What is aged care?

   Assisted living
   Residential aged care
   At home care

Most of us want to remain independent throughout retirement and to stay in control of where and how we live. But our ability to do so may depend upon our health and physical wellbeing. As we age, some things may become harder to do on our own. 

If our ability to live independently starts to decline and we need help with daily living activities such as cooking, cleaning and personal care, this is where ‘aged care’ comes into play.

Aged care is the term for daily living and nursing care services provided to older Australians who either need some help at home or can no longer live independently. Services are generally divided into two categories:

Home care services
Residential care services

The first step to understanding your needs and what you should plan for is to understand the realities about accessing care as you get older. The best plan is always to understand your options and be prepared.

How likely is it that I will need care?

Approximately one million retirees access aged care services. Of these people, around 192,000 live in residential aged care. Most people living in care are over age 80, but there are certainly also younger people living in care.

So your chance of needing some help is high. In fact, your chances are very high. 

Did you know?

At age 65, the chance of needing aged care during your remaining lifetime is:

  • 68 per cent for a woman
  • 48 per cent for a male

Women have longer life expectancies and on average live longer than their husbands – this increases the chance of needing care. 

Source: Australian Government Productivity Commission Inquiry Report: Caring for Older Australians, 28 June 2011.

With these sorts of odds, it is never too early to start thinking about your options and putting plans in place, either for yourself or for a family member.

What options do I have for where to live?

Where you choose to live in retirement may depend on your financial situation as well as your personal preferences, desired lifestyle and physical needs. As your needs change, you might decide to move to a different type of accommodation.
What is aged care options

Residential aged care services are run by charitable organisations, church groups, state or local government, private businesses and other community-based groups. These services are heavily regulated by government and regardless of who operates the service, they must all provide full care including:

on-call staff for assistance
basic accommodation-related services such as furnishings
cleaning services and general laundry
maintenance of buildings and grounds
nursing care.

The move into aged care can be unsettling. But since 1 July 2014 there is no longer a distinction between low and high care so this means that once you make the move, you may be able to stay in the same place even if your health declines.

Can I afford aged car?Can I afford aged care?

The cost of aged care (in addition to the cost of providing accommodation and your personal incidentals) can range from $3700 per year for basic home support to up to $107,562 for full-time care in a residential service.

This may look like a lot of money but the good news is that aged care is heavily subsidised by the government. Residential care in particular is heavily subsidised. So while the cost may be up to $107,562 per year for care, you will only be asked to pay between $17,910 and $44,291 depending on your financial situation.

The fee structure and government subsidies aim to help make aged care affordable for everyone. The Government currently spends around $15 billion on aged care services each year.

The reality is that the more money you have, the more choices you will have about where and how you live.

How should my family be involved

Working out what care option is most appropriate as we get older may be best solved by a family decision. Decide in advance to have a family meeting and talk to your children, their partners and other close family members.

Having open discussions with your family can help your children to know what you want and help to minimise disputes among your family.

The list below might get you started with things you should talk about as a family:

What is important to you when making a decision where to live?
Who should be responsible for making decisions – about your finances and/or medical / lifestyle requirements?
How your estate will be distributed?
Where you keep copies of all your important paperwork – including your will, bank account details and copies of insurance policies?
What should happen with your home if you can no longer live there?

Remember that by the time you need to move into aged care, it is probably your children who will need to make the arrangements and the decisions.

Did you know?

Most aged care is provided by friends, family and volunteers (informal carers).

In 2015 there were around 2.7 million informal carers helping disabled and older people. Approximately 1.2 million older people (who are still living in their home) needed assistance with at least one activity (represented 39 per cent of people over age 65). Informal carers are most likely to be:

  • 35 per cent spouse or partner
  • 21 per cent daughter

More than 40 per cent of carers spent more than 40 hours a week providing care.

Source: Australian Bureau of Statistics, Survey of Disability, Ageing and Carers, 2016.

This article is prepared by the strategy specialists at Aged Care Steps, a company supporting financial planning advisers who provide planning advice for aged care. To find a professional adviser who specialises in aged care advice go to www.agedcaresteps.com.au and click on the Find an Adviser link.

Disclaimer: This is general advice and does not take into account your particular circumstances or objectives. Before taking any action you should seek personal financial planning, taxation or legal advice and refer to the relevant Product Disclosure Statement before investing in any product. Aged Care Steps Pty Ltd ABN 42 156 656 843, AFSL 486723, registered tax (financial) advisers 25581502.

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