Sorry about the format, but for those having trouble reading the attached article, see below;
MY HOME is my castle, as the saying goes, my little quarter acre of paradise. So how then does a family cope with the notion of selling the former home to pay for aged care costs of a family member? If recommendations from a recent Productivity Commission report into aged care are adopted by the government, all residents entering aged care will soon be required to pay an accommodation bond. The amount of the bond required is up to an aged care facility, unregulated by government, and currently of the order of $300,000. For many families that dont have a lazy $300,000 sitting around, a signi cant decision needs to be taken as to how to fund entry to aged care. The good news is that accommodation bonds paid are exempt from Centrelink means testing, which means the payment can shield a pensioner from a potential reduction in a Centrelink Age Pension and Income Tested Fees payable in aged care. Further, the accommodation bond is government guaranteed, and ultimately refunded to a family, less a retention amount currently $318 per month for a maximum of ve years. All well and good if a bond can readily be paid. For many families things arent that simple. Whilst payment of an Accommodation Bond is not mandatory for entry to aged care, a healthy interest rate currently 9 per cent per annum is payable on any unpaid amount. Therefore, interest payments of $27,000 per annum would need to be found to fund an unpaid bond of $300,000 plus funding of other aged care fees typically at least $14,000 per annum. Families are then confronted with a major decision, to retain and rent the former home, or sell. Whilst sale of the former home may provide suf - cient capital to pay an accommodation bond, should any surplus capital be left in a bank account or term deposits there is potential for a signi cant reduction in the Centrelink pension and an increase in aged care fees. Should the home be rented, net rental income may be applied to interest payments on an any unpaid accommodation bond though income tax may erode any cash ow bene t and capital gains tax may ultimately be payable. Importantly, should rental income from a former home not be utilised to make periodic payments on any unpaid accommodation bond or fund an accommodation charge, the property and rental income will be means tested by Centrelink after a period of two years. The interface between Centrelink and DVA pensions, aged care fees, tax, and property considerations remains complex and subject to Government whims. As there are many issues and options to consider in this complex area professional advice may prove invaluable. Andrew Hopkins is the principal of WA Aged Care Financial Solutions, an independently owned nancial planning business that has no ownership links with any nancial institution or product provider and is a Corporate Authorised Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687. Information in this article is of a general nature only, and should be considered together with your particular needs and circumstances. For more information phone 1300 827 229 or visit www.agedcarefswa.com
Happywanderer said
04:51 PM Sep 14, 2011
I've been told it can be that expensive Vic. I've told my kids Don't you dare put me in a aged care home. I've got my little unit and its well set up for old age, When I get there.
lilly31 said
05:59 PM Sep 14, 2011
I Hope that unless i need medical care i can live in a unit till i have to go.. Both my girls say i can live with them dont know about them but not sure if i can handle that but time will tell i guess ... I hope i am healthy enought to stay on the road even part time till i well in to my 70s at least .. But i guess only time will telll...
Vic said
12:32 AM Sep 15, 2011
I believe that some consideration is given to those who can't afford to pay the bond, I mean they can't get money out of someone who doesn't have it, so not much in charging them interest on outstanding bond money if they can't repay it. Seems a bit of a mixed message.
No way I want to live with my kids though if I get to that stage, would rather try to live independently for as long as I can with perhaps a bit of outside help (assuming I would be on my own). I suppose it is no good worrying about these things too much, you'd die early of stress!
villatranquilla said
07:36 PM Sep 15, 2011
currently if a spouse/partner/carer still requires the home to live in then no bond/entry fee is payable unless there are a lot of other assets. If you live alone and own your home then a bond is payable pro-rata the value of the property. This is to get into a basic care facility - however if the person is assessed as high care no bond is payable. If you want a new flash facility you'll probably pay extra. Most residential care facilities have to take some people who have no assetts. I have seen people transfer ownership to children a year or so prior to requiring residential low care in an effort to "beat the system" but this must be done at least 5 years prior and of course has centrelink implications. Remember facilities are only Gov.t funded for the daily services they provide - not the buildings or up-keep - that's why they are allowed to charge bonds for low level care entrants -often a % of which is returned to the estate on death Having worked as a community aged care manager I understand the difficulties organisations face when trying to provide services and facilities.
