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Changes to pension and aged care rules pose threat for Adelaide retirees

It is now clear that modifications to the rules governing pensions and age care have just one thing to say to the public: find alternative means to finance your retirement. These latest changes to pension and aged care rules pose a new threat to Adelaide retirees – as if they needed any more!

The Abbott-Turnbull governments’ introduced programs and initiatives may not appear that substantial.  However, if one looks at the bigger picture, it’s easy to see huge cuts to government funding for older Australians.

Alterations to means-testing for the aged pension, eligibility for the Commonwealth Seniors Health Card (CSHC) and the management of the account-based pension, are all aimed at reducing public funds for retirees.

Natasha Panagis, technical specialist at advice business Strategy Steps said, “The government is pushing retirees to use their own capital to fund their retirement.”

The biggest and most contentious reduction in subsidies for senior Australians are the stricter rules around means-testing for the age pension and the level to which pension payments can be influenced by additional savings.  These two measures were introduced in the May budget and approved by parliament.

In the new Turnbull administration, the following changes will take effect in January 2017:

  • The threshold for a part pension for couples who own their home will be reduced from $1.1 million to $820,000;
  • The threshold for a part pension for single or unmarried homeowners will be reduced from $775,000 to $ 547,000.

Thus, the government has declared that an estimated 91,000 people will no longer be qualified for the part pension and an additional 235,000 people will have their pension payments reduced.

Furthermore, for every $1000 in savings a retiree is set to lose $3 in $1.50. In all measures combined the government is projected to save $2.4 billion to 2019.

All this means that the capacity of many middle-income earners to retain their current level of pension will be greatly diminished.  In order to qualify for the full pension, the value of assets retirees can own on top of the family home is expected to go up from $286,500 to $375,000.  In addition, rental income from property will no longer be exempt from means-testing for any age care payment.

Strategy Steps, in a memorandum to their clients, warned “Clients who move into care after 31 December 2015 may find it more difficult to fund their retirement if they have limited financial resources and wish to keep the family home. Financial advice around aged care funding and cash-flow management will become more critical for these families.”

The burden to senior Australians does not end there.

Starting this month, in January 2016, non-taxable superannuation income was added to the means-test for the CSHC, making it harder for older Australians to qualify for the card. The Seniors Health Card gives discounts on prescription medicines, concessional rail travel on certain lines and, depending on the state, additional health, education and recreation allowances.

In a step aimed at keeping workers in employment for longer, the age at which people can access their super savings went from 55 to 56 in July 2015 – something that is expected to rise further in coming years.

On a more positive note, the government rejected a recommendation by the David Murray Financial System Inquiry to prohibit borrowing by self-managed super funds in order to buy shares and property.

In a bonus for individuals who unwittingly put too much money into the super, starting 2015 people who surpass their annual after-tax contributions limit may choose to have the contributions and associated earnings released from their super accounts.  These excess contributions no longer attract tax at the top marginal tax rate.  However, the associated earnings will be taxed at the marginal tax rate on top of the Medicare levy.

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Super to Fund Aged Care Costs Through Home Equity?

The Association of Superannuation Funds (ASFA) is looking for ways to help its members prepare better for aged care, and according to its chief executive this may result in new home equity schemes to fund nursing home costs. 

In her address to the ASFA conference recently, Pauline Vamos noted that the government would soon experience a heavier fiscal load due to the ageing population and when this happens, seniors would be pressured to fund health and aged care costs on their own. Consequently, the association is calling its superannuation fund members to improve their planning and preparation for retirement, and the development of new financial products to fund aged care through home equity is one of the measures the association suggests.

Ms Pauline Vamos made a forecast that by 2055 aged care costs would represent an annual hit to the federal budget of $220 billion. According to a paper prepared by Ms Vamos, this would likely result in funding cuts to the sector.

The ASFA paper explores the possibility of innovating super funds by developing financial products that tap into real estate in order to release housing equity. The paper suggested mechanisms such as downsizing, equity release products, or contingent loans could be used for aged care costs.

