The real cost of staying in your own home as you age — and how Australians are finding the money to make it work

Bina Brown is a financial journalist with a long track record of writing for leading publications including The Financial Review, The Australian, CNN.com and respected websites such as SuperGuide and UNSW Business Think. After writing about aged care for more than two decades she established her business Third Age Matters which focuses on navigating the aged care system.

Support at Home has long been touted as the answer to keeping elderly Australians living in their own home independently for longer.

Government subsidised funding packages are allocated to individuals aged above 65, following an assessment, based on their care needs.

Support at Home replaces the old Home Care Package program.

Not surprisingly, demand for funding outstrips supply. A shortage in the number of Support at Home packages, together with growing care needs, means more people can expect to use their own assets to pay for the care they need if they want to stay at home longer.

There are eight levels of Support at Home to help meet the different levels of care needs, with annual budgets ranging from $11,000 to $78,000 (before provider costs).

Package recipients make a means tested contribution towards the services they use, such as transport, social support, domestic help and gardening.

Other services such as nursing, personal care and allied health are delivered free of charge.

Broadly, the packages deliver roughly between two and 20 hours a week of help.

For many people, the 12-month wait for funding, which may not even come close to providing the care they actually need, is not an option if they are determined to avoid residential care.

They may have to look to their income and assets to pay privately for the care they need and either top up any government services they are getting or avoid the Government system altogether.

The estimated cost of services to someone needing full time care at home could be $250,000 a year. Additional costs could be superannuation, leave entitlements and insurance provisions. The overall figure could also vary depending on whether the care workers were enrolled nurses or care support.

The cost of private care through a reputable provider has risen considerably in recent years. Expect to pay upwards of $60/hour for individuals setting their own rates and at least $110/hour for workers employed during weekdays through an approved provider or agency.

If the assets or income aren’t readily available to pay for support privately, there may be the capacity to borrow.

Anyone aged 80-90 may find it hard to secure a home loan and probably a personal loan, however tapping into the equity of a home through a reverse mortgage may be an option.

With a reverse mortgage the loan – which can be taken as a regular income stream or lump sum – is typically repaid when the borrower has vacated the property or passed away.

Someone needing $60,000 over 10 years could draw down $500 a month in a reverse mortgage and expect to repay $98,000 (based on an interest rate of 8.5 per cent) when the time comes.

One consideration of accessing equity in the home to boost quality of life, is the impact a loan could have on someone’s ability to afford their possible future needs – such as moving into residential aged care.

If the goal is to age gracefully in your own home, with support and with or without government assistance, there are options available.

Bina Brown is a director of aged care solutions company Third Age Matters