There are various payment options, which include upfront payments, daily payments or a mixture of the two.
What is most crucial is cash flow. It is important to note that the RAD is just for the accommodation, you still must pay for daily care, and may have to pay an additional means-tested amount. Most facilities have extra service payments that can vary from $20 to $150 per day. This makes it important to have a financial plan in place. Sitting down with an expert to model out the financing for your payments can help to provide peace of mind for you and your family. They can help to balance all factors that go into the decision-making process, as more than just finances will need to be considered.
Discussing aged care is never easy. You will have heart-wrenching conversations, but they must be had and the earlier you start the better. For expert advice about planning for aged care and organising your family’s finances speak to our specialists at Morrows.