For most retirees the home is their greatest asset. In a political environment of growing pressure on the federal budget and mounting debate regarding the fairness of government providing aged pension to wealthy home owners, the family home is increasingly being regarded as a source of funding for retirement

In 2055 when the local 30 year-olds of today are retiring in Adelaide, federal government expenditure on aged care is projected to reach $290 billion. Even if the government decides not to cut health and aged care funding, the higher volumes of seniors will inevitably mean that more people will need to find ways to fund aged care for themselves.

According to AFSA, in 2008 a woman aged 65 years had a 54% chance of needing residential aged care and men on the other hand stood a 37% chance of requiring full-time aged care (men have shorter life expectancy). Seven years later, the average woman is now facing an ‘odds-on chance’ that she will soon need to enter a residential aged care that she can barely afford.

Ross Clare, director of policy of ASFA, said that people today are more likely to have the need for aged care services because of increased life expectancy. And as people live longer, there is a higher chance that they would need greater level and quality of care, especially those who have ailments such as dementia.

It seems that perhaps more than ever, Adelaide residents need better access to financial products and services to help them navigate aged care successfully. Equity release products such as reverse mortgage should be explored by individuals as a legitimate option, but good financial advice and that plans for the future may still be the best preparation for seniors who want quality of life in their retirement years.

Regards, Carmela

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How ’emotions’ can ruin your aged care finances

There is no doubt that Adelaide families going through the transition to aged care experience a highly emotional time.

Adult children find it hard to let go of the family home, while parents often think they have no other options to fund the accommodation bond, or what is now known as the ‘Refundable Accommodation Deposit’ (RAD). This is the typical scenario for tens of thousands of Australian families who are moving to aged care every year. Sadly, as reported recently more families fall into trap of making costly mistakes because of following their emotions, instead of getting a proper financial advice.

It’s not hard to understand why. The aged care system is becoming more complex each year and while costs are fairly reasonable by international standards, many Adelaide residents and their families are shocked by the costs for nursing home accommodation  – they are not prepared for multiple layers of fees, often much more than what they had anticipated.

The recent implementation of Living Longer, Living Better reforms have taken the aged care system to a whole new level. Though many in the industry such as aged care providers are pleased with its flexibility, the public don’t seem to like the complexity and greater focus on ‘user pays’. Those who are navigating aged care for the first time must learn new terms such as ‘RADs’ and ‘DAPs’. They also need to complete a 31-page income and asset assessment form. For someone still trying to work out how to possibly raise funds for nursing home costs, this can be quite overwhelming.

Adult children usually come to the rescue and help parents decide on how to deal with the aged care finances. But most often, adult children have their own preferences and this might be a source of conflict too.

What should you do with the family home?

Most often, families get attached to the family home and find it hard to let go. Both parents and adult children understandably have a special attachment to it and this usually affects their decision on whether to sell the family home or not.

If the parent will most likely not return to the family home, then there are fewer practical reasons to hold on to it. Also, if it is valued just a little more than the accommodation bond, it is harder to justify keeping the home. However, keeping the home and raising the aged care entry fees by other means such as a reverse mortgage can sometimes be a much better financial decision.

In any case, it is important that both children and parents thoroughly understand the financial aspect of care and avoid letting emotions affect their decision-making process.

Getting aged care financial advice in Adelaide

An aged care financial advice plan does attract a cost, but it is a sound investment and will help the family avoid expensive mistakes. When it comes to your family home and aged pension eligibility, you don’t want to take chances. It’s crucial to put emotions to the side and understand all the implications of your decisions.

If you want a stress-free journey to aged care, Adelaide Aged Care Financial Advisers can help you build strategies for funding your accommodation bond. For peace of mind and informed financial decision, call us today for a free initial consultation on 1300 422 232.

Regards, Carmela

5 Reasons Why Men Resist Adelaide Aged Care Services

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Older men continue to access home care services far less than women.

