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.