Aged Care Financial Planning for High Net Worth Clients
When it comes to aged care financial planning, high net worth individuals face unique challenges and opportunities. From inhome care options to residential aged care decisions, understanding the financial and lifestyle implications is essential. At Acton Wealth, we provide comprehensive aged care financial advice tailored to the specific needs of high net worth clients.
InHome Care Options
Inhome care services allow ageing individuals to maintain their independence while receiving essential support. These options include:
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Commonwealth Home Support Programme CHSP:
Provides entrylevel support such as transportation, meals, and social assistance. Recipients contribute to the cost of services based on their eligibility. -
Home Care Packages:
Designed for those with higher care needs, offering clinical and nursing support. An Income Tested Care Fee ITCF is required for individuals above a certain income threshold. Transitioning to the Support at Home Program from July will expand care packages and adjust cost structures. -
Private InHome Care:
Fully selffunded, offering flexibility in service types and timing, ideal for clients with the financial capacity to avoid government waiting periods and assessments.
Key Consideration: High net worth clients may benefit from private care for lowerlevel needs and consider governmentsubsidised options for intensive care requirements.
Residential Aged Care Options
When inhome care is no longer sufficient, residential aged care offers a range of support levels from personal care to continuous nursing. Options include:
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Private Facilities:
Fees and services are negotiated directly with the provider, offering greater flexibility, including the ability for partners to reside together without government assessments. -
Government Subsidised Facilities:
Operate under the Aged Care Act, requiring an Aged Care Assessment Team ACAT approval. Clients may need to pay a combination of fees including basic daily care fees, Refundable Accommodation Deposit RAD, Daily Accommodation Payment DAP, and Means Tested Care Fees MTCF, capped annually and over a lifetime.
Funding Strategies for Aged Care Costs
High net worth clients must carefully consider their funding options for RAD, DAP, or a combination of the two. Strategies include:
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Selling or Retaining the Family Home:
Selling can free up capital but may increase assessable assets under the MTCF. Retaining and renting the home could provide ongoing income but has tax and MTCF implications. -
Drawing from Investments or Superannuation:
Assess the impact on estate planning, income generation, and tax liabilities. Ensure sufficient liquidity to meet ongoing care expenses. -
DAP vs RAD:
DAP: Provides flexibility by retaining lump sum capital but incurs higher ongoing costs due to interest rates. RAD: Offers longterm savings and refunds the amount to beneficiaries upon passing.
Example: A client entering care in October with a 1 million RAD would pay a daily expense if opting for DAP based on an MPIR. Choosing RAD instead eliminates the daily expense and reduces financial outflow.
Importance of Disclosure
Choosing whether to disclose income and assets to Centrelink impacts care costs. Key considerations include:
NonDisclosure: Avoids completing the Residential Aged Care Form SA initially, incurs higher costs but refunds any overpayments once the individual cost of care is calculated. Disclosure: Reduces costs if the MTCF is lower than the calculated cost of care. Advisable when health deteriorates or longterm care is required.
Why Acton Wealth
Navigating aged care financial advice requires expertise, particularly for high net worth clients with complex assets. At Acton Wealth, we:
Provide tailored strategies for managing care costs and asset drawdowns. Ensure tax efficiency and estate planning alignment. Offer ongoing support to adjust plans as circumstances evolve.
Contact Acton Wealth today for expert aged care financial advice that secures your financial legacy while ensuring the highest quality care.