New data from the Australian Institute of Health and Welfare (AIHW) shows that older women are much more likely to use home care services compared to men, making up 2 out of 3 consumers. The same report also reveals that women are also the predominant users of home care services across all package levels and ages. This gender gap is also true in residential aged and elderly services in SA and Adelaide.

Advocates for men’s health encourage care providers to address the barriers older men experience in using assisted services.  In June, Community Care Review reported on low use of aged care services among men and the need to revisit service strategies to reach them out.

But why do older men are generally disinterested in seeking help? Read on to find out.

Five Reasons Why Older Men Resist Adelaide Aged Care Services 

Exploring certain obstacles that older men experience in accessing aged care services will help you understand the gender gap. Accessing elderly care services is vital in living longer and living better, which is recommended for all regardless of gender.

Adelaide Aged Care Financial Advisers delve into the top reasons why older men refuse aged care services.

1. “Home care is too feminine.”

Older men usually value outdoor activities more than the idea of relaxing at home. This generation of men consider home care services as a domain of women, so they think that if they avail of such service, they will become less manly. This misconception could be loosely attributed to the imagery and language used by care providers in their promotional materials, where the pictures used are mostly of older women. Hence, older men think the services are not for them, particularly at community services that are often framed around activities that in the past were completely associated with women such as domestic care and chatting with friends over tea.

2. “I don’t want to rely on charity.”

Relying on charity is a taboo for most blokes instilled during their childhood. Even though aged care system is a component program of the Department of Social Services to help senior Adelaide citizens, some elderly think of it as charitable work and most men are simply not into it.

3. I’m not weak. I can live without help.”

Most aged care providers in Adelaide promote their services to assist the elderly to maintain their independence at home. But older men see this as a flawed proposition. They often ask, “how could I be independent, if I would ask help?” This contradiction is at the core of most care providers, because they are talking about the values of independence, yet they are highlighting assisted care. Even in advertisements, brochures, and catalogues, most men are depicted as weak recipients of care. This is a common barrier for older men, who likes to think that they are strong and assisted service is not relevant for them.

4. “I don’t want to be a burden to anyone.”

The older generation of men value their self-reliance and independence. Many of them worked for decades to provide and take care of their wives and children. And now that they are retired, most of them feel depressed thinking that as they age, they will become a burden to their families. Much as they don’t want help from their family or friends, they also resist domestic assistance even from professional carers. It’s often difficult for men to keep their sense of dignity when they need help in bathing or getting dressed.

5. “I wasn’t aware of Adelaide aged care services available for me.”

There are cases that older men were not able to seek aged care services because they were simply not aware of the available services for them. This is fairly common for older men with different social, educational, and linguistic background.

How to Bridge the Gender Gap

Encouraging older men to access elderly care services in South Australia takes a concerted effort of all stakeholders – the Australian government, the care providers, the families, and of course the beneficiaries.

Probably, you have been reading this because you are thinking of availing aged care services, yet you are experiencing some barriers described above. It’s perfectly fine to take hold of your old values. Your family and friends, in fact, admire you for that. But seeking help will not make you less manly, but will help you enjoy your life after working hard for years. With aged care system, you can avoid the stress and difficulties of retirement, and enjoy your senior years.

Families and friends should always encourage their loved ones to access these services. They can assist them in learning more about aged care services in Adelaide, and help them choose the most suitable type of service for them.

For its part, the Government of Australia has already rolled out the Consumer Directed Care (CDC) as basis for care providers in delivering their services. With the CDC, you can have more say to the structure and manner of the services you receive. In theory, this initiative can improve the uptake of services among older men, but of course it will still depend on how the system is actually implemented. (Also read our in-depth blog post about CDC)

Meanwhile, the official website of Australia’s Aged Care System can be accessed in other languages including Arabic, German, Italian, Spanish, Korean, Chinese, and many more. It also coordinates with the Department of Immigration and Border Protection for Translating and Interpreting Service.

