Aged Care Financial Advisers Brisbane

The first meeting costs you nothing, and you’re not committed to anything. It lasts about 45 to 60 minutes. You can come to our office in Brisbane, or we can do it via video if you’d like. Our objective in our first meeting is simple: to get a handle on where your parent is in the aged care process, what assets are on the table, and what income is available. And, just as important, to assess whether financial advice will actually save or protect enough money to offset our fee.

We’ll ask about the family home, superannuation balances, pension status, any existing investments, and what type of care you’re considering. You’ll walk out knowing what the key financial decisions are and what’s at stake in dollar terms. You’ll also know if it makes sense to engage us to provide a statement of advice.

Families often come to the consultation with a stack of paperwork from the facility and no idea where to begin. That’s perfectly acceptable. The consultation is there to sort through the noise.

If we proceed past the initial consultation, we prepare a formal statement of advice that addresses the particular financial decisions your family are making. The plan is designed entirely from the move to care, without retirement planning in general, and then aged care is tacked on.

The document will generally include the modelling of the financial implications of various options for paying for accommodation (lump sum and/or daily payments, with the option to combine both), as well as strategies to ensure maximum Age Pension entitlements during and after the transition. If the family home is involved, we will also model the implications of selling, renting, and keeping the house vacant, as well as what this means in terms of Centrelink and capital gains tax implications later on.

Every recommendation is supported by the actual numbers involved. The dollar difference between choices is spelled out in real numbers.

Sometimes we get through the initial consultation, and it’s clear that no formal advice is required. Perhaps your parents’ assets are simple enough that the best structure for the accommodation payment is immediately apparent. Perhaps your parent is already receiving the maximum Age Pension, and the means-tested fee outcome will be the same regardless of your actions.

If that’s the case, we’ll let you know. You won’t be paying for advice that you do not need, and we won’t inflate complexity to justify a fee for our services. This is more common than you think, especially when the entry into care is for someone with relatively modest assets and little scope to restructure anything. The initial consultation is partly for us to spot such cases and save you the expense. If you’re not sure whether professional advice would make a difference in your case, our article on whether financial advisers are worth it covers the key factors to consider.

There is an accommodation payment for all new residents in permanent aged care, and this is very important from a financial perspective. The refundable deposit, or refundable accommodation deposit (RAD), is a lump sum, usually between $300,000 and $550,000 in Brisbane, and is refundable when your parent leaves care. Daily accommodation payment (DAP) is a rental-type alternative, based on an amount equal to the RAD and charged at a government-determined interest rate. You can also combine both of these.

The choice of which one to pay depends on your parents’ asset position, income, pension eligibility, and length of stay in care. Paying the full RAD ties up assets but saves you from paying the daily fee. Paying the DAP maintains liquidity but costs around $40 to $75 a day based on current rates for a $550,000 room. For most families, a mix of partial RAD and partial DAP is likely to be the best solution if you add up pension and means-tested fee calculations.

Your aged care financial adviser will run each scenario against your parent’s actual figures so that the comparisons can be made side by side.

In addition to the basic daily fee, which everyone must pay regardless of their wealth, Services Australia also charges a means-tested care fee, depending on your parents’ assets and income that they are able to pay. This fee ranges from a few dollars a day to over $250 a day, depending on their position financially.

The calculation also takes into account the value of financial assets, superannuation if the person is above Age Pension age, income streams, and even the family home. Even small changes in the way that assets are structured can make a big difference in the amount of means-tested fee that has to be paid. The timing of when a RAD is paid can make a big difference in the calculation of the fee for the entire period of care. If your parent has high superannuation balances, getting advice on superannuation before entering care can be beneficial in structuring these assets to minimise the impact on the means-tested fee.

It is our job to help you understand just how each asset is being assessed and whether there are strategies to minimise the amount of means-tested public funding without affecting other potential costs.

The family home gets special treatment in the aged care means test, but there are conditions attached to it that may come as a shock to some. If a “protected person” continues to live in the family home, such as a spouse or a dependent child, or in some cases, a close relative of the resident has lived there for five or more years and meets income tests, then the family home is exempt from the assets test altogether. If no one eligible continues to live in the family home, it is included as an asset, but only up to a certain threshold.

This distinction alone can cause the means-tested care fee to vary by thousands of dollars annually. It also has a direct bearing on the sell, rent, or hold decision, as we will see in the next section. It is important to have a grasp of the assessment rules before you put your property on the market or enter into a lease, as some of the decisions are hard to reverse once the resident is in care and the means test has been applied.

Most families are unaware that the price quoted for a room in an aged care facility for RAD payment is negotiable. The price for accommodation in an aged care facility is set by the facility. There may be room for negotiation, especially for a room that has been vacant for a while or when the facility is not fully occupied. The gap between the quoted price and the price that can be negotiated can be as much as $20,000 to $50,000 or more.

Our aged care advisers deal with this negotiation process directly with the management of the facility. We are aware of the market rates for similar rooms in the Brisbane market and are also aware of the incentive structures in play for these facilities; we therefore deal with this process based on knowledge rather than emotion. Families in a position of stress need to make a decision regarding a parent in a care facility are not in a position to be haggling on price for a room, and they shouldn’t have to be. 

We also check the accommodation agreement before you sign to make sure the payment terms and fee structures are as discussed, and that the refund conditions are in accordance with current legislation.

The work does not stop once your parent is settled. Aged Care Facility Billing is surprisingly prone to errors. We have seen errors in the calculation of the means-tested fee and the direct charging of government subsidies. We have also seen daily accommodation payments, which are calculated on out-of-date RAD figures.

After move-in, we check the initial invoices to ensure that they reflect the accommodation agreement and the means-tested fee letter provided by Services Australia, as well as our previous advice. If something does not add up, we check it with the facility on your behalf. This process provides families with assurance that all costs are in accordance with what has been agreed.

We have our own Australian Financial Services Licence. We’re not owned by a bank, an insurance company, or a product provider. This is important in aged care advice. The recommendations we make to you regarding the way to structure accommodation payments, the type of assets to hold, the need to restructure superannuation, and the type of insurance to keep or cancel are not influenced by the sales of products. The recommendations are made in relation to your parents’ interests and nothing else.

The fact that we are owner-operated also means that the people who have spent years building this business are the same people sitting across the table from you. There is no middleman between the adviser and the client, and there is certainly no incentive to sell a product to the family that benefits the company at the expense of the family. You can find out more about our business model and our team on our page on independent financial advisers.

Our aged care financial advisers are Certified Financial Planners with nearly two decades of experience helping families navigate the aged care system. This includes many cycles of legislative change and thousands of means tests, as well as numerous negotiations with aged care facilities to understand what’s possible and what’s not.

Aged care financial planning is a field that sits at the intersection of superannuation law, social security legislation, tax legislation, and aged care legislation. It’s one of the most technically complex areas of financial advice in Australia. It’s a field that requires experience as the interaction between these systems is not always logical and easy to understand, and getting one element wrong can cost a family tens of thousands of dollars in the long term. If the family’s aged care needs are accompanied by a broader need to think about how to pass on wealth to the next generation, we can also assist with generational wealth advice.

Solace Financial has been recognised as a finalist for the Aged Care Adviser of the Year award in the Aged and Community Care Providers Association and the Adviser Wealth Management Awards. This acknowledges the depth and results of our work in this area for Brisbane’s families navigating the aged care system. We bring it up here as background information, not as a way to draw attention to an accolade. The work speaks for itself.