If your parents are getting older, they may be relying on you to help them make key financial decisions – including knowing what to do about their aged care. Learning as much as you can about their options will help.

Getting support

Home care packages are the government's way of helping Australians to stay in their homes for as long as possible before entering residential care. They offer a range of support services, including personal and nursing care, transport, food services, domestic help and medical assistance.

Depending on the level of care your parents need, the program features a range of packages with different subsidies. You can find out more about the home care packages on the government's My Aged Care website (www.myagedcare.gov.au).

Paying for home care and aged care

The amount your parents pay for home care is determined according to their income.

If they need to move into an aged care facility, some of the costs will be determined by a means test on their personal income and assets. Their family home will be exempt from the aged care assets test if it's occupied by a protected person, such as a partner or a dependent child.1

They'll usually need to pay an accommodation payment. This can be paid either as a lump sum or a periodic payment, or a combination of both when they move into an aged care facility. In addition to an accommodation payment, they also may have to pay a basic daily care fee and may have to pay an additional means tested fee.

If your parents want to sell the family home to cover the costs of residential care, it's important to know any remaining money from the sale will be subject to means testing. This could impact their aged care costs and how much Age Pension they receive.

You can find out more about home care costs and aged care home costs at the My Aged Care website (www.myagedcare.gov.au).

Know your aged care options

Everyone's situation is different, from the assets they have to the residential facility they prefer. A financial planner may help you and your parents:

  • Understand how paying for aged care could affect their retirement savings and Age Pension
  • Evaluate aged care facility fees and charges – and minimise them where possible
  • Maximise their entitlement to a government pension and claim what they're entitled to
  • Create a plan focused on making their money last and covering aged care costs in the long term

If you or your parents would like to speak to a Financial Planner, you can find out more here.

The My Aged Care website provides some information about services, costs and eligibility criteria, including how to get in touch with your local Aged Care Assessment Team (ACAT – known as ACAS in Victoria). They can explain what help is available to your parents and how they can access it.

What's more, you and your parents can also stay informed about any changes to aged care on the Department of Social Services website (www.dss.gov.au).

Explore our planning for aged care resources

Take me there

Things you should know

1 From the My Aged Care website: http://www.myagedcare.gov.au/aged-care-homes-costs-explained/income-and-assets-assessment-aged-care-home-costs

This article contains general advice only. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial planner before making any financial decision based on this information. This document has been prepared by Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139, (Commonwealth Financial Planning) a wholly-owned, but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. Commonwealth Financial Planners are representatives of Commonwealth Financial Planning. 

Information in this article is based on current regulatory requirements and laws. While care has been taken in the preparation of this document, no liability is accepted by Commonwealth Financial Planning, Commonwealth Financial Planning related entities, agents and employees for any loss arising from reliance on this document. Taxation considerations are general and based on present taxation laws. You should seek independent, professional tax advice before making any decision based on this information. Commonwealth Bank is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Before you make a decision about your combining your super if you multiple accounts, you should compare the costs, fees, risks and benefits of each super fund. It makes sense to consider whether you can replace any insurance cover you may lose when you bring your accounts together, as well as any costs for withdrawing from other super funds and any investment or tax implications.