Vic said
04:54 PM Sep 16, 2011
Thanks for the explanation Jenny and Barry, something many of us will have to face one day, but hopefully not for awhile.
Although some would up to speed on this due to having to book in an older relative etc.
Gerty Dancer said
07:14 PM Sep 16, 2011
Having worked in aged care for many years, I can only say the fees are even higher in other places.
Theres a lot of support services for people to stay in the community nowadays, and I think the powers that be are finally realising that its cheaper to help a person stay at home wherever possible. Personally this would be our choice, if we have a choice.
Owners of aged care facilities sell independant living units as "lifestyle" homes, and it suits them if you move in when you are only 60-ish as they have your money longer. Friends of ours recently moved into one of these "lifestyle" places, and they considered the choice carefully and are happy.
Vic said
09:40 PM Sep 16, 2011
Thanks Gerty,
I'm not ready yet but who knows what is around the corner, may or may not happen, but I think I would only do it if I became a burden on others or it was out of my hands (lost my marbles etc...although some may say that has happened already, lol).
gordon_adl said
11:02 PM Sep 16, 2011
And yet another reason for legalising euthanasia. Both of us will start testing ourselves at a predetermed age. Once we find out that being alive is not actually living, we will self euthanise.
Ma said
08:57 AM Sep 17, 2011
Everyone has their own agenda when it comes to euthenasia I guess, and rightly so, we are after all a democratic (supposedly) society.
I for one agree with you Gordon and only hope that I don't leave it too long and still have the mental faculty to complete the task.
Vic said
11:33 PM Sep 19, 2011
I suppose you are aware of this group, I went to one of their talks with the good Dr in attendance, they tell you a lot more than you will hear in the press or on a website, see;
-- Edited by Vic on Monday 19th of September 2011 11:33:28 PM
Beth54 said
08:20 AM Sep 20, 2011
I can't remember all the details of when Mum had to go into high care in '03, because I was sick myself at the time.
Dad was another story. We had to sell his house to finance his move to a care facility. He was borderline low/high care, but they put him in low care because he still had his 'marbles'. In fact, he still had them til the day he passed a year after his moving in. We invested the proceeds from the house sale, and the interest paid the fees. So when he passed, there was virtually no money lost.
I must say, he was very happy where he was. It was a great facility with lovely staff.
The best type of facility is one that has all levels of care in the same place. ie: Independant living, respite, low care and high care. So you could sell your home, buy an independant living unit, and, when necessary, move on to the other levels. When you move from the ILU, it can be sold,,,usually sells quickly,,,to then pay for your care. If invested wisely, there'd still be money to leave for your kids, if that's what you want.
I don't have a home or much money, so I'd be in the 'begger' category for a care facility. It's a horrible thing to have to think about, but from our experience with Mum and Dad, it's better to have some sort of plan in place.
Vic said
11:45 PM Sep 20, 2011
Thanks for that feedback Beth, sounds like it was a good way to deal with the situation.
Sorry to hear about your parents.
Beth54 said
11:13 AM Sep 21, 2011
Vic wrote:
Thanks for that feedback Beth, sounds like it was a good way to deal with the situation.
Sorry to hear about your parents.
Thanks Vic.
Sheba said
06:12 PM Sep 21, 2011
Vic wrote:
I suppose you are aware of this group, I went to one of their talks with the good Dr in attendance, they tell you a lot more than you will hear in the press or on a website, see;
-- Edited by Vic on Monday 19th of September 2011 11:33:28 PM
Thanks for that link Vic. Been to one of those meetings here, but not with the Dr. in question.
One thing that greatly annoys me, is the fact that most people seem to forget to use the word "Voluntary."
When the NT had it in place, they had enough Checks and Balances in place, so that it was impossible for anyone to be removed at the whim of a relative etc.
I was disgusted when that Legislation was over-turned by the Federal Government.
All the Pollies worry about is Votes. They don't give a damn about us.
Cheers,
Sheba.
