A regular enquiry we get from overwhelmed family members is: how to we reduce aged care costs? In most cases, the way to reduce aged care costs is to ensure the person entering aged care has minimised their assets. This will ensure they are receiving the maximum benefits towards the cost of their care and also ensure they are receiving the maximum pension entitlement. There are ways you can reduce aged care costs and in most cases, this is by minimising your assessable assets.
What is an assessable asset?
Assets are looked at when working out eligibility for funding and pensions, all assets are included, including financial investments, however special rules can apply.
Financial investments include but not limited to:
- bank accounts
- cash
- term deposits
- cheque accounts
- friendly society bonds
- managed investments
- listed shares and securities
- loans
- gold
Other assets can include:
- household contents
- foreign assets
- investment properties
- special collections
- superannuation
- private trusts
- refundable deposits paid for accommodation in an aged care home.
- gifted assets: gifted amounts above $10,000 in the last financial year or above $30,000 in the last five financial years (or amounts above $10,000 in any of those financial years) are included as a financial asset.
Do I include the value of the family home as an asset?
Part of the value may be counted in your assets assessment, if you keep the home. A capped amount of $201,231.21 (Jun 2024) or net market value if lower is included in the assets assessment. If you are a couple, each partner is considered to own half each, so half the capped value is counted as your asset. It would not be counted however, if your partner or dependent children are living there. You can view the latest amount here.
What strategies can be used to reduce assets?
Everyone’s situation is different, therefore at Aged Care Specialists Vic, we specialise in completing a customised plan for each clients circumstances, however the following are some of the ways that can be considered, albeit may not apply to your circumstances.
- Paying a higher RAD
- Changing the way home contents are insured
- Gifting funds to family within Centrelink rules
- Purchasing a funeral bond
- Purchase a specialised annuity
When dealing with these circumstances, there is a lot involved and a lot to potentially lose if not done correctly. At Aged Care Specialists Vic, we ensure no stone is left unturned, and you will leave knowing all your options so you can make a sound, informed financial decision. We deal with this day in, day out and strive to get you the best outcome for your family. You can read our testimonials here.
Comments 2
Mum And Dad in their 90s are in for respite in an aged care facility at the moment and this may become a permanent thing, they are terrified about losing their house because they still wish to visit and spend days there before returning to aged care late afternoon if it does become permanent… I am their son and do not want to let them down, any advice would be greatly appreciated
Thanks for your coment Russell. We have emailed you privately with a more detailed response. Your question is common and shows part of the stress of going into aged care. The house is not assessable by Centrelink for 2 years, once assessable they may lose pensions if they are receiving them. It may also pay for them, to go in on separate days, the facility will be able to explain the options here and maybe the outcomes. We would recommend getting more through financial advice that includes both cashflow and all the outcomes. Please get in touch if we can help you with this further.