Aside from complying with the principles of CDC, care providers must also be innovative in their language and imagery to increase the perceived relevancy of the services among older men. They should also offer services that are suitable for men and will not compromise their value for independence and self-reliance.

If you think you need help in understanding how your aged service is funded and how to manage your funds, please feel free to contact Adelaide Age Care Financial Advisers on 1300 422 232 for a confidential chat.

Regards,

Carmela

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Elderly falls: A major cause of preventable injury for the aged in SA

Did you know that falls were the second biggest cause of elderly hospital admissions last year? The Royal Melbourne Hospital released new statistics that re-confirm that falls are a major cause of injury for the elderly and most of these injuries happen at home. This is greater than admissions for strokes, dementia, or disease for the over 70 age group. Typical injuries sustained from a fall are sprains, bruises, dislocations, and unfortunately sometimes even death. Falls are a major preventable cause of injury for the aged & elderly in SA and Adelaide.

According to the World Health Organization, an estimated 424,000 fatal falls occur each year. Globally around 28-35% of people aged 65 and above will take a fall every year. In fact, about 10-15% of all emergency department visits have falls as the main cause. More than 50% of all injury-related hospitalisations due to falls come from people aged 65 and above. According to David Goding, Director of Morris Goding Access Consulting (MGAC), a consultancy that provides expert advice on all areas of building accessibility, there is nothing surprising about these figures.

A fall is preventable

“The number of fall incidents for the elderly could be substantially reduced by making simple adjustments in the home,” said David Goding. “The more risk factors in the home, the more likely an elderly person will fall. Minimising risk factors can be as simple as fixing hand rails in the shower, using rubber bath mats, increasing adequate lighting or checking that chair legs are stable.”

“Preventative measures are essential to wellbeing in older age. I highly recommend that anyone with concerns about themselves or a loved one, to seek an expert to review the home environment and make recommendations about changes that will reduce their risk of falls – preferably before an accident happens,” said Goding.

Tips on how to prevent falls:

Based on the data, if you are a senior or aged resident living at home, you are more likely to be at risk of a fall. Medical conditions and physical changes simply make you more vulnerable to falling.

Here are some simple tips to help you prevent falls:

  • Don’t be afraid to ask for help. If rising up to get something becomes harder, ask a housemate to get it for you or accompany you.
  • Wear the right footwear. Your fall-prevention plan starts with the right gear. Ditch those slippery shoes and wear something comfortable, yet sturdy, with non-skid soles.
  • Stretch those muscles. As long as you have your doctor’s approval, you can do gentle exercises that will improve your balance, strength, coordination, and flexibility.
  • Keep your walkways clean and free from obstruction. Hallways and stairways should be free from clutter, electrical cords, and loose rugs.
  • Use proper lighting. Stay away from dim lights to avoid tripping over hard-to-see objects. Keep your home brightly lit at all times.
  • Use assistive devices. A cane or a walker can help you keep steady while walking.

Repeated falls by an elderly person can be a sign to the family that they may need aged care. If you are in Adelaide and think your relative may need aged care soon, please feel free to contact us for help on aged care admission in South Australia.

Regards, Carmela

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Grant received for programs supporting Adelaide LGBTI inclusive aged care

The Gay and Lesbian Foundation of Australia (GALFA) recently announced a new round of funding for helping LGBTI-inclusive care in Adelaide, SA and the whole country. The funding will work as part of the Sidney Myer Fund and is intended for projects that support the healthy wellbeing of older LGBTI people in Australia.

Previous problems that hindered LGBTI seniors to fully access and enjoy Adelaide aged care services should be the main focus of any funded projects. According to GALFA director and treasurer Ian Gould, there are many LGBTI seniors who grew up in an era where homosexuality was considered taboo. Theirs has been a constant battle to achieve community acceptance and the problem can persist as they enter residential aged care. This also leads them not to disclose their gender identity for fear of rejection and discrimination.

