One of the most common situations we see in aged care financial advice is families coming to us feeling overwhelmed because their parent owns assets – but simply doesn’t have enough cash flow to comfortably live or pay for care. Recently, I sat down with a lovely family consisting of a mother recently diagnosed with Alzheimer’s disease and her three Powers of Attorney. It was not yet a formal advice meeting, but rather an important discussion about their current situation, what aged care may look like in the future, and the financial options available to them.
Their story is one many Melbourne families will relate to.
“We don’t know how we’ll afford aged care”
The mother was still living at home and owned two key assets:
- Her family home
- A vacant block of industrial land inherited after her husband passed away
On paper, it looked like she had wealth. However, the reality was very different.The vacant land was not generating any rental income. There was no building on the property, yet ongoing expenses continued:
- Land tax
- Council rates
- Property maintenance
- Lawn mowing to comply with council requirements
At the same time, because the land was being assessed under Centrelink’s asset test, the mother was only receiving around $100 per fortnight in pension payments. Over the past several years, she had largely been living off her savings just to cover day-to-day living costs. This is what we often call being “asset rich but cash poor.”
As the discussion progressed, the family explained they were worried about how they would pay for aged care if their mother needed to move into residential care. Like many families, there was emotional attachment to the vacant land. It had been inherited after the passing of her husband and represented more than just money. Selling it felt significant and emotional.
However, part of good aged care financial advice is calmly exploring all possible scenarios. We discussed what could happen if the family eventually chose to sell the land and use some of the proceeds towards aged care accommodation costs. Importantly, we also discussed how Centrelink rules may change once somebody enters aged care. In many cases, restructuring assets can significantly improve pension entitlements and overall cash flow.
For this family, understanding the possible outcomes helped shift the conversation from fear and uncertainty to practical planning.
Seeing the numbers can make a big difference
One of the hardest parts of aged care planning is that families are often making emotional decisions while also trying to understand:
- Centrelink rules
- Aged care fees
- The family home
- Investments and property
- Pension impacts
- Tax implications
- Cash flow needs
It can feel overwhelming very quickly.
Many families come to us believing they only have one option – when in reality there may be several pathways available. Sometimes the biggest relief for families is simply having all the information clearly mapped out in black and white.
Why financial advice matters in aged care?
Every family situation is different. What works for one person may not work for another depending on:
- Health circumstances
- Family dynamics
- Existing assets
- Cash flow needs
- Estate planning goals
- Emotional attachment to assets
Good aged care financial advice is not about forcing decisions. It is about helping families understand the consequences, opportunities and trade-offs of each option available to them That way, families can make informed decisions together with confidence.
Need help understanding your options?
If your family is navigating aged care, dementia, Centrelink concerns or difficult property decisions, getting professional financial advice early can make a significant difference. At our Melbourne-based aged care financial advice practice, we help families understand their options clearly so they can make informed choices together.
Whether meetings are held:
- In our office
- In your home
- Or online
our goal is always to make the process feel calmer, clearer, and easier to understand.
Sometimes one conversation can completely change the direction of a family’s aged care journey If you would like to discuss your family’s situation, contact Claudia for a confidential chat.
