Planning for aged care can be overwhelming, especially when faced with complex fees and evolving financial needs. In this case, we explore the journey of a 77-year-old widower who found himself in this very situation. After selling his home and transitioning into an aged care facility he felt a little financially lost. He had $600,000 in cash and $200,000 in superannuation. An annual income of $33,000 from his Centrelink Age Pension and an overseas pension too. Seeking advice on how to cover rising costs of care while maintaining independence became very important. And that’s where we came in. Help with navigating aged care costs is one of our specialties.
Understanding the Challenges of Aged Care Funding
The biggest challenge the client faced was understanding the intricate fee structure associated with aged care. With fees such as the Refundable Accommodation Deposit (RAD), Daily Accommodation Payment (DAP), and other costs like Means Tested Fees and Additional Services Fees, the financial landscape was complex. On top of this, there were personal expenses outside the care facility that he still needed to cover.
A Holistic Financial Strategy
To address these challenges, we created a comprehensive financial plan. We started with a thorough review of his current super pension products and investment strategy. His new circumstances then aligned with his assets. We considered the impact on his Centrelink Age Pension while we sought to enhance his benefits.
We advised on the various aged care fees, breaking down how to approach each one—whether through a lump-sum RAD payment or a DAP—and reviewed how these choices would impact his long-term financial stability. Our client had an attorney who we also worked closely with. We needed to ensure that the residential care facility was managed effectively and that updates were communicated to Centrelink.
Short-Term Gains and Long-Term Stability
Through careful financial structuring, we were able to secure an additional $11,000 per year in Centrelink Age Pension benefits for the client. This immediate boost provided peace of mind. But more importantly, the long-term strategy ensured that his care fees would be fully covered for the foreseeable future, safeguarding his financial health.
Key Lessons Learned
Both the client and his attorney walked away with a better understanding of how aged care fees work in conjunction with Centrelink and superannuation. This holistic approach helped them see how each financial decision impacts another, ensuring that their choices wouldn’t negatively affect other areas of his finances. Most importantly, they gained confidence in their ability to manage these expenses without the fear of running out of money.
Conclusion: Feeling Confident Navigating Aged Care Costs
By addressing the complexities of aged care fees and aligning his financial strategy with his new life circumstances, we were able to provide this client and his family with a clear path forward. With a solid plan in place, they now have confidence that his aged care and personal costs will be covered long into the future.
If you or someone you know is entering aged care and feeling overwhelmed by the financial aspects, contact our office. We can help navigate aged care costs, the process and put you on a path toward a secure financial future.
Send an enquiry today.
