Misconceptions about the Aged Care Financial Process

Common Misconceptions about the Aged Care Financial Process

There are many myths about aged care homes and to be honest, it’s not surprising! The fee structures can be difficult to understand, there are a number of documents to complete, not to mention questions surrounding how your loved one will finance their time living in an aged care facility. 

And while there are many common misconceptions when it comes to actually living in an aged care home, there are also many aged care financial myths. In this article, we’ll focus specifically on the aged care financial myths that surround this sector. 

Myth 1 – You have to sell your home

One common myth about aged care homes is that you will have to sell your house in order to finance your accommodation in the facility. The truth is – there is no straightforward answer to the situation as it very often depends on your individual circumstances and financial situation. 

It’s certainly not a requirement to sell your home to enter aged care and there are several financing options that don’t require selling your home to finance your costs of care. Sometimes, depending on your personal circumstances it may be financially advantageous to sell your home but in other instances, this may actually not be in your best interests. Everyone’s situation is different, so what benefits you, may not apply to someone else. 

In order to find out whether it’s in your best interests to sell your home in order to finance aged care, it’s best to speak to a professional financial adviser. Here at Beacon we are financial advisers who specialise in aged care. We’ll be able to take a look at your assets and affordability and advise as to whether you might want to consider selling your home.  

Myth 2 – Aged care is not affordable

With complicated fee structures, it can feel as though aged care is not accessible if you don’t have significant assets or savings. But this is just another aged care financial myth. 

The truth is that in many cases, the government can subsidise the fees associated with aged care if you’re unable to meet the accommodation costs yourself. 

On top of that, several aged care facilities often allocate a certain percentage of beds for residents with low means. This helps to ensure that everyone has an equal opportunity to receive care. 

In order to assess the affordability of aged care for yourself or a loved one, it’s important to seek advice from a professional aged care financial adviser.   

Myth 3 – There’s no one to help you move into aged care

Transitioning from independent living into an aged care facility can be very stressful and feel daunting, especially when it comes to financial matters and comprehending fee structures. 

But that doesn’t mean that you have to do everything on your own. Professional aged care financial advisers can assist with all the financial aspects of moving into aged care. Sometimes this may even involve corresponding with Centrelink and aged care providers on your behalf.

At Beacon, we can provide you with the right documentation, assess your affordability for aged care, and present a number of strategies for financing your aged care, along with our recommendations for the best path forward that keep your best interests at front of mind. 

Myth 5 – Planning only starts when I’m ready to move into aged care

Planning for your future in aged care isn’t a task you should put off until you’re ready to make the transition. In fact, there are many benefits to planning your admission into aged care in advance. 

For instance, if a condition like dementia runs in your family, early financial planning for aged care can help to ease the burden if you develop the condition and ensure that your wishes are carried out before you lose cognitive function. 

Talking to an aged care financial planner will help to alleviate any financial stress you or your loved ones may have when the time comes to find your aged care solution.  

Myth 6 – Giving money or assets away will lower aged care fees

Another myth about aged care homes is that because Centrelink determines your aged care fees based on the assets in your possession, it makes sense to give them away to reduce your costs of care. However, this is simply not true. 

Having assets and cash flow at your disposal may often provide you with more choice when it comes to choosing an aged care home. Giving away assets may not always improve your financial position, in fact, Centrelink can calculate the assets as being in your possession for up to 5 years after you’ve gifted them. 

This could mean that pension entitlements may be less because of an asset that is no longer held but still assessed with the asset pool. This same rule applies to the calculation of some aged care fees.

Seeking financial advice on these matters is therefore crucial to ensure your decisions will not impact you negatively when it is time to enter care.

Talk to the team at Beacon

Seeking out advice from an aged care financial planner is a proactive approach to planning for aged care. We’ll dispel any aged care financial myths and put your mind at ease about your future when it’s time to seek out aged care services.