Mr Gould pointed out that aged care providers should have an environment that welcomes and embraces ageing LGBTI people. They should have access to the same services as everyone else, without making them feel rejected or unwanted. Providers need to be comfortable that gay and lesbian couples exist and will enter their establishments.

Valued at up to $15,000, the fund is part of the Sidney Myer Fund’s Poverty and Disadvantage Small Grants Program. The grant is now on its third round and is focused on strategies and programs that address the emotional and physical nurturing of LGBTI seniors.

Applications from all areas of health and aged care are encouraged and most are welcomed. The grant is not solely intended for LGBTI-focused groups. According to Mr Gould, mainstream aged care providers could have some ‘equally good or better ideas’ that are worth exploring.

Helping Hand’s “Turn Up Your Voice” is the first funding recipient

The first recipient of the funding was Helping Hand for their program Turn Up Your Voice. The program seeks to provide a sheltered and encouraging environment for LGBTI consumers that want to access aged care. They work with experts in the field to find ways to effectively deliver proper aged care to older LGBTI people.

Turn Up Your Voice is intended for LGBTI people who may have felt rejected and discriminated in some way. The program is part of a broader plan to achieve Rainbow Tick accreditation for Helping Hand. Rainbow Tick accreditation is a set of national standards developed by Gay and Lesbian Health Victoria.

The National LGBTI Health Alliance’s Virtual Visitors

The second project funded by GALFA and the Sydney Myer Fund was the Virtual Visitors by The National LGBTI Health Alliance. Virtual Visitors is an online platform that allows building of networks in support of LGBTI seniors. This is intended for older LGBTI people who might feel isolated. One of the main causes of mental health issues is depression, which this program seeks to minimise.

How to apply for a grant?

Applications for the third round of funding are available until August 24. Forms and details can be accessed through GALFA’s website.

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Elder financial abuse in Adelaide: warning signs & prevention

Getting old can be hard. We fight for our loved ones’ care and affection and we long for somewhere to belong. We don’t want to end up alone. And no matter how old we get, we always want to look out for our children and grandchildren because they matter to us. In this context, it’s easy to understand how aged and elderly people may fall victim to financial abuse. Unfortunately, the lies and scams of some unscrupulous family members can result in older Adelaide residents losing their savings, pension, and even their house.

Adelaide elderly are at risk

Financial abuse is the most commonly reported form of abuse by the elderly with nearly 5% of elderly people reporting some form of financial abuse – and this figure expected to double in the next 20 years, according to a report. In addition, most reported cases of financial abuse take place in the home and most often are perpetrated by a family member – a reflection perhaps that most assets owned by seniors and the aged are largely managed privately. Those who have some form of disability with decision-making are more likely to be the target of abuse and therefore, at greater risk.

Below are the most common examples of elder financial abuse:

  • Taking care of an elderly person’s house sale and ‘managing’ the sale funds, in exchange for a promise to look after them  and provide accommodation
  • Threatening or pressuring an older person to sell the house
  • Threatening or forcing an older person to sign power of attorney or wills
  • Misusing the said power of attorney for improper handling of an elderly person’s finances
  • Forcing an aged or elderly person to give out inheritance earlier
  • Incurring bills and charging it to an elderly family member

Although it’s often hard to pinpoint the start of behaviour that leads to an older person experiencing financial abuse, there are warning signs and red flags to watch out for. Here are some signs of elder financial abuse:

  • Stress, fear, and anxiety experienced by the elder abuse victim
  • Unrecognised or new set of signatures on documents or cheques
  • Suspicious withdrawals from bank accounts
  • Promises of care in exchange for money or transfer of property
  • Sudden inability of an elderly person to access their bank accounts
  • Accounts transferred to different bank or institution
  • Major changes in banking activities
  • Forging wills
  • Transfer of assets when an elderly or aged resident can no longer manage them
  • Missing jewellery, pieces of artwork, and anything of value

A sense of entitlement

The danger of elderly financial abuse is that most perpetrators think that they have exclusive rights to their parents’ assets and money. “It’s my inheritance anyway, I can definitely use it.” This kind of reasoning makes it hard for professionals or lawyers to take a case against the siblings, children or other family members who may be crossing the line. Actually, the victims themselves make it harder since they are reluctant to report abuse, especially if it concerns their children. An 80- or 90-year old elderly resident who has worked all their life building wealth ends up with no home or money in their bank account, and won’t realise it unless someone explains that the paper they signed is a transfer of title.

