The aged care industry can be confusing for families, particularly for first-timers. From the first step up to the last when the elderly finds an aged care residence, there are many chances to commit mistakes. That’s why there are financial planning companies to help with the finances. But most of all, there are many reliable types of residence for aged people.
The following are some of the most common pitfalls of families that you should avoid at all costs.
1. Selling the Family Home Without Considering the Elderly’s Pension
This is the most common mistake committed by families of aged care residents—selling the family home to pay for the accommodation bond. Most families resort to this solution to take care of the aged care cost. However, it can actually cause some problems with the retirement pension of the elderly. Any amount left from the sale is considered as an asset of the Centrelink, a division of the Australian Government Department of Human Services. It means that, if there is some cash left after paying the accommodation bond, this may be gone too.
2. Having No Will or an Estate Plan
It is ideal for people who are getting ready to live in an aged care residence to prepare a valid will. However, it might surprise you that, often, they forget to do this. Or, if they do have one, it is outdated. Without any valid will, the family and children of these older people are likely to experience distress and conflict. It’s wise to check the status of the will of your loved one who is about to enter a residence for older people.
3. Not Getting Power of Attorney
It’s not a complicated process to acquire this document, yet some families forget or just choose not to secure until it is too late. Generally speaking, a power of attorney (POA) cannot be issued once your senior relative loses mental capacity due to a certain condition, such as stroke, dementia, and Alzheimer’s disease. When this happens, it will be difficult for you to manage your finances. So, always make it a point to secure an enduring POA before you send your seniors into an aged care facility.
4. Not Negotiating for the Accommodation Bond
It’s common that aged care facilities charge thousands of dollars (even up to hundreds of thousands of dollars) for the accommodation bond. Even if it will be refunded 14 days after death (deducted by the retention amount), it still means a lot of money. The truth is, aged care facilities are willing to negotiate regarding fees and charges especially when it involves huge amounts of money. The family can seek help from a financial planner who will create a structure of payment for the costs. This can bring down some fees or even have them waived.
5. Not Having a Financial Plan
Most families become surprised when they hear about aged care financial planning. Those who are without assets or have only a few do not need this. However, families with two or more definitely need to seek financial advice and plan things up. Trusts, superannuation income, pension income, a family home, secondary properties, annuities, significant cash holdings, shares, and investments are the most common things to be considered.
Aged care homes, like the Arcare aged care residence, can give you referrals for a reliable financial planner.