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

senior woman's hand writing bank check

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


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


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


Financial Fears: Adelaide Seniors Losing Accommodation

As a home owner, you have options to sell the home, borrow money against it, or rent it out to pay for your residential aged care fees.  But what if you are a retiree who doesn’t own your own home and needs to have a part-time job just to be able to afford rent? This is far from ideal, but the number of seniors in Adelaide & Australia facing this financial fear of losing accommodation continues to increase.

Since there is little or no legal protection at all for elderly tenants who are living in boarding and lodging accommodation, seniors who rent are afraid of being homeless and getting evicted anytime their landlord wish to. In fact, according to a recent research, bullying of senior tenants is prevalent nowadays. Landlords and management feel entitled to be above their tenants and thus, seniors are frequently afraid to voice out their concerns or ask for repairs. Doing so will make them at risk of getting evicted or receiving rent increase.

This is a national concern since the number of seniors living in rental accommodation is growing. Aside from not being given proper aged care, these seniors are living in fear of not having a shelter in case they run out of funds and can’t work anymore. A research facilitated by the University of Western Australia’s Law School strongly suggests that state laws governing family accommodation should be amended as soon as possible. The research also gave recommendations to increase awareness and educate older people about their choices on accommodation.

The fear of not being able to pay rent is not the only problem arising when seniors or the aged are staying in a rental accommodation. They also fear that they can be evicted at any time because of lack of rules that protect them. Thus, a way of securing tenure should also be adapted in upcoming laws.

Consider this scenario: A senior couple, who are renting accommodation have to work part-time to supplement their age pension to be able to afford the rent. Aged 72 and 76 respectively, the couple is in a position where they should be enjoying their retirement and not worrying about their rent. They could have had an affordable housing supplied by the government, but they have been told that they are not earning enough to qualify. They sought another option through state housing, but they were also declined because they are apparently earning ‘too much.’ This has left the couple with very limited options and thus, they succumb to renting accommodation – even in extreme old age.

This is not new. There are many Australians who are in the same situation as this couple.  And with the rise of baby boomers ready to retire soon, we should be prepared to create a community wherein seniors have the chance to have a dignified and secure retirement.

This is also why, no matter what age you are, you need to start preparing for your future years now. It is never too early to plan your finances and get advice regarding your financial options. If you want to a comfortable retirement, you need help to get it right. For expert aged care advice & retirement planning in Adelaide, you can call us at 1 300 422 232.

Regards, Carmela

House for sale aged care

To Sell or Not? Aged Care Fees & The Family Home

When it’s time to move into aged care facility, older Adelaide residents face a difficult decision—to sell or not to sell the family home.

Selling the family home has in the past been the obvious choice for many; the proceeds of the sale being used to pay for aged care entry fees. Although it remains a popular option for many Adelaide families, the new aged care reforms are changing the game. Suddenly, it’s not just about being able to pay the accommodation bond anymore.  Under the new set of reforms, you must pay the Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP) upon entry to a residential aged care, plus the Basic Daily Fee and often the Means Tested Care Fee once you are receiving care.

To sell the family home and use the proceeds to pay the nursing home fees might still be the best choice. However, if your house  is valued a lot higher than the cost of the bond, it may be better to keep the home. The truth is there is no one rule of thumb to guide everyone in making the decision. Every one has different circumstances, source of income, assets, and value of home. Not to mention that different nursing homes charge different ‘RAD’ or ‘DAP’ entry fees. It is such a complex decision that financial advice from a specialist aged care financial planner local to Adelaide is usually a wise investment.

Aside from the accommodation bond (now called ‘RAD’ or ‘DAP’), you also need to consider funding for the Basic Daily Fee, which is valued at $46.50 as of July 2014. This pays for your basic daily living expenses. The Means Tested Care Fee is a further charge that is means tested against your assets and income. In addition to this, there may also be an Additional Service Fee, which nursing homes can charge for extra services and luxuries you choose while you are in an aged care facility.

As this article illustrates, the Means Tested Care Fee can actually work in your favour and give you good financial reasons for holding on to family home. The Means Tested Care Fee considers any upfront payment as an asset, while it only includes the first $154,179 of the value of your home.

