AGED CARE: ARE YOU READY?
As a result of improved medical technologies and treatments, life expectancy at birth has increased from 75.8 years in 1984, to 82.1 today. By 2044, it is projected that the average Australian will live to approximately 90.4 years of age. The demand for quality aged-care is expected to rise in line with these statistics. As it does, so too does our need to plan for the future.
Bongiorno is increasingly approached by clients for advice about family members on the cusp of requiring aged-care assistance. Many have questions around both options and costs.
From 1 July 2014, the rules for income-tested care fees were changed. Those with the financial capacity to pay will be asked to contribute to the costs of care. Types of care include:
In home: the government provides subsidies for home care. A basic fee is charged, however, those whose income exceeds the age pension may be required to pay more. Fees are calculated based on the level of care required and other living expenses, e.g. utilities, medication, etc.
Residential: fees relate to level of care and your ability to pay, e.g. meals, laundry and accommodation. Accommodation costs can be paid as a lump-sum refundable deposit, a regular rent-style payment or a combination of the two.
For people with more time to plan ahead, it is most important to not only identify what you or your family members need to maintain an acceptable quality of life upon retirement, but also to factor in the possibility of future aged-care requirements. Clarity around this issue allows people to set up an asset base that ensures a comfortable passive income to suit lifestyle expectations and potential care requirements.
Despite the clear variables, including unpredictability of health/medical issues, changes to government policy and regulation, and overhauls to the healthcare system, steps can absolutely be taken to ensure you and your family are prepared for anything.
For more information about Government reforms to the aged-care sector, you might like to visit: