Whether considering options for yourself or deciding how best to help someone close to you, residential aged care can be a complex area requiring careful thought. The uncertainty surrounding where to move, how much it will cost and where the money will come from can be overwhelming and stressful.

There are typically three steps you need to take before entering residential aged care.

Firstly, before entering residential aged care, your health must be assessed to determine your eligibility for care. The assessment can be performed by any doctor, nurse or social worker who is a member of an Aged Care Assessment Team (ACAT, or ACAS in Victoria). You can visit myagedcare.gov.au to request an assessment.

Secondly, finding an aged care facility. Make sure you find an aged care facility that you are comfortable in and that will suit your needs. You may like to visit a few different places, as you can apply to as many facilities as you like. The accommodation costs for all aged care facilities are published on myagedcare.gov.au. This website also provides a description of the rooms and services available at the facility.

Thirdly, organising your finances. Upon entry to an aged care facility, you may be required to pay either an accommodation contribution or an accommodation payment. This may involve a lump sum payment, periodic payments, or a combination of both. Some people will have their accommodation costs met in full or in part by the government, while others will need to pay the accommodation price agreed with the facility. The Department of Human Services will advise which applies to you determined by your level of assets and income at entry.

There will also be a basic daily fee to pay and there may be a means-tested care fee which is determined by your level of assets and income reassessed quarterly. Some aged care facilities offer a higher level of service or a higher standard of accommodation or food as an extra service or additional fee.

Keeping or selling your former home often forms an essential part of the strategy as does how you invest. A poorly structured and executed plan can result in lower Age Pension entitlements and higher ongoing care costs. Your adviser can walk you through the options and any implications. For example, if you keep your home, we can discuss strategies to pay the agreed accommodation payment and explain how your home will be treated for Centrelink/DVA and aged care purposes. If you sell your home, we can also help identify the best way to invest the proceeds and get the balance right between generating an income, maximising Age Pension entitlements, and reducing ongoing care costs.

There is a lot to consider and decide upon, and with the right advice, it does not have to be overwhelming or stressful. We are here to help, so please get in touch with your adviser to discuss.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.