Navigating the complexities of aged care can be overwhelming, especially when it comes to managing finances and optimising social security entitlements. At ActOn Wealth, we specialise in aged care financial advice, offering tailored solutions to help you make informed decisions for your loved ones. Here are some key strategies to manage aged care costs effectively:
Retaining the Family Home
The family home is exempt from the Centrelink assets test for up to two years after entering aged care. If retained, renting the home may generate additional income but could impact age pension entitlements and increase means-tested fees. Sale proceeds from the home are fully assessable, potentially increasing aged care costs.
Example:
A pensioner with a home and savings in deposits would experience different financial outcomes based on whether they keep, rent, or sell the home.
Reverse Mortgages Home Equity Access Scheme
The government-backed Home Equity Access Scheme allows homeowners to borrow against their propertys value to supplement income. Borrowers can draw funds as regular payments or lump sums, supporting aged care costs without selling the home.
Entering as a Low Means Resident
Eligibility for low means status depends on income and asset thresholds. Retaining a protected person in the home can ensure exemptions for Centrelink and aged care assessments.
Example:
A couple where one partner enters aged care while the other remains at home may qualify for accommodation subsidies.
Paying a Refundable Accommodation Deposit RAD
Paying the RAD can exempt it from Centrelinks assets test, potentially increasing age pension entitlements. This eliminates the need for daily accommodation payments DAP, saving on interest costs.
Loans Secured Against Assessable Assets
Securing a loan against assets such as the family home can reduce their assessable value and lower meanstested fees.
Example:
A secured loan against a property valued at 500,000 can significantly reduce a clients assessable assets and resulting fees.
Social Security Strategies
Maximising Centrelink Exemptions
Certain investments, such as funeral bonds and lifetime annuities, receive concessional treatment under Centrelink rules. Gifting within the allowable limits 10,000 per year, up to 30,000 over five years can reduce assessable assets.
Living Separately and Apart
Couples where one partner enters aged care due to health conditions may be assessed as single individuals. This strategy can increase age pension entitlements and reduce aged care fees.
Example:
A couple with combined assets may benefit by having the partner in care treated as a single individual, increasing their pension and reducing meanstested fees.
Financial Hardship Provisions
Clients experiencing financial hardship may qualify for supplements to assist with aged care costs. Assets deemed unrealisable, such as jointly owned property or frozen accounts, may be excluded from assessments.
Special Disability Trusts SDTs
Special Disability Trusts are designed to provide for the care and accommodation of a person with a severe disability. Assets up to 700,000 indexed annually and associated income are exempt from Centrelink and aged care means tests.
Example:
A beneficiary entering aged care may have their RAD funded by an SDT, reducing assessable assets and increasing pension entitlements.
How ActOn Wealth Can Help
At ActOn Wealth, we provide expert aged care financial advice to ensure you maximise entitlements, manage costs, and plan for long-term financial security. Our team can: Tailor strategies to your unique circumstances, Navigate Centrelink and aged care assessments, and Optimise financial plans to reduce fees and preserve wealth.
Contact Us Today
Approaching this stage in your life should feel positive, secure, and wellsupported. With ActOn Wealths experienced aged care financial planners, your transition can be smooth, personalised, and stressfree. Our deep knowledge ensures you receive the best, unbiased financial advice for your future. It all starts with a simple phone call.