Vic said
09:37 PM Sep 21, 2011
I'm not too sure if I would have the courage to carry it out Sheba, but I suppose it would depend on your state of mind and physical pain at the time. There were a few at the meeting I went to that were in the process or planning their departure from the planet.
One day it will become legal I'm sure.
Ma said
01:11 PM Sep 22, 2011
One can only hope Vic.
Vic said
04:36 PM Sep 22, 2011
I think eventually it will Ma, but who knows with all the nuts around who oppose it for their own beliefs which they want to impose on others.
Freedom of choice is the way it should be!
Ma said
01:50 PM Sep 23, 2011
They call Australia a Democracy and advocate freedom of speech etc., but when it's all boiled down we are still restricted as to what freedom we have.
I'm not advocating a free for all here, there should be and are laws which run our lives and without them there would be complete anarchy but when it comes down to our own lives and the impact on us personally, as terminal illness impacts, then we should have the freedom to choose how long we suffer.
Please don't start any political arguments re my comments as that is not what I have intended. It's just my own opinion.
Vic said
02:44 PM Sep 23, 2011
Ma wrote:
Snip....
Please don't start any political arguments re my comments as that is not what I have intended. It's just my own opinion. Snip.....
Same here Ma, my intentions and opinion as well.......
Cruising Granny said
06:35 PM Sep 23, 2011
I can't depend on my kids to look after me, nor do I want to. It would be good if I could count on them. I'll live in the van as long as I can get up and down the steps. Then I'll get a small unit or something and get outside care as long as I have all my marbles in the same bag and can live independently enough. I'm not ready yet, and hope it doesn't happen.
milo said
02:10 PM Sep 24, 2011
I have an aunt who wants to go into an aged care place, but she's trying to sell her property first, but her son wont get out and shes too frail to kick himself out .. not sure what she can do.. but i heard for her, she can sell her house , and use some of that money to pay for her unit and care, and invest the rest... were trying to keep dad at home long as possible..
Vic said
06:16 PM Sep 24, 2011
I heard on the radio recently Milo that a 40 year old in Italy wouldn't move out of home and expected his parents to do everything for him, washing, ironing, feed him etc. He had a well paid job and could afford to move out but wouldn't.
They ended up getting a court order and he was forced to move out, that was the only way they could get him to leave. I think you aunt should get some advice from someone in aged or community care.
In your case Milo I am sure you family are happy you are looking after your Dad and the good job you are doing keeping him on the planet, I take my hat off to you.
AnnaRose said
02:06 AM Jul 20, 2013
Actually it's bit confusing, most of the things comes in your life what you have to accept most likley these aged homes, when you get older you need health care services most of the time but there is no one who can take care of you health instead of these aged home places.
countryroad said
12:55 AM Sep 23, 2013
Just an addit
My Mum lived in a hostel...she bought into it, lived their 8 years but when she needed a nursing home with higher care...there were no vacant beds, no one was considerate enough to die that week ( the only way there are empty beds )
...ABSOLUTELY no choice but to find another vacant bed elsewhere as Mum in hospital following stroke. Checked out a couple and loved where Mum was placed, worked out wonderfully. Her money for the original had followed her to place number 3. Started out with
Dad in Gerringong NSW in self care so Dad didn't have to mow , they loved it, much better than Bankstown to retire to.
Robyn
neilnruth said
12:58 AM Sep 24, 2013
I started reading this and realised it was an old thread - but it's still the same. If you have a home you have to sell it to pay a bond - unless the carer stays on in the home.
And as country road says, sometimes it works out well.
I have had both parents in independent living unit and now one in dementia care. The facility doesn't want my mother to move out of her independent unit - but to have services come to her. So it all works out quite well. If it ever comes to the point when she needs to move into the next stage her deposit (bond) goes with her. And as someone has said, if you don't have a home or assets - they can't take it off you but still have to find a placer somewhere. It pays to get your name on a list somewhere if you think you will need care in the future. Otherwise, if you have a stroke, you could be placed anywhere in the state away from your family.
I found this article a bit worrying especially for those who may not have the bond amount.
What do others think and am I understanding it properly?
