Choosing where to live as your care needs change.
Your living arrangements may need to change as you age. You may need a lower maintenance home, more help to stay in your home or care provided in a residential service. These decisions should not be rushed. Planning ahead will give you time to make the best decision for you.
Here are what to expect, and the pros and cons, of the main aged care choices in Australia:
Staying in your home
Most people prefer to stay in their home for as long as their health and physical ability allow.
Many people choose to downsize to a home that requires less upkeep and gardening as they get older. Friends and family living nearby may be able to help where needed.
Additional help is also available through more formal channels. The Government encourages and supports a range of community services run by private and charitable organisations to help older people to live well and remain independent in their homes.
Commonwealth Home Support Program (CHSP) offers a range of essential care services in the home to people who are mainly independent but need some simple help with daily living tasks.
These services include:
Assistance with housekeeping (such as cleaning & laundry)
Home maintenance
Personal care (help with bathing, dressing and the like)
Meals (help with cooking, delivered meals or centre-based meals)
Social support (help with banking, transport, shopping and similar tasks)
Health services (including nursing, physiotherapy, podiatry, and the like)
The Government subsidises services, but you may be asked to pay a small fee which depends on your income and the services you need. Your provider can discuss the costs with you.
Home care packages may offer a solution for people who have more complex needs but can remain living in the home rather than in a residential service.
There are four levels/types of packages for assistance. The services in each package are similar to CHSP services but are coordinated and tailored to suit your specific needs, including:
Personal care
Support services
Clinical care
These packages are most likely to suit someone who lives with their spouse or another family member who can help with daily care.
You will also need to be assessed and approved by an Aged Care Assessment Team (ACAT or ACAS in Victoria). Once approved, a care manager can work with you to plan your package.
The Government subsidises these packages, but you will be asked to pay a basic daily fee plus an additional contribution based on your assessable income. This additional fee is capped to an annual amount and a lifetime cap.
The packages are offered as Consumer Directed Care, which means you can work with your coordinator to decide how to spend the available budget.
Considering a Retirement Village
The burden of home and garden maintenance and social isolation encourages many people to look for alternative living arrangements.
Retirement Villages are aimed at people over age 55 who are looking for a lifestyle change. They tend to appeal to people who are still mobile and active and want to live independently and enjoy the comfort of knowing that additional security, support and companionship are available.
The features and amenities vary widely amongst villages. Tennis courts, swimming pools and restaurants may be available in some complexes. You will need to ask questions and carefully choose the village that best caters to your interests, needs and budget.
Accommodation can be in the form of a unit, villa or house within the complex. Some newer complexes also offer serviced units with fees covering meals and cleaning services (assisted living).
Residents generally don't own their dwelling but, in most cases, pay for the right to live in the village through a lease or licence arrangement. In some cases, you may own the dwelling but rent the land it sits on.
You can generally expect to pay an entry contribution, ongoing service charges, and exit fees, but the amounts can vary greatly, so check contracts carefully.
It may be wise to ask your lawyer to review the contracts before you commit.
The Government does not subsidise retirement villages, so you will need to budget for the total amount. However, you may still access the subsidised home care services.
Making Wise Aged Care Choices
Before deciding to live in a retirement village, it is wise to consider your needs in the future. If there's a risk that money may get tight down the track, you should be aware that it's unlikely you will be able to rely on a reverse mortgage to release any capital tied up in your village unit. In most retirement villages, you don't legally own your dwelling, and therefore it can't be used as collateral for a mortgage.
Additionally, if the level of care you require is likely to increase steadily in the short term, buying into a retirement village may not be in your best interests unless it can cater for your changing needs, and your family may not be able to move in with you.
If there is a strong likelihood that your needs will soon change, be sure to evaluate all your care options to ensure you make the best choice.
Bill Savellis
Senior Financial Adviser
Having navigated the Aged Care landscape for both of his parents, Bill understands how challenging it can be to make the right decisions for your future care needs. That's why he believes that everyone should have access to financial advice during this time. Bill has been a Financial Adviser for over 22 years, and is passionate about helping others access the financial advice they need. Drawing from his own experience in the financial sector, Bill develops strategic, personalised plans to support transitions to Aged Care or Home Care.
Disclaimer: Prepared without taking into account your objectives, financial situation or needs. Before acting on any information in this article, Olive Grove Financial Advice recommends that you consider whether it is appropriate for your circumstances. Information in this article was correct and current as of 22 February 2022. Olive Grove Financial Advice is operated by Bill Savellis through The Financial Advisor (Australia) Pty Ltd ABN 72 619 546 431, who is a Corporate Authorised Representative (No. 1278394) of Havana Financial Services Pty Ltd.
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