According to the Australian Institute of Health and Welfare, 7.8% of the Australian population are aged 65 and older. This means aged care planning should be at the forefront of many people’s minds. Whether it’s care for yourself or care for a loved one, it’s beneficial to start planning early.
Discussing aged care planning can be difficult and daunting. However, no matter how young you feel, planning ahead is crucial. Not only does planning ahead mean your family will be aware of what you wish to happen, but it will also provide more choices for you and your family.
Often, people are forced to think about their aged care planning because something happens, either to themselves or a loved one. However, leaving it this late can make matters much more difficult, especially as emotions are likely running high.
When to start thinking about aged care
It may sound cliché, but the earlier you start thinking and planning the better. In terms of planning, a simple conversation with your loved ones may be enough to begin with, however, once you start approaching retirement, it’s best to get the ball rolling with implementing certain plans.
The most important element of aged care planning is ensuring that other people know your wishes so they can support you – this can be family members, friends or even a financial adviser or legal representative. The reason for this is simple: if people know and understand, they can not only help you implement everything, but they can also take care of your wishes should you be unable to.
Options for aged care
In Australia, there are numerous options available, ensuring the different care needs of each individual are listened to and met.
There are two main options: community-based aged care and residential aged care. Often, people will first call on community-based aged care before settling in permanent residential aged care facilities.
Community-based aged care
Community-based aged care refers to home-based help, meaning people can live at home independently for longer. Individuals are generally able to manage on their own but may need some help with daily tasks.
When it comes to community-based aged care, there are two main programs:
1. Commonwealth Home Support Programme – providing entry-level support services for older people who want to live independently at home.
A person may be eligible for Commonwealth Home Support if they are still living at home but in need of help to continue to live independently and are:
- 65 years or older.
- 50 years or older and identify as an Aboriginal or Torres Strait Islander.
- 50 years or older and on a low income, homeless or at risk of homelessness.
Depending on the individual needs, services that a person may be eligible for include:
- Household chores like cleaning and doing the laundry.
- Home maintenance such as gardening, changing lightbulbs or small repair jobs.
- Modification of the home to make it more manageable for the person to live there longer, including installation of safety aids such as ramps and support rails.
- Nursing care.
Additionally, the Commonwealth Home Support Programme can provide respite care so everyday carers can take a break.
2. Home Care Packages Programme – a more complex, more personalized care package. The program offers four levels of packages to support people depending on the level needed (basic, low, intermediate and high) and priority is given based on assessed need.
There are eligibility requirements for home care packages. The two main requirements are:
- You must be an older person who needs help to stay in your own home for longer.
- You must be a younger person with a disability, dementia or other special care needs that cannot be met through other services.
For Home Care Packages, there are a range of services that are on offer. For example:
- Assistance with personal activities such as showering, dressing and communication.
- Help with diet including preparing meals and assistance with eating where required.
- Transport and personal assistance with shopping, visiting medical professionals or attending social activities.
Residential aged care
This type of care means moving to a facility that is purely dedicated to caring for older people. Most people enter an aged care facility when their needs can no longer be met at their own home.
There are two types of care facilities:
- Respite care – Offering short-term care which can be classified as either low care or high care. Respite gives older people the opportunity to live in a facility for a certain amount of time, giving them and their carers the support to live at home for longer.
- Permanent care – Ongoing care in a facility, tailored to the individual’s needs.
In addition to these two options, Australians are also offered age pensions, rent assistance, disability payments, residential services, medical and pharmaceutical benefits, and home, hospital and community care support.
Having the conversation
Whether it’s having the conversation with your children about yourself, or having the conversation with your parents about their care, it can be difficult to broach the topic. However, there are some things you can do to make the conversation easier.
- Find time when you won’t be disturbed and when your attention and those you are talking to is likely to hold.
- Openly discuss your concerns and listen to the responses.
- Talk about the benefits of aged care and of getting in early. For example, not being caught off-guard if you or your loved one suddenly needs care.
- Focus on working together.
Remember, many people are anxious when the topic of aged care is brought up. For some, it’s because they fear that by talking about it, loved ones will believe they can no longer cope. Keep this in mind if you are discussing options for your loved one.
Also, it’s wise to discuss your desires with a number of people. You don’t necessarily have to discuss your decision with everyone, but there are probably some key people that need to be notified, including your family (or at least one family member), your carer and any health professionals involved in your care.
What is involved in planning?
While the processes and the costs involved with aged care planning can be overwhelming, it’s crucial to fully understand what is involved.
Prior to entering a residential aged care facility or receiving any form of community-based care, an independent assessment will need to be carried out. This identifies the type and level of care that you will need.
The costs: residential aged care
There are generally four main costs that are associated with moving into an aged care facility.
- Basic daily care – this is set at 85% of the base aged pension.
- Refundable accommodation deposit – this is payable by people with assets of income in excess of a certain amount. The deposit generally reflects the type of facility the individual will be moving into. This means for a luxury facility in an expensive neighbourhood, it’s likely that you will be paying a higher amount than a less-fancy establishment.
- Extra services facility – this may apply if you choose a more luxury facility or accommodation type and may include services such as Foxtel or an extra meal. The fee applies on a home-by-home basis.
- Means-tested care fee – while the government subsidises a lot, if your personal circumstances allow, you are expected to contribute. The fee is calculated according to the assessable assets and income of the individual entering care.
The government gives you seven days to move into an aged care facility once you have agreed to accept the spot offered. This means that even if you don’t move in after the seven days, you will still be paying the basic daily fee and the income tested fee (if applicable) from this date.
The costs: help at home
Costs for community-based aged care differ between the two main programs. For the Commonwealth Home Support Programme, no financial assessment is necessary. All fees will need to be discussed with your service provider before care begins. Home Care Packages are a bit more complex. Like the residential care, you will need to pay a basic daily fee, which is set at 17.5% of the basic age pension. You may also be required to pay an income-tested care fee if your income is over a certain amount. In addition, your service provider may request you pay an additional fee for services not covered by the package.
Start planning now
You may feel young and sprightly, but you never know what is around the corner. Having an up-to-date plan in place, and discussing these plans with your loved ones and other people involved with your care, means your wishes will be honoured should things turn sour and you can’t make certain decisions. On the flip side, if you can make the decision, being organised means things will already be in place when the time comes, making it a lot easier to put your plan into action.
If you need some help starting the planning process, Pinn Deavin can help you navigate the complex financial elements of aged care planning.