How can a financial planner help?

As finance professionals, we have a responsibility to protect our clients. Australia’s taskforce on Elder Financial Abuse (EFA) puts accountants on the frontline in helping elderly fight the abuse. Accountants and financial advisers are in a unique position to identify threats of abuse since they have detailed information on the elder’s financial affairs. One of our aims as ethical Adelaide financial planners is to make sure that clients are informed and in control of their financial affairs at all times.

If you think you may need help around elder financial abuse, please feel free to call Adelaide Age Care Financial Advisers on 1300 422 232 for a confidential chat.

Regards, Carmela

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Aged care means-test to force SA home sales, reverse mortgage?

There was some big news for Adelaide seniors in the recent Federal budget: starting next year, a new rule in aged care means testing is expected to force an increase in house sales and reverse mortgage applications amongst Adelaide pensioners and retirees.

Beginning January 1, rental income will no longer be excluded in the calculation of means testing.  The current rules allow residents to enjoy their rental income and use it directly to pay for aged care fees. Many aged care financial experts believe that this tightening on the mean testing will give pensioners limited options to be able afford aged care fees.

If you are due to enter residential aged care before the year ends (and assuming the new legislation passes in the senate), you are lucky because you will enjoy the current rule which provides a rental income exemption from means testing. If you go into a nursing home after January 1, you can expect that the new rule may drastically affect your cash position or even worse, force you to sell your family home or take out a reverse mortgage.

You are probably wondering how exactly does this change affect you? Well, let’s say you are a full pensioner that receives $22,365 worth of pension a year and has $60,000 savings in the bank. You are receiving $18,000 rental income a year and this is what you use to pay for daily accommodation payment. Under the current rule, your daily care fees will be around $17,936 per year. On the other hand, it will increase to around $25,491 a year if you calculate your daily care fees based on the new rule.

Selling your home or taking out a reverse mortgage may be a more viable option because it could give you significant budget savings. But of course, as much as possible, people often want to have the choice of keeping their family home when they make the move to residential aged care. Having the freedom to choose from a range of other options is important.  The announcement about the change in means-testing is quite disappointing. There are many aged care activists now who are questioning whether this is good policy.

The Social Security Act 1991 allows residents of aged care to rent out their home and use their rental income to pay for aged care fees. Effectively, this source of income has been exempted in the calculation of the means-tested care fee for years. But beginning next year, the new rule is set to change the way incoming residents deal with their family home.

The recent announcement came as a surprise as we expect Living Longer Living Better reforms to protect Australians and support them to hold onto the family home if they wish to. This change, however, makes us more vigilant in educating families who are about to avail themselves of aged care services. Knowing and understanding your financial options will avoid costly mistakes and will save you a lot of money.

Is your home worth keeping? Do you want to rent it out? Would reverse mortgage be enough to cover aged care fees?

We will be glad to answer your questions and sit down with you. For a free initial consultation, please call Adelaide Aged Care Financial Advisers at 1300 422 232.

Regards, Carmela

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Adelaide Elderly To Pay More For ‘Home Care Packages’?

Around 72,000 people under Home Care Packages (HCP) in Australia will experience change in the way they receive their benefits come July 1st. A new program called Consumer Direct Care (CDC) will replace the current government funded stay-at-home care schemes for the elderly. Many Adelaide pensioners and seniors will be affected by the transition. As early as now, there are debates about whether this will make them better off or not. Are the Adelaide Elderly To Pay More For ‘Home Care Packages’?