-- Edited by Vic on Wednesday 14th of September 2011 02:08:14 PM
-- Edited by Vic on Wednesday 14th of September 2011 02:19:16 PM
MY HOME is my castle, as
the saying goes, my little
quarter acre of paradise.
So how then does a family
cope with the notion of selling
the former home to pay
for aged care costs of a family
member?
If recommendations from
a recent Productivity Commission
report into aged care
are adopted by the government,
all residents entering
aged care will soon be
required to pay an accommodation
bond. The amount
of the bond required is up
to an aged care facility, unregulated
by government,
and currently of the order of
$300,000. For many families
that dont have a lazy
$300,000 sitting around, a
signi cant decision needs to
be taken as to how to fund
entry to aged care.
The good news is that accommodation
bonds paid
are exempt from Centrelink
means testing, which means
the payment can shield a
pensioner from a potential
reduction in a Centrelink
Age Pension and Income
Tested Fees payable in aged
care. Further, the accommodation
bond is government
guaranteed, and ultimately
refunded to a family, less a
retention amount currently
$318 per month for a maximum
of ve years. All well
and good if a bond can readily
be paid.
For many families things
arent that simple. Whilst
payment of an Accommodation
Bond is not mandatory
for entry to aged care, a
healthy interest rate currently
9 per cent per annum is payable
on any unpaid amount.
Therefore, interest payments
of $27,000 per annum would
need to be found to fund an
unpaid bond of $300,000
plus funding of other aged
care fees typically at least
$14,000 per annum. Families
are then confronted with a
major decision, to retain and
rent the former home, or sell.
Whilst sale of the former
home may provide suf -
cient capital to pay an accommodation
bond, should
any surplus capital be left in
a bank account or term deposits
there is potential for
a signi cant reduction in the
Centrelink pension and an
increase in aged care fees.
Should the home be rented,
net rental income may be
applied to interest payments
on an any unpaid accommodation
bond though income
tax may erode any cash ow
bene t and capital gains tax
may ultimately be payable.
Importantly, should rental
income from a former home
not be utilised to make periodic
payments on any unpaid
accommodation bond
or fund an accommodation
charge, the property and
rental income will be means
tested by Centrelink after a
period of two years.
The interface between
Centrelink and DVA pensions,
aged care fees, tax,
and property considerations
remains complex and subject
to Government whims. As
there are many issues and options
to consider in this complex
area professional advice
may prove invaluable.
Andrew Hopkins is the
principal of WA Aged Care
Financial Solutions, an independently
owned nancial
planning business that
has no ownership links with
any nancial institution or
product provider and is a
Corporate Authorised Representative
of Securitor Financial
Group Ltd ABN 48
009 189 495 AFSL 240687.
Information in this article
is of a general nature only,
and should be considered
together with your particular
needs and circumstances.
For more information
phone 1300 827 229 or visit
www.agedcarefswa.com
No way I want to live with my kids though if I get to that stage, would rather try to live independently for as long as I can with perhaps a bit of outside help (assuming I would be on my own). I suppose it is no good worrying about these things too much, you'd die early of stress!
I have seen people transfer ownership to children a year or so prior to requiring residential low care in an effort to "beat the system" but this must be done at least 5 years prior and of course has centrelink implications.
Remember facilities are only Gov.t funded for the daily services they provide - not the buildings or up-keep - that's why they are allowed to charge bonds for low level care entrants -often a % of which is returned to the estate on death
Having worked as a community aged care manager I understand the difficulties organisations face when trying to provide services and facilities.
Although some would up to speed on this due to having to book in an older relative etc.
Theres a lot of support services for people to stay in the community nowadays, and I think the powers that be are finally realising that its cheaper to help a person stay at home wherever possible. Personally this would be our choice, if we have a choice.
Owners of aged care facilities sell independant living units as "lifestyle" homes, and it suits them if you move in when you are only 60-ish as they have your money longer. Friends of ours recently moved into one of these "lifestyle" places, and they considered the choice carefully and are happy.
I'm not ready yet but who knows what is around the corner, may or may not happen, but I think I would only do it if I became a burden on others or it was out of my hands (lost my marbles etc...although some may say that has happened already, lol).
Everyone has their own agenda when it comes to euthenasia I guess, and rightly so, we are after all a democratic (supposedly) society.