If you decide to keep your home, you must also consider if it can be rented out easily or it needs extensive work or renovations. This is important because depending on the way your aged care costs have been negotiated, you might need to rely to rental income for the cash flow required to cover aged care fees. If you think the value of your home will increase significantly in the years to come, renting it out can be a more viable option for you than completely letting go of the house through sale.

Whether you decide to keep or sell the home, it’s also usually a good idea to consult your family members. Although it may make financial sense to sell, emotions can often come in to play and family may not be comfortable renting it out to strangers or disposing of the property in a sale. Sit down together and discuss your options. If your spouse or carer still stays at home the decision might be more complex still, so don’t be afraid to seek professional aged care advice to weigh all the options.An aged care financial adviser can often answer your questions and explain the implications of your decision. If you decide to keep the Adelaide home, your financial planner can help you make a plan and formulate strategies to fund your aged care fees.

It is often a highly emotional time whenever a family member is making a transition to a nursing home.  But with proper planning and preparation, you can have a stress-free journey to aged care. If you want a guide for your journey to aged care and avoid costly mistakes, call us today at 1 300 422 232. 

Regards, Carmela

rising aged care costs 2014

Living Longer, NOT Living Better: Aged Care Act Hits Adelaide

Last 1 July, 2014, the Living Better, Living Longer reforms became law. This has brought extensive changes to the aged care system in Adelaide and South Australia, and potentially has a huge impact on the finances of aged care residents and their families.

While the objective of these changes is to have a sustainable and more efficient aged care system in the long term, many Adelaide people fear that this will make accommodation costs rise. If that were the case, people will be living longer, but not living better. On the other hand, this new legislation addresses key challenges that the South Australian aged care system is facing now:


  1. Rapid increase in ageing population. In the next 20-30 years, a huge number of baby boomers will retire and many  will need proper aged care services. This will be a major shock for the national aged care system since every year, 200,000 of these baby boomers are expected to crowd the nursing homes.
  2. Living longer. Aside from the increasing number of ageing population, people have increased longevity too. This means that seniors will stay longer in aged care facilities and will need more care.
  3. Limited aged care facility. With demand expected to rise, accommodation supply will get tighter. The limited number of aged care beds available may not be enough for the growing number of people needing aged care.
  4. Many will prefer home care. During this shift going on in the aged care system, many baby boomers are expected to demand home care for as long as they possibly can.
  5. A decline in tax revenues. Since government expenditure on aged care is already significant, an increase in population needing aged care will put a strain on already tight government funding. In addition, as the working population reduces, less people will contribute to government tax revenue.

If you or your family member need aged care in the coming months, the team at Adelaide Aged Care Financial Advisers have developed a list of how this new law might affect you:

  • There is now an annual cap of $25,000 and a lifetime cap of $60,000 to means-tested care fee.
  • The low care, high care, and extra services are now abolished. There is only one level of aged care service today.
  • Residents are expected to pay more in most cases now that there is an increased means-testing. There is now what we call Means Tested Care Fee, which is payable based on the income and assets of the resident. This fee shall only cover expenses and care, and not accommodation.
  • Entry-fees as a lump sump are now payable for all residential aged care. This is called Refundable Accommodation Deposit or RAD. This is the accommodation bond you pay the facility upon entry and refundable after you leave the nursing home. You can also pay it in the form of Daily Accommodation Payment or DAP.
  • Each resident should pay a Basic Daily Fee of $46.50 at present.

Although these fees can be complex and confusing, a good aged care financial adviser can help you in planning your finances. Adelaide Aged Care Financial Advisers specialise in aged care and can help you make the most of your finances to successfully fund your aged care fees. Call us today for a FREE initial consultation on 1300 422 232.

Regards, Ben


Getting To Know ‘Aged Care Assessment Teams’ SA (ACAT)

Most families go through a confusing time whenever a loved one needs an entry to residential aged care. The good news is, your local Aged Case Assessment Teams in SA will help you get started on your journey to aged care. The first thing you need to do when you are considering moving to a residential aged care facility is to visit your local Aged Care Assessment Team or ‘ACAT’ as they are known.

