Preparing for your parents’ entry into aged care 24



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As financial planners, we’re increasingly assisting with the decisions around moving into residential aged care.

More often than not, at least one of the person’s children have taken responsibility for getting the move and the financial decisions around this organised. Usually this is because it’s their mum or dad’s reduced capacity to look after themselves that is behind the need to move into full-time care.

There can be time pressures as well. Mum or dad have suffered a more immediate health event which has seen them taken to hospital, and the medical staff, having treated the emergency, advised that your parent should be in full-time care – and they need their hospital bed back.

So what next?

The first step is for your mum or dad to be assessed by the Aged Care Assessment Team – it’s likely that the support team the hospital will have already given you some assistance with this.

Next you’ll need to find a residential aged care provider with an available bed. You can search for a list of aged care homes by location on the Australian Government’s My Aged Care website.

From 1 July 2014, all residential aged care providers are required to publish the amount of the Refundable Accommodation Deposit for their rooms – most will have done this on their own website or otherwise can provide a standard information sheet on request.

What are the financial considerations?

The cost of mum or dad’s care is subject to a number of means tests which vary quite a lot depending on their assets and income.

You (on mum or dad’s behalf) will need to submit a request for an assessment from the Department of Human Services – you can find the form here

So one of the first things you might need to do is figure out what they actually have. Some useful sources for this information are:

  • Previous declarations made to Centrelink or Department of Veterans’ Affairs if your mum or dad was receiving any sort of payment
  • Tax returns: most assets will have generated some taxable income in the financial year, so would be included in a tax return (the exceptions are usually tax-free super pensions, or insurance bonds)
  • Annual statements for tax-free super pensions or insurance bonds
  • Statements for bank accounts
  • Dividend statements for shares

A few tips

Experience in this area has left me with a few handy tips to share.

If mum or dad hold shares as an investment, it will be important to consider the capital gains tax implications if shares are sold to fund care costs. To work out this out, you’ll need to know:

  • When and for how much were the shares purchased
  • Did mum or dad purchase the shares, or were they passed to them as an inheritance from somebody else
  • Have they been adding to their holdings with a dividend re-investment plan

If your parent has been working with a tax accountant to file their annual return, they are usually the best place to start with this information.

You may also want to consider the role of the family home. For some families, retaining that specific home within the family might be an important goal, others may expect that it would be sold or rented out to fund the cost of care. If you can have that conversation with your parent and other family members beforehand, you’re in a much better position to evaluate your options.

PS: if your mum or dad has given any money away in the five years prior, even if they weren’t receiving any age pension or Department of Veterans’ Affairs payments at the time, it may still affect their aged care payments. It’s important to discuss this with your financial planner if it applies to you or your parent’s situation.

What we can help with

A financial planner can help you with a plan for your parent’s entry into aged care. The types of question you can have answered are:

  • What will the cost of care be, including means-tested fees?
  • How can assets be structured to fund the care fees?
  • What are the tax impacts of any changes?
  • How will estate plans be affected?
  • What does it mean for age pension or Department of Veterans’ Affairs payments?

Entry into residential aged care is a mixture of social security, investment and cashflow decisions on the financial planning side. Throw into the mix care decisions, family dynamics and often time pressure as well, and it’s not an easy time.

Tell us, have you moved your parents into care?

Michael Miller

Michael Miller is a Certified Financial Planner and Principal of MLC Advice Canberra. He has lectured and tutored at the University of Canberra in financial planning and economics. Michael is interested in money, human beings, and how the two interact. Financial planning is in his blood, his nan Zoe Miller made sure all her grandchildren's birthday cheques were indexed to inflation, in the name of fairness. You can hear more from Michael on Twitter (@MMillerCFP) or visit his website

  1. When I moved my Dad into aged care 5 years ago I had already sold his house so all he had was money. It made the whole process very simple. But that was 5 years ago I have been told that the process is a lot more complex now.

  2. Less than 7% of senior Australian’s will end up being ” placed” permanently into residential aged care -more and more, we will see residential care being used as a short term respite option during periods of unwellness/recuperation or for end of life care – this constant reference to being ” put” into a home is outdated and does not reflect the wishes of the vast majority of senior australians.