I for one agree with you Gordon and only hope that I don't leave it too long and still have the mental faculty to complete the task.
I suppose you are aware of this group, I went to one of their talks with the good Dr in attendance, they tell you a lot more than you will hear in the press or on a website, see;
http://www.exitinternational.net/
-- Edited by Vic on Monday 19th of September 2011 11:33:28 PM
I can't remember all the details of when Mum had to go into high care in '03, because I was sick myself at the time.
Dad was another story. We had to sell his house to finance his move to a care facility. He was borderline low/high care, but they put him in low care because he still had his 'marbles'. In fact, he still had them til the day he passed a year after his moving in. We invested the proceeds from the house sale, and the interest paid the fees. So when he passed, there was virtually no money lost.
I must say, he was very happy where he was. It was a great facility with lovely staff.
The best type of facility is one that has all levels of care in the same place. ie: Independant living, respite, low care and high care. So you could sell your home, buy an independant living unit, and, when necessary, move on to the other levels. When you move from the ILU, it can be sold,,,usually sells quickly,,,to then pay for your care. If invested wisely, there'd still be money to leave for your kids, if that's what you want.
I don't have a home or much money, so I'd be in the 'begger' category for a care facility. It's a horrible thing to have to think about, but from our experience with Mum and Dad, it's better to have some sort of plan in place.
Sorry to hear about your parents.
Thanks Vic.
Thanks for that link Vic. Been to one of those meetings here, but not with the Dr. in question.
One thing that greatly annoys me, is the fact that most people seem to forget to use the word "Voluntary."
When the NT had it in place, they had enough Checks and Balances in place, so that it was impossible for anyone to be removed at the whim of a relative etc.
I was disgusted when that Legislation was over-turned by the Federal Government.
All the Pollies worry about is Votes. They don't give a damn about us.
Cheers,
Sheba.
One day it will become legal I'm sure.
One can only hope Vic.
Freedom of choice is the way it should be!
They call Australia a Democracy and advocate freedom of speech etc., but when it's all boiled down we are still restricted as to what freedom we have.
I'm not advocating a free for all here, there should be and are laws which run our lives and without them there would be complete anarchy but when it comes down to our own lives and the impact on us personally, as terminal illness impacts, then we should have the freedom to choose how long we suffer.
Please don't start any political arguments re my comments as that is not what I have intended. It's just my own opinion.
Same here Ma, my intentions and opinion as well.......
I'll live in the van as long as I can get up and down the steps. Then I'll get a small unit or something and get outside care as long as I have all my marbles in the same bag and can live independently enough.
I'm not ready yet, and hope it doesn't happen.
not sure what she can do.. but i heard for her, she can sell her house , and use some of that money to pay for her unit and care, and invest the rest...
were trying to keep dad at home long as possible..
They ended up getting a court order and he was forced to move out, that was the only way they could get him to leave. I think you aunt should get some advice from someone in aged or community care.
In your case Milo I am sure you family are happy you are looking after your Dad and the good job you are doing keeping him on the planet, I take my hat off to you.
My Mum lived in a hostel...she bought into it, lived their 8 years but when she needed a nursing home with higher care...there were no vacant beds, no one was considerate enough to die that week ( the only way there are empty beds )
...ABSOLUTELY no choice but to find another vacant bed elsewhere as Mum in hospital following stroke. Checked out a couple and loved where Mum was placed, worked out wonderfully. Her money for the original had followed her to place number 3. Started out with
Dad in Gerringong NSW in self care so Dad didn't have to mow , they loved it, much better than Bankstown to retire to.
Robyn
And as country road says, sometimes it works out well.
I have had both parents in independent living unit and now one in dementia care. The facility doesn't want my mother to move out of her independent unit - but to have services come to her. So it all works out quite well. If it ever comes to the point when she needs to move into the next stage her deposit (bond) goes with her. And as someone has said, if you don't have a home or assets - they can't take it off you but still have to find a placer somewhere. It pays to get your name on a list somewhere if you think you will need care in the future. Otherwise, if you have a stroke, you could be placed anywhere in the state away from your family.