Navigating aged care decisions for yourself or a loved one can be a minefield. Many people fail to plan for aged care and so decisions are often made under immense time pressure and at a time when emotions are running high, a lethal combination for effective decision making.
If you are about to embark on this complex journey, here's a guide on how to navigate aged care.
Most people start on their aged care journey at home with help from family, neighbours and friends - known as informal carers. Providing aged care for a loved one can take a toll on your emotional and physical well-being. If this is something you want to be able to do in the medium to long term you need to prioritise self care to meet the demands. Respite in an aged care home is a fantastic service that is designed to give carers a much-needed break, it is also very affordable as there are no accommodation payments or means tested fees. The fee for a respite stay is set at 85 per cent of the age pension, currently $62 per day. If you choose to have additional services, such as a choice of meals, wine or hairdressing, then an extra fee applies.
Many people delay accessing a home care package because they think that when they need it, they will be able to get it quickly. The reality is quite different; you need to be prepared to wait. The first wait is to get the assessment of your care needs, known as an ACAT because it is conducted by the Aged Care Assessment Team.
This assessment is free and will normally be conducted in your home, you can have an advocate there with you and if you need an interpreter one can be arranged. The purpose of the ACAT is to work out which aged care services would best meet your needs.
It is not uncommon that you will qualify for more than one service. For example, the ACAT may approve you for a home care package, respite in an aged care home and permanent entry into an aged care home. Don't panic, just because you are approved doesn't mean you have to use the service. It just means that if you want to, then you are eligible and the government will provide funding to the service provider. Think of your ACAT like a passport.
Once you have been approved for a home care package you will join the national queue and wait for a package to be allocated to you. This can be as short as a couple of months or as long as a year. During this time it is a good idea to do your research on home care providers. A good starting point is getting a quote from a few providers for the services you want to access so you can compare. If you, or a family member, are inclined to take on more responsibility then you may want to investigate self managing your home care package.
The means testing arrangements are different for residential aged care and home care packages. In home care, means testing focuses solely on income. Full-age pensioners are exempt from income-tested care fees, while singles earning more than $32,820 a year and couples with incomes exceeding $25,420 a year or $32,196 a year for couples separated by illness may incur fees of 50 cents per dollar above the threshold, capped at $6662 a year for part pensioners and $13,324 a year for self-funded retirees.
Residential aged care means testing uses the same income test and an assets test. The asset test exempts the first $59,500, with assets between $59,500 and $201,231 assessed at 17.5 per cent, those between $201,231 and $484,694 at 1 per cent, and assets above $484,694 at 2 per cent. If the means-tested amount falls below $68 per day, individuals are classified as low-means residents and receive an accommodation supplement. However, if the means-tested amount exceeds $68 per day, individuals pay the market price for accommodation plus any amount above $68 a day as a means-tested care fee. The means-tested care fee is capped at $33,309 a year, with a lifetime cap on means-tested fees across both home care and residential aged care set at $79,942.
The most common financial trap that people fall into when working out how to fund aged care is rushing to sell the home. The home receives special treatment for both aged care and pension means testing which cannot be applied to any other asset. For aged care means testing the home is exempt if a protected person lives there, this includes a spouse or dependent child and in some cases a carer or close relative. When the home is assessed it is only included up to a capped value of $201,231. For pension purposes, the home is an exempt asset while your spouse lives there and then for two years after the last person leaves.
The biggest mistake people make is failing to plan for aged care, thinking that talking about it is a "slippery slope to a nursing home" or they are going to start receiving care before they are ready. Rest assured you are in control and the sooner you start on this journey the more options you will have.
- Rachel Lane has specialised in retirement living and aged care for 20 years, she is the principal of Aged Care Gurus and the co-author of Downsizing Made Simple.
