Families caught out after loaning money to pay for aged care – how specialist financial advice can help

Families caught out after loaning money to pay for aged care – how specialist financial advice can help 

Recently we received a query on our agedcare101 forum from a woman who had loaned money to her mother to pay for her Refundable Accommodation Deposit (RAD) – the main fee you pay for aged care. 

Even though the family had a mortgage document stating that the money was a loan, the Department of Human Services said it was still considered to be part of the mother’s assets – and her basic daily fee, which is mean-tested based on your income, went up accordingly. 

It seems unfair – but the fact is when it is paid, the RAD becomes the resident’s asset – and it is assessable for the daily fee. 

While some families have successfully argued that a loan should not be counted as an asset, they had to take their cases to the Administrative Appeals Tribunal of Australia (AAT) – a time-consuming and stressful exercise. 

For us, it yet again highlights how complex the finances around aged care are – and how important it is to seek the right advice. 

Specialist advice worth the investment 

With the average RAD now around $350,000, rising from $500,000 to well over $1 million in the capital cities, a specialist aged care adviser can help if you are looking to provide considerable financial assistance to parents. 

This can include advice on whether it would be better to pay a RAD in full or as a Daily Accommodation Payment (DAP) or a combination of the two as well as issues such as selling the family home, impact on pensions, aged care loan products and using the Government’s Pension Loans Scheme. 

Placing a parent into aged care is a tough time – both emotionally and financially. As one of the commenters says: “What a pity it is that one’s last days with a loved one might be spent trying to fathom the depths of such matters.” 

Seeing a specialist adviser is not cheap. We estimate it will cost a minimum of $1,000 and likely more. But it’s an investment that can save you a lot of money – and stress – in the long run. 

You can find more information about choosing a financial adviser below. 

Credit: ABC. 

https://www.moneysmart.gov.au/investing/financial-advice/choosing-a-financial-adviser 

https://www.agedcare101.com.au/contributors/annie-donaldson


https://www.agedcare101.com.au/contributors/jill-donaldson-care

 

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A special thanks to our contributors

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Caroline Egan

DCM Media, agedcare101

Caroline has a wealth of experience writing within the retirement and aged care sector and is a contributing journalist for the Villages.com.au and agedcare101 blog and accompanying newsletters.

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Ian Horswill

Journalist

Ian is a journalist, writer and sub-editor for the aged care sector, working at The DCM Group. He writes for The Weekly Source, agedcare101, villages.com.au and the DCM Institute fortnightly newsletter Friday. Ian is in daily contact with CEOs of retirement living, land lease and the aged care operations and makes a new contact every week. He investigates media releases, LinkedIn and Facebook for a good source for ideas for stories.

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Lauren Broomham

Retirement and Aged Care Journalist

Lauren is a journalist for villages.com.au, agedcare101 and The Donaldson Sisters. Growing up in a big family in small town communities, she has always had a love for the written word, joining her local library at the age of six months. With over eight years' experience in writing and editing, she is a keen follower of news and current affairs with a nose for a good story.

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Jill Donaldson

Physiotherapist

Jill has been practicing as a clinical physiotherapist for 30 years. For the last 13 years she has worked solely in the Aged Care sector in more than 50 metropolitan and regional facilities. Jill has also toured care facilities in the US and Africa and is a passionate advocate for both the residents in aged care and the staff who care for them. She researches and writes for DCM Media.

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Chris Baynes

DCM Media, agedcare101

Chris has been a journalist and publisher in the retirement village and aged care sectors for 11 years. He has visited over 250 retirement villages and 50 aged care facilities both within Australia and internationally. Chris is a regular speaker at industry conferences plus is a frequent radio commentator.

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Annie Donaldson

Nurse and Carer

Annie has a long career in both nursing and the media. She has planned and co-ordinated the medical support from both international TV productions and major stadium events. In recent years she has been a primary family carer plus involved in structured carer support.