    1 REPLY
  3. When my mum was attacked in her home about 3 years ago, I had to move into her home as she refused to go into a home. It has been difficult as I am for clean, uncluttered and mum was a hoarder. She didn’t have a working hot water system, half the stove worked, no shower, lots of clutter and floor coverings that had been there for 50 years. I got the front room, my bedroom, bathroom, some of downstairs cleared and some of the kitchen done before she was up and about. She complained loudly about my changes and said she hated it, the police liaison officers spoke to her and said these things needed to be done. I have since given up with anymore changes. She is too strong willed to go to a home and I want her last years to be uneventful .

    11 REPLY
    • Cathy’s mum had a terrible beating she showed me a picture of her, I don’t how anyone could do that, thank God she has you Cathy xox

    • My grandma is a very great woman ❤️
      She does everything for everyone and never expects anything in return. So looking after her mum is just another thing she does from her selfless heart.

      See grandma, I can see the things you write 😏👌

    • I know I do ❤️ all my friends want her to be theirs. I refuse to share. I’m an only child, so I don’t share 😏 Hahahaha.

    • you don’t know how much this is making me laugh, I have an only child and he sounds very much like Anique, I felt very guilty I could not have any more children so apologized to him when he was in his teens, he said that is ok mum, you didn’t have a stupid son, I know that if there were more of me I would have to share..I am happy as it is 🙂

    • Yes Libbi Elliot, I was an only child and I had three children but Anique is my only grandchild. It is lonely being an only child. You have a good close and humorous relationship with your son as well.

  4. Who says older Australians have to be ‘moved’ into a nursing home…. I am 66 and I did my time in hell while I was having radiation treatment for brain cancer. It took me six months of misery to get out of that hell hole and get a unit to rent in a little country town. I have my beloved old 😻 cat 😻 back and we are both very happy to be together again. If my cancer comes back and when I can no longer care for myself then I want my middle son and lovely wife to care for me like they did her Mum when she got cancer.

  5. It’s great to see more discussion about aged care, but also important to include “care at home” in addition to residential care.

    Over 830,000 older Australians receive some form of subsidised care at home, either under the Commonwealth Home Support Program (formerly HACC) or the Home Care Program. Recipients of a full aged pension will pay a minimum contribution, whilst full/partially funded retirees will pay an income tested contribution.

    For the 190,000 residents living in residential care, about 40% will be fully supported by Government, and just pay a daily bed fee. For the remaining residents, they will be asked to make a contribution to the cost of their care and accommodation, depending upon their assets and income.

    The 5 primary questions for residential aged care are
    – What are the ingoing costs
    – What are the ongoing costs
    – How do you maximise aged pension entitlements
    – How do you minimise means tested care fees
    – Do you sell the family home

    One of the new initiatives for residential aged care is the option to borrow against the family home (release the equity) to pay for accommodation and/or care, which allows the family to retain the home as part of a long term strategy.

    Paul Dwyer
    Aged Care Finance Solutions

  6. There is nothing to be afraid about entering aged care so please do not be frightened. I was totally prepared well before I came int this wonderful place.When got to the stage I could not walk and needed help with showering I knew the time had come. After my hip replacement I have never looked back and have the best of both worlds as I can now enjoy walking around the shopsetc and have regained my independence.As long as you find the right placeyou cannot go wrong.

  7. Why? there are many services that can help older people stay in their OWN homes, for many years. I have told my family that I do NOT want to ever be put in a home.

  8. It’s also difficult if you don’t have children and have to start thinking about it yourself. I had a bad fall early last year and will probably never fully recover, which has made it hard for me to do a lot of things I could this time last year. My only sibling, brother, lives far away and also travels a lot, plus he has no idea about what is involved with retirement home requirements. I am lucky to have a girl friend who went through it all with her mother and she has agreed to become my P of A and Guardian – a hell of a lot to ask of her, but she thought about if for an hour and agreed! Bless her. We’ve drawn up a list of everything that would need to be done, which should hopefully make it all a bit easier for her when the time comes.

  9. i care for my elderly mum, having worked in nursing homes ( private ones as well ) and seen what really goes on there is no whay im putting her in one

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