The Aged Care Assessment Teams in SA or Adelaide are usually located near hospitals and assessment is done by a doctor, nurse, or a social worker. They are the ones who will determine if you are eligible for aged care. Though they might suggest several aged care facilities in your area that are suitable for you, your family is still the one responsible for arranging your entry to your chosen residential aged care facility.

Search for your local SA ACAT here.

Whether you think that staying in a nursing home is for you or not, it is important that you still consult with ACAT because they can help you assess what kind of Home Care packages you might need. Several types of services are offered in Home Care packages, including, but not limited to:

  • Personal services – help in daily personal routines such as bathing, dressing, and mobility
  • Support services – general help with basic house maintenance such as cleaning, washing and ironing, or transport for doing groceries and visiting your doctor
  • Clinical care – involves nursing and health care support like physiotherapy

Trigger events that require immediate attention of ACAT

While you need an ACAT assessment when you want to access aged care services or receive certain home services, there are some trigger events that require immediate attention of your local ACAT. Get in touch with them as soon as possible if any of these events happen:

  • Stroke
  • Heart Attack
  • A fall at home
  • Early signs of dementia
  • Recovering from surgery

In events like these, ACAT might recommend care alternatives like respite care, low level residential aged care, or high level residential aged care.

As soon as ACAT assesses and recommends you need aged care in any form, it is important that you seek financial advice right away. Adelaide Aged Care Financial Advisers is here to help you plan your finances and avoid common mistakes you could make on your aged care journey.

Regards, Jonathan


Adelaide Residents Get Local Aged Care Financial Planning Help

After a intense period of preparation, we’re excited today to announce an important new service to Adelaide residents. With the launch of Adelaide Aged Care Financial Advisers (AACFA) Adelaide residents finally get the local aged care financial planning help they need.

AACFA is a subsidiary of one of Adelaide’s most respected financial planning firms, HSW Financial Advisers. Aged care and aged care financial advice hold a special place in the heart of HSW Financial Advisers. As a local financial advice practice of 25 years experience, we’ve helped many families get through the difficult times when a loved one enters residential aged care.

Finding a suitable nursing home for your mother, father or relative  is a challenging task in itself. But when you do finally find something you like, you’re often then presented with pages and pages of forms, paperwork and a request to pay $300,000 (or more) in Refundable Accommodation Deposit (RAD).

It is a confronting time for family, and often  a confusing time too. Aged care providers are not licensed to give financial advice, and so are limited in the assistance they can give. Most of the time, you are not presented with financial options and since you only want the best for your loved one, you may be forced to sell the family home to pay for aged care entry costs such as Refundable Accommodation Deposit (RAD), when there may be better alternatives.

With the recent changes in aged care law, more than ever before Adelaide residents need aged care financial planning.  Although there are many financial planners out there, an aged care financial adviser is needed to address specific aged care needs, costs, and fees. Entry into aged care is a complex process and managing the finances and payment of fees for the best possible outcome takes considerable skill. Having a financial planner that is aware of any ongoing aged care legislation changes, means they can ask you the right questions, and ultimately save you money.

Here are a few of the main reasons why Adelaide nursing home residents may need specialist financial planning. Aged care financial advisers offer the following benefits:

  • understand the emotional challenges residents have to go through
  • know the possible impact on tax and pension benefits of every decision
  • understand the ongoing aged care legislation
  • know how to minimise the Means-Tested Care Fee
  • can explore different ways to fund the RAD
  • have the necessary skill to negotiate on your behalf for savings on nursing home costs

Adelaide Aged Care Financial Advisers are now ready to offer the advice local families need. Our team specialise in personalised aged care financial planning and our financial advice is exclusively tailored to reach your unique financial objectives and goals.

Whether it is for you or for your loved one, Adelaide Aged Care Financial Advisers is here to assist you in your aged care journey.

Give us a call today on 1300 422 232 and schedule an initial consultation—absolutely free!

Regards, Eve