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Aged Care Financial Advice
Cost Explained - Case study

Aged Care cost explained - Includes a case study.

When deciding on aged care for a loved one, the first thing you should probably think about is costs. Most people are unfamiliar with the costs, and with so many aged care costs and charges, we recognise that it may be a complex and exhausting process.

However, it is critical to note that expenses vary from person to person and are determined by individual circumstances. Aged care costs can range from roughly $18,800 to more than $52,000 per year, depending on the aged care home chosen, degree of income and assets, and strategy in place.

Aged care costs can be greatly lowered with professional advice. We save our clients $5,500 each year on average.

We always recommend seeking professional financial advice before you begin the aged care process, in order to fully understand the costs of aged care, as relevant to your financial situation.

Aged Care Fees explained

A layperson's understanding of aged care costs in Australia can be rather complex. So, let's take a short look at the basic fees you should be aware of:

The basic daily fee:  This is the fee that goes towards day-to-day costs for meals, heating, cleaning, laundry and so on. The government has set a minimum basic daily fee, calculated as 85% of the basic single rate of Age Pension. This figure is indexed in line with the Age Pension.

Means-tested care fee: This is an extra fee determined by the Department of Human Services (DHS) once they assess your income and assets. This fee has a yearly and lifetime cap therefore, you don’t have to keep paying it once you’ve reached your cap. But not everyone will reach the cap and some people won’t even need to pay this fee.

Accommodation payment/deposit: A fully refundable deposit, accommodation payment or a combination of the two is used to pay for your loved one’s accommodation in the aged care home. In some cases, the Australian Government can cover all or part of the aged care accommodation costs, saving you a huge chunk of the amount of money you spend. When speaking to your aged care adviser, make sure you find out if this benefit is available to you.

Each of these fees can vary, depending on individual situations. Your family’s income and pension can play a large part in determining in how much you ultimately pay in aged care fees.

Each of these fees can vary, depending on individual situations. Your family’s income and pension can play a large part in determining in how much you ultimately pay in aged care fees.

Aged care costs in Australia: How to Calculate Them

Now that you have an idea of how much you will have to pay for aged care, let's talk about how to calculate the specific prices.

Cost estimates

You must first calculate the cost of an aged care facility. An elderly care financial expert can estimate your probable aged care costs. This estimate will give you an idea of the initial and continuing costs associated with transferring your loved one into care.

Set up a financial assessment.

The next step is to have an aged care financial guidance professional examine your income and assets to establish your ability to fund the aged care fees and whether it is essential to sell the family home.

Additionally, you require an evaluation from the Department of Veterans' Affairs (DVA) or the Department of Human Services (DHS). It's crucial that you choose the most effective time for filling out and submitting this form. Everybody's situation is different. This evaluation will identify whether you are eligible for any government benefits or aid, and it frequently enables you to make significant financial savings. 

Find out how much the company charges

You should speak with several aged care facilities to compare costs before putting a loved one into their care. To determine which service is best for your needs, you must strike a balance between comfort and elder care expenditures.

All of the aforementioned are things that Core Value Financial Advice helps with step-by-step.

Reduce your aged care costs and expenses.

We at Core Value are a highly skilled group of professionals who offer clients aged care financial services.

We have helped hundreds of people just like you maximise Centrelink and DVA support thanks to our many years of knowledge in the field.  We can also assist you in minimising elderly care costs by evaluating each client's specific financial worries.

Case Study - Mabel

Mabel 86, of Brisbane, saves over $6000 in this case study. After professional advice, after a year Mabel, who is 86 years old, owns a $830,000 Brisbane property. Elsie, Mabel's daughter, is her enduring power of attorney and will handle all financial and aged care matters on her behalf.

Mabel has savings in her bank of $150,000.

Mabel receives the full Age Pension and is paid $894.40 per two weeks ($23,254 per year).

In Brisbane, Elsie has located an aged care facility that appears to be ideal for Mabel. A refundable accommodation deposit of $500,000 is required by the nursing facility. You can pay for this entirely or in part.

Elsie assumed that after the house was sold, any leftover money would be deposited into a bank account to pay for ongoing expenses. Accordingly, Mabel would have received the following Age Pension payments and Aged Care costs over the first 12 months:

                                                                  Age Pension                                                                             Aged Care Fees

                                                                    $18,502                                                                                              $33,895

Mabel would have received the following Age Pension payments and aged care costs for the first 12 months if she had sought guidance before making any financial decisions on her behalf, according to Wealth Effect's recommendations.

                                                                     Age Pension                                                                               Aged Care Fees

                                                                      $22,115                                                                                               $30,788

By following these suggestions, Mabel would have saved money every year she stays in an assisted living facility, for a total savings of $6,720 during the first 12 months.

                                                                    Without Advice                                                                           With Advice

Centrelink Age Pension                          $18,502                                                                                           $22,115

Aged Care Fees                                          $33,895                                                                                          $30,788

Total Benefit of Advice                                                                                                                                     $6,720

By only getting assistance and organising her funds in a way that is favourable assessed for Centrelink and aged care purposes, Mabel would hypothetically have an additional $60,000 in her bank account if she stayed in an assisted living facility for 5 years. Once the initial setup was complete, nothing else would have needed to be done.

This is merely one of the countless circumstances that we provide advice on every day.

With our individualised approach, Wealth Effect Group (WE.) helps hundreds of families each year. We recognise that every family has a special circumstance. So you're in the right place if you're having trouble deciding on the best aged care options or feel overwhelmed by the task.

With specialised assistance from our experienced consultants, you can make the right financial decisions for your loved ones and save thousands on aged care. 

Call a senior care expert right away. Contact us at 1300 459 101 to speak with one of our advisors.

Woman with Stacked Rings

2/17 Hyde Street, Seddon,

VIC 3011

Building 1 Suite A1 Level 3, 209 Robina Town Centre Drive, ROBINA, QLD 4226

CONATCT - 1300 459 101

Want to Speak to an Aged Care Expert?

We can assess your unique situation and advise you on the options available to you.

Contact us for a consultation or please call 1300 459 101.

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