Aged care financial planning tips

As we age, it is essential to make a plan for the future. This means being prepared for and managing any costs associated with personal and aged care services. There may be costs for receiving help at home, or moving into a retirement village or nursing home. We recommend understanding the options, costs and subsidies that are available, and developing a long term plan. By doing this, you can make well-informed aged care financial decisions.


Financial planning advice for older people

It’s highly recommended you speak with an aged care specialist or financial adviser to recieve guidance and fully understand the costs involved and identify any financial assistance or support that may be available to you. The aged care financial planning tips contained in this article should be considered as general in nature. Expert aged care advice from a financial adviser should be sought- they will be able to answer questions about this complex area of aged care. You can also receive free financial information through the Australian Government Services Australia’s Financial Information Service(FIS).

My Aged Care also has handy links to organisations, services and tools that can offer financial guidance, advice, and support and an online fee estimator tool that can help. The estimator tool asks a series of questions about your personal circumstances, such as your relationship status, who lives in your home and whether you own it outright. You will also need to provide all the details on:

  • your income including age pension payments

  • your cash flow

  • money held in bank accounts

  • money held in trusts

  • managed funds

  • superannuation

  • any debts

Once you’ve answered these questions, the tool will give you a general idea of the basic daily care fees, means-tested fees, and accommodation costs you may need to pay for residential aged care.

Options for aged care

The aged care support system is designed to assist older Australians who require help in their own home or who are no longer able to live independently. The cost of aged care services can vary depending on the level of care required and the type of care that has been assessed as suitable.

Home care packages are available to assist with a range of services, from basic housekeeping to more intensive care needs. The cost of these services is typically based on your income and assets, and can vary depending on the level of care required.

For people who require a higher level of care and support, residential aged care facilities may be a suitable option. The cost of residential care can also vary widely, depending on the level of care required and the type of facility chosen.

Aged care financial advice

Overall, the cost of aged care in Australia can be quite high, but there are government subsidies and financial assistance available to help offset these costs for those who are eligible. Ultimately, the cost of aged care support services will depend on your personal finances, unique situation and individual needs. It makes sense to seek support to understand your finances and gain sound advice through a professional financial planning service.

Options for staying at home

The wealth tied up in your home can be a valuable resource for improving your retirement funding and lifestyle. By tapping into this resource, you can increase your flexibility and choices, make more informed decisions, and most importantly, continue living in your family home. Unlocking the equity in your home can provide you with additional income and financial security during your retirement years. There are various ways to access the wealth in your home, including downsizing, a reverse mortgage, and home equity release schemes.

This allows you to cover living expenses, pay for healthcare costs, and fund travel or other leisure activities. By staying in your family home, you can maintain important social connections, enjoy familiar surroundings, and experience a sense of security and comfort. This can contribute to a happier and more fulfilling retirement.

What is the cost of a home care package?

The amount you may be required to contribute towards the cost of a package is based on your income level, cash, and assets. An income assessment, which you can complete through Centrelink, determines your contribution. You can learn more about the Home Care Package means assessment by visiting the Services Australia website.

Starting from 1 January 2024, the basic daily fee for each Home Care Package level is:

  • Level 1: $11.22

  • Level 2: $11.87

  • Level 3: $12.20

  • Level 4: $12.53

Your means test will determine whether you need to pay more than this amount. It’s also possible to pay extra fees if you choose to access additional services that aren’t part of a standard Home Care Package.

What is the cost of an aged care facility?

In general, residential aged care facilities are means-tested, which means that the cost of care is based on your income and assets. The government sets a basic daily accommodation payment, which covers things like meals, accommodation, and basic care services.

This fee is calculated as a percentage of a person’s daily income and assets. In addition to the basic daily fee, some residents may also be required to pay a means-tested care fee, which is an additional contribution towards the cost of care based on their financial situation. There may also be additional fees for extra services or amenities, such as private rooms or higher levels of care.

Costs associated with the aged care system

Several factors can impact the cost of nursing homes in Australia, including the type of facility, the financial resources of the resident, their eligibility for funding, any additional services or amenities, the age of the resident, and the level of care required.

The type of home can play a significant role in determining the cost. High-end facilities with more amenities may have higher fees than more basic facilities. Additionally, the available assets, savings, and income of the resident can impact the cost, as can their eligibility for government funding. A refundable accommodation deposit must also usually be paid.

Extra add-ons, such as private rooms or specialised aged care services, can also increase the cost of accommodation fees. The resident’s age and the level of care required are also significant factors that can influence the overall cost.

Calculating an exact dollar figure for nursing or residential home costs is a complicated process. However, by carefully considering these factors, individuals and families can make informed decisions about the best facility for their loved one’s care needs and budget.

Payments for carers

There are a few financial support options available to those who provide constant care to someone in their home. The first is called the Carers Payment, which is paid out fortnightly and helps cover basic living costs. Carers’ payments are means-tested. To receive the Carers Payment, both you and the person you are caring for must meet income and asset requirements, which are adjusted each year.

This payment is specifically for people who cannot fully support themselves through substantial paid employment due to caregiving responsibilities. Another option is the Carers Allowance, by which money is paid out fortnightly. Carers should also seek out financial planning advice and finance guidance from a financial adviser, so decisions can be made based on their specific circumstances.

This payment is meant to help with the additional costs of caring for someone beyond basic daily living expenses. In addition to these regular payments, recipients of either the Carers Payment or Carers Allowance are also eligible for an annual lump sum payment called the Carers Supplement. To qualify for these financial supports, the care recipient must meet certain criteria. They must be either frail aged, have a severe medical condition, or have a physical, intellectual, or psychological disability.

Finding value for money service providers

Another aged care planning tip is to make sure you are receiving good value services. Your monthly statement can provide valuable insights into whether your package funds are being used effectively and efficiently. By carefully reviewing your monthly statement and aged care costs, you can assess how your provider is using your package funds and determine whether their fees are reasonable.

This can help you ensure that you’re getting the most out of your care package and that you’re receiving the level of care and support that you need. If you’re unsure how to interpret your monthly fees and charges, you should always ask the providers or financial advisers to explain the aged care costs you have been billed for.

Nursed Care for help at home

It’s important to speak with a financial adviser to fully understand the options available to you and choose the one that best meets your needs and goals. The aged care industry and making good aged care financial decisions can be complex. At Nursed Care, we help meet your aged care needs by providing aged care services to help you to remain at home longer, including:

  • personal care

  • low-level care

  • high-level care

  • domestic help and home care services

  • social and community aged care support

Contact us to learn more about Nursed Care aged service options.

Related Questions

When paying for residential aged care in Australia, the family home is usually considered an asset and is therefore counted towards the individual’s overall wealth. However, there are some exceptions to this rule. If a person considered a ‘protected person’ is living in the home as their primary residence, it may not be counted as an asset.

It’s important to note that the rules around protected persons and the family home can be complex, and we recommend that you seek advice from a financial adviser or aged care specialist to understand the various options and obligations.

Daily living costs can mount up and you may be concerned that you will not have enough money to meet your future needs as you age. The age pension may not cover the costs of your aged care. Financial advisers can guide you towards a solution for funding aged care supports. By getting help with financial planning as early as possible, you will be able to create a plan you can afford. If you are unable to cover the costs of high-level aged care, you can also apply for financial hardship assistance.

Need qualified care?

At Nursed, we offer a full range of care and disability support services, assisting you to live the life you want to live. Contact us today.

Connect with Us

Our friendly staff are eager to help you live your best life. Whether you need new accommodation, supports, home modifications or simply want to join our day programs we’ll ensure you’re looked after. 

Contact Us V2