Navigating Complex Aged Care Choices

With Richard Newton, certified Aged & Disability Care Specialist Adviser

Aged Care

Aged Care choices are complex.

Seeking out aged care services is rarely a process someone goes through alone, and it is not always the person needing aged care who takes the lead with arrangements.

Spouses, siblings and adult children are among those who are often involved. Even if they are not consulted at the outset, these are family members who will also be coming to terms with the choices and changes being made.

Whether you are considering aged care for yourself, a parent, partner or loved one, the decisions you face can seem overwhelming.

Do I Need Advice?

The simple answer is Yes. It is important that you seek advice about your individual circumstances.

Soundbridge can give you useful information to help you better understand aged care costs. The decisions you make about how to fund aged care can have wide ranging and long lasting effects on many outcomes, including:

  • your pension entitlement
  • the cost of care
  • your ability to afford care in the longer term
  • the amount of money left to your estate.

Financial arrangements can vary within aged care facilities, and from one facility to the next. There is no one-size-fits-all solution. One financial arrangement may be better suited to you and your financial objectives than another.

We can help you understand your aged care costs by:

  • identifying the fees and charges that will apply to you
  • evaluating the affordability of aged care in the short and long term
  • calculating your pension entitlement and other benefits
  • discussing the options for meeting your aged care costs
  • providing you with a comprehensive analysis of your options so that you can make informed choices.

Aged Care Fees Explained

Aged care costs in Australia can be quite complex to understand, so let’s take a quick look at the basic fees you need to know about:

  • Basic daily fee:

This is the fee that goes towards day-to-day costs for meals, heating, cleaning, laundry and so on. The government has set a minimum basic daily fee, calculated as 85% of the basic single rate of Age Pension. This figure is indexed in line with the Age Pension.

  • Means-tested care fee:

This is an extra fee determined by the Department of Human Services (DHS) once they assess your income and assets. This fee has a yearly and lifetime cap therefore, you don’t have to keep paying it once you’ve reached your cap. However, not everyone will reach the cap and some people won’t even need to pay this fee.

  • Accommodation payment/deposit:

A fully refundable deposit, accommodation payment or a combination of the two is used to pay for your loved one’s accommodation in the aged care home. In some eligible cases, the Australian Government can cover all or part of the aged care accommodation costs, saving you a huge chunk of the amount of money you spend. When speaking to your aged care adviser, make sure you find out if this benefit is available to you.

Each of these fees can vary, depending on individual situations. Your family’s income and pension can play a large part in determining in how much you ultimately pay in aged care fees.

Case Study

We recently met with a new client, Neil. If Neil opted to sell his former residence, his age pension would have been cut off. As he is very conservative, he did not want to purchase shares or property. Before seeking aged care financial advice, Neil was planning to invest the proceeds from his property sale into term deposits, which would have affected his pension eligibility and other considerations.

Keeping the former home when moving into an aged care residence can often be the best option. Depending on an individual’s circumstances it may work out better for age pension and aged care fees. However, sometimes it is not possible to keep the former home, and determining the best place to invest the proceeds from selling the home is often very stressful for the family.

Furthermore, investing the proceeds into a pension deeming bank account or term deposit often increases a person’s nursing home fees and cuts their age pension.

This is the story about how we were able to help Neil:

Step 1 – Sell the primary residence

With the help of Neil’s family, we were able to maximise the amount of money Neil received from his property sale. After paying all fees, Neil was left with approximately $670,000.

Step 2 – Pay Refundable Accommodation Deposit (RAD) of $440,000

Step 3 – Invest $210,000 in a Care Annuity, and $20K in term deposit for lifestyle expenses

By investing part of Neil’s money into a specialised Care Annuity we were able to minimise Neil’s assessable income. This allows Neil to receive a full age pension of $24,268 per year.

Neil also receives $4,297 per year from the annuity, with 100% of his capital to be paid back to Neil in 10 years, or to his estate on his death.

What was Neil able to save from seeking financial advice?

By combining a RAD fee with a Care Annuity strategy, we were able to slash Neil’s age care income tested fees and means test care fee, increase his aged pension to the full amount, increase his estate value over 10 years, and ensure no cash shortfall for care.

Don’t Go It Alone

Soundbridge’s aged care advice and support will bring a greater peace of mind to the entire family and help you make informed decisions, with confidence and assurance. With a suite of services ranging from exploring aged care options to cash flow strategies, we can lift many burdens of responsibility off the shoulders of all involved.

To find out more about aged care, or to make an appointment, please call and ask for Richard Newton our Aged Care Specialist.

Richard Newton - Aged & Disability Specialist Adviser


While every care has been taken in the preparation of this article, Soundbridge Pty Ltd (ABN 40 151 134 146) and AFTA Pty Ltd (ABN 18 624 984 550, AFSL 507423) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts.

The information and any advice provided in this document is general and has been prepared without taking into account your objectives, financial situation or needs, and might not be appropriate to your situation. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things. Past performance is not a reliable indicator of future performance.  AFTA Pty Ltd does not warrant that future forecasts are guaranteed to occur.

The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.

Soundbridge Pty Ltd (ABN 40 151 134 146) is a representative of AFTA Pty Ltd (ABN 18 624 984 550), Australian Financial Services License (507423), Registered office at 166 Quay Street, Rockhampton QLD 4700.

Any advice on this website is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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