Transitioning from Independent Living to Aged Care
Over the last few years I have been in the position to assist and closely observe various relatives and clients relocate from the family home into retirement villages and settle into a very happy ongoing lifestyle with a choice of privacy, involvement in a new community, and a variety of available activities.
A retirement village, like the family home is another form of “independent living” where the main difference is an organised ownership and management structure. Some of these villages offer an onsite progression to assisted living and/or then onto aged care.
Often our accomodation needs will change as we age, as will our need for assistance and medical requirements, so I have put together some of the key points that I believe are relevant to those people and/or their families grappling with this dilemma.
Adapting to Change
Relocating to new living arrangements during retirement often means a review of lifestyle planning which typically includes new goals, financial restructuring, a maze of medical appointments, and update of Estate Planning, and understanding how to access home services. Needless to say, these changes can be quite complex, traumatic and involve other family members at a time of life when you would like to think there would be a little more plain sailing and smelling of roses.
None of the retirement village residents I have met are very keen to move on from independent living to the higher care levels of accommodation. Naturally we assume that good health will continue for as long as possible, but eventually a certain level of assistance will very likely become necessary. A few of the residents have pointed out to me, that for many of them, proficiency in the use of a “Zimmer Frame” has been the answer to staving off the progression to aged care. The real answer is a vast array of home services that are available which become vital towards ensuring that couples or individuals can remain in independent living for as long as possible.
Home Care Services
Home services include “Homecare Packages” which are means tested, and “Commonwealth Home Support Programs” (CHSP) which are not means tested. The Federal Government funds various providers to deliver these home services, which are predominantly not for profit organisations but with a growing number of privately owned providers now stepping up. Even with homecare services that can provide showering, dressing, home cleaning and gardening but to name a few services, eventually it may become too difficult for the individual or for a spouse to continue caring for the partner, when eventually it becomes necessary for family, friends or other support people to help with the decision of how to transition into the next stage of living arrangements.
Moving to Aged Care
The move to aged care once again, disturbs existing financial arrangements for the couple or individual with respect to how funding the aged care requirement will be met and how ongoing cash flow will be managed. If this involves moving from a retirement village villa or unit, then a sale will be required, or if it involves moving out of the family home, then a decision will need to be made as to whether that home will be sold, or retained empty, or with a family member living in it, or rented. Each of these decisions has a varying personal and financial impact.
The move to a Residential Aged Care Facility (RACF) generally known as aged care, will incur certain costs which can vary enormously but include:
- Basic daily fees. The basic daily fee for all permanent residents who enter aged care is 85% of the annual single basic age pension.
- A contribution towards accommodation.This can include a daily accommodation contribution towards maintenance for residents with some assets, and for residents of reasonable means. an accommodation payment towards the provider’s fixed costs. These payments can be made via a Refundable Acccommodation Deposit (RAD), (formerly known as an accommodation bond), or a daily accommodation payment (DAP). Residents can choose to pay via a RAD or a DAP or a combination of both, depending on whether a lump sum, regular cash flow or a mix works best for the resident.
- Means-tested care fee may also be payable depending on assets assessment.
- Extra service fees (some facilities only)
Clearly it seems to me that at a time when there are family, financial and health pressures (see previous article re: CARING FOR ELDERLY), seeking appropriate advice from a qualified financial planner can relieve this pressure and assist you towards making the right financial decisions and enhancing quality of life for your loved ones.
If you or your family would like an obligation free appointment to discuss any of the topics raised in this article, contact Adviser fp by (CLICKING HERE).
- Adviser fp / Lonsdale Financial Group