The Covid-19 pandemic has had a devastating impact on many. In particular, those living in aged care. Apart from the tragic deaths that have been a consequence of COVID, aged care residents or those in home care, have also had to endure being completely isolated from the outside world.
In Australia, those in aged care are currently living with detrimental physical, emotional and psychological health impacts from the pandemic. They are at the centre of this crisis, hence the need for urgent reform in the aged care system.
Currently, the industry is in the process of adjusting policies to meet the changing needs. However, it will likely be a while until people start to see the positive effects of this change.
Major challenges stand in the way for aged care institutions. These challenges include financial challenges and other alternate retirement options.
Challenges in Covid-Era Aged Care
The Royal Commission explored the policy and decision-making challenges in the aged care setting before the onset of the pandemic, in late 2019.
Given the increased risk for older Australian citizens, residential aged care facilities have undergone significant changes. Institutions have had to upgrade their measures for the health and safety of their workers and residents.
Aged Care and Financial Challenges
Both the aged care industry and aged care residents struggled with financial stability from 2020 onwards. No doubt, many of these financial adjustments were part of and caused by COVID’s economic effects.
As for senior residents, many were also affected financially by the pandemic. This decreased the number of residents in many of the major facilities nationwide.
Many aged care homes struggled with lower demand. There were increasing operational and staff costs. In response, aged care institutions have included changes to their operations. These improvements aim to provide more efficient and effective senior care.
Aged Care Financial Planning – 3 Important Factors to Consider:
The Industry as it is Today Highlights the Need to Plan Ahead:
Aged care financial decisions are important and can make things a lot easier for you and your loved ones when you plan ahead.
It’s important to note, if you are considering aged home care in the future that often there can be long waiting lists (usually a 6 months waiting period). If you feel like you are beginning to need help around your home, it’s essential you have these discussions now and prepare to go on a waiting list, so you can be supported when you might need it in the future.
Another factor to consider, is organising an aged care assessment. This usually entails discussing honestly how you are coping with home duties, such as grocery shopping and being able to attend medical appointments.
Home care is also based on an income test rather than asset tested. An aged care financial adviser can help you determine how this will affect you and whether any income test fees would apply to you.
As COVID-19 has proved, no one can predict the future.
By ensuring you have done everything in your power to make your life easier in the future is crucial.
Deciding What You Are Going to do With The Family Home:
Another crucial decision to think about, is what you would like to do with the family home. It often can be something most people will put off thinking about until it’s too late.
It’s understandable that this can be quite an emotional financial decision, but it is often made easier when discussed with a financial adviser. A financial adviser can provide an unbiased view and can help you make the right financial decisions and support you through the emotional factors.
A general guide to things you may have to start considering are:
- If you sell your home: it’s value will count towards the Age Pension assets test.
- If you rent out your home: it’s value may count towards the Age Pension test depending on when you moved into aged care.
- If you keep your home without renting it out: it is exempt from the Age Pension assets test for two years from the date you moved into aged care.
Navigating Aged Care Fees and How You Can Minimise the Potential Fees:
It can be beneficial seeking advice from an accredited aged care financial planner to help you determine how to minimise costs in this stage of your life.
They may also be able to help you optimise your aged pension and reduce aged care facility fees. Often people can be misguided by information from family and friends who have been through a similar process.
Seeking advice from a professional can ensure you have all the relevant and up-to-date information, so you can make the right financial decisions that can positively benefit you.
With a multitude of financial decisions to make surrounding aged care, it can often feel overwhelming and make you want to avoid them altogether.
An aged care financial planner may be the perfect solution.
An aged care financial adviser can simplify the decisions you need to consider by ensuring you are informed with all the information relevant to your situation.
Your retirement presents a wide number of situations. Among your options and your senior parents’ options, for late retirement, is aged care.
To have the best options, call Novo Wealth for aged care and retirement financial planning. Start planning for your future today.