Sadly with the Australian population over the age of 70 likely to double to nearly four million in the next 20 years, aged care is an issue that will be of increasing concern to a growing number of people. It is not just older Australians who need to understand how aged care works – anyone with aging parents may find themselves having to understand a complex system at very short notice.

Many people will make private arrangements for their retirement living. They may stay in their own homes, perhaps with help from family or other carers. Some will move into a retirement village and retain their independence. For others, a time will come when they need a higher level of care.

Residential aged care is provided at either low level (previously referred to as hostels), or high level (nursing homes). Some facilities will provide both levels of care, and the standards of different homes vary from basic to luxurious. Not surprisingly, costs vary accordingly.

The government provides substantial assistance with the costs of aged care, and eligibility for government support is determined by Aged Care Assessment Teams (ACAT). Aside from making an assessment of the need and level of care required, the ACAT may also be able to assist in finding a place in an appropriate establishment. Most people prefer to make their own choice, and it is worthwhile visiting a number of facilities. Quite often available places are subject to existing vacancies so it may be necessary to apply to more than just one or two.

In most cases a contribution towards the costs of their aged care is required. Contributions vary, and depend upon income, assets and pensioner status. Fees include accommodation bonds (low level care), accommodation fees (high level care), and both basic and income-tested daily care fees.

Sometimes the need for aged care can arise at very short notice. For example, a stroke or a broken hip may be the trigger for an immediate move. The stress of entering aged care can be quite considerable and this isn’t helped by the range of facilities on offer and the complexity of funding arrangements. The emotional upheaval on all parties can be eased by early planning and open discussion within families. The booklet 5 Steps To Entry Into Residential Aged Care is a good starting point for anyone who needs to understand how aged care works.

Check out our aged care resources section for more useful tools.

And although nobody wants to talk about it, planning for aged care is the best course of action.   Talk with an ipac adviser.

Source: 5 Steps To Entry Into Residential Aged Care, Australian Government Department of Health and Aging.

• plan ahead — your parents’ circumstances can change quickly
• decisions will involve both financial and emotional considerations
• consider the impact of a strategy on care costs, tax, the pension and cash flow
• think carefully about any surplus from selling the family home
• paying a higher bond could mean a higher pension and lower fees.

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