The new scheme will allow recipients more control and options on their care packages. Under CDC, the recipients will be told how much their package is worth and it’s up to them to negotiate to their care providers for the type of service that they want.

There are some care providers who are already transitioning to CDC. Although the government has guaranteed that no one will be worse off under the scheme, some still have doubts whether this move will be good or bad for the finances and cash-flow of the elderly. Those who have experienced the transition have mixed reviews about this.

Generally, CDC is good because it gives you options and a lot of seniors feel a ‘personal involvement’ in getting aged care service. One can now arrange the timing of care with a provider and schedule it in a way that is most convenient for them and their family. If for example your wife will be out for a couple of days, you can bank hours by minimising the hours a week before and then ask the care provider to render more hours while your wife is away. The CDC scheme allows flexibility and the ability to discuss issues with the care provider and come up with solutions that are beneficial for the recipient.

On the other hand, the problem arises when it comes to the financial side. Admittedly, the government funding seems insufficient and groups like Combined Pensioners and Superannuants Association (CPSA) believes that CDC has missed out one major concern:  cross-subsidisation. In effect, those with lesser needs will have to ‘subsidise’ those who are in need of more intensive care.

This July, the funding will go directly to the recipients and it’s up to them how they will use it. There are some who complain that they are losing out on CDC. For instance, a 99-year old mother who recently transitioned to CDC can only afford 9.5 hours worth of home care, as opposed to the previous 19.5 hours she was getting under HCP. This 10-hour reduction will cost her and her family $1,500 a week and $78,000 a year if they want the same level of care the HCP gives.

For now, that family is left with no choice under the new scheme. Are they better off? Certainly not. Now they have to pull out their resources just to meet their mother’s aged care requirements. The daughter said that perhaps it’s time to sell some furniture.

If you are in Adelaide or SA and you think you need some advice about your aged care, please feel free to call Adelaide Aged Care Financial Advisers on 1300 422 232.

Regards, Carmela

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Adelaide Faces Financial Implications Of Two-tiered Aged Care System

A two-tiered system in residential aged care appears to be emerging in Adelaide and South Australia, according to a new study.

Today, for-profit providers are seen dominating the major cities, while non-profit providers are positioned in regional and remote locations. According to the Department of Health and Ageing, for profit-providers have grown more than twice the growth of the non-profit providers over the last 10 years. The numbers of aged care beds in commercial sector have increased by 46 per cent too, while the non-profit sector only experienced a slight increase of 19 per cent. What we see here is that Adelaide Faces Financial Implications Of Two-tiered Aged Care System

Although an increasing number of aged care providers is great to have in order to accommodate the growing ageing population, the question is will a two-tiered system deliver the same quality of service? These are the two major points that concerning for future nursing home resident: 1) for-profit providers generally offer lower quality of aged care, and 2) lower quality means more expensive aged care cost. Why is it more expensive? Because you are getting less of what you actually paid for.

Lead researcher Richard Baldwin of University of Technology confirmed and provided a study that for-profit providers offer lower quality of aged care. Also, the commercial sector was proven to have lower nurse to patient ratios. This means they have higher risk of not meeting the minimum quality standards in aged care. And if residents don’t get the level of quality they desire, the tendency is to ask for extra ‘luxury’ services, which will result to higher additional service fee and a more expensive aged care cost.

With all these concerns growing, the government keeps mum about their long-term vision for residential aged care. Although we cannot confirm if the two-tier system is the direction we are going to in aged care, the numbers do not lie. For-profit providers are dominating the market and we need to prepare ourselves for the implications. If you are following Adelaide Aged Care Financial Advisers’ blog, you will know that we are serious about making people’s journey to aged care easy and stress-free.   That’s why we urge you to plan ahead, so you make wise financial choices and afford the kind of aged care service that you deserve.

We are here to help you get started! For a free initial aged care advice consultation, you can call 1300 422 232.