The retirement living sector is growing rapidly in Australia as the population ages and demand increases for a spot in a retirement village.

For many people, the idea of having someone on site to help with property and garden maintenance is enough for them to make what can be a major change later in life. For others it is about the ready-made community and the easy access to social activities and a network of friends. And, as developers seek to entice younger and younger residents, they are dialling up the luxury and add-ons.

The type of accommodation varies widely between villages from apartments, villas and houses. Some retirement villages have a resort-style feel with a range of onsite amenities on offer including swimming pools, fitness centres, cinemas and cafes and there are often different dining and cleaning options available for residents.

Research released last year by the Property Council of Australia shows that retirement village residents are 41% happier; 19%less likely to require hospitalisation after only nine months; 15% more physically active; five times more socially active; twice as likely to catch up with family or friends and have reduced levels of depression and loneliness.

One important factor that sets retirement villages apart from residential aged care facilities is that retirement village living is considered independent living, generally without medical or personal care available through the village itself.

Different laws

Some residential retirement complexes include both independent living homes and aged care facilities. This set up can make the transition to aged care, if needed, less stressful especially if one member of a couple needs greater care.

However, the two operations are regulated quite separately under different laws and there are no guarantees that you can move smoothly from one to another when you want to.

Unlike assisted living or residential aged care, retirement villages are not regulated by the Federal Government but are governed under state and territory retirement villages acts. As such, the rules can vary between jurisdictions and villages.

Considering the costs

Buying into a retirement village can be a significant expense, making it important to understand the legal implications and ensure you carry out a thorough check to see if it is affordable.

In most cases you don’t own the village residence. A common arrangement is for a lease or loan type arrangement, where residents buy the right to occupy a home within the village for a specific period.

The level of fees and how they are set is a private commercial arrangement and not governed by any laws. The costs could be roughly what would be incurred if you owned your home. As well as an upfront price, there could be ongoing maintenance fees and deferred management fees, which reduce the amount you receive when you leave the village.

Knowing your rights and obligations, as well as the initial costs and ongoing fees and expenses are key considerations to a successful transition.

Financial and legal advice is highly recommended to ensure clear understanding of the purchase arrangements and contracts. Their level of complexity is not to be underestimated.

Extra services and support

It is most people’s aim to remain living independently in their own home for as long as possible.

For people living in retirement villages, this could mean accessing government subsidised home care services – for example, through the existing Home Care Packages Program. Depending on a person’s health, these services could include cleaning and domestic assistance as well as personal care, such as assistance with showering or the delivery of pre-cooked meals.

Following the introduction of recent reforms, a new Aged Care Act aims to increase the subsidies for services and equipment to assist people staying at home.

A new Support at Home Program will replace the Home Care Packages Program from 1 July 2025. The Commonwealth Home Support Program will transition after 1 July 2027.

The reforms also include significant changes to the funding arrangements for residential aged care.

For both home care and residential aged care, the focus will be increasing the quality of services and the rights of individuals, while at the same time looking for greater contributions from people accessing the services.

Retirement villages are largely lifestyle considerations, but you also need to consider your current and future care needs to ensure that the village you choose will remain suitable for at least the medium term.

Contact us to discuss your plans for retirement.

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Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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Changes to aged care fees are coming, and they will impact both home care and residential care. After a long wait and lots of speculation, the government has released details of the proposed changes. While some people will see their fees increase, the good news is that aged care remains heavily subsidised, and fees will continue to be based on your financial situation to help with affordability.

Here’s what we know so far:

• The government will continue to cover 73% of the cost of residential care and 89% of the cost of home care.
• These changes are designed to improve the quality of aged care and help providers meet growing demand.
• Most changes will only apply to people starting home care or entering residential care from 1 July 2025.

If you or a loved one need care soon, it might be worth getting advice to see if moving before the changes take effect could save you money and understand how you will be affected. While there’s still a lot to unpack, here’s a quick overview of what’s planned.

Proposed residential care changes

1. Room price cap: From 1 January 2025, some room prices might start to rise. Providers who want to charge more than $550,000 currently need approval, but this cap will increase to $750,000, making it easier for providers to increase prices.

2. RAD retention amount: You can pay for your room with a lump sum (Refundable Accommodation Deposit or RAD) or as a daily fee. Currently, RADs are fully refundable when you leave care, but from 1 July 2025, you may lose up to 10% of the RAD you paid.

3. Indexing rent: If you choose to pay a daily fee instead of a lump sum, this “rent” (called the Daily Accommodation Payment or DAP) will be indexed over time, meaning the amount could increase as time goes on.

4. Living expenses: Your contribution to daily expenses like food, laundry, and electricity could rise by up to $12.55 per day, depending on your financial situation. Some providers may charge more for higher standards or quality, so it’s important to check prices before deciding on a place to live.

5. Care expenses: Depending on your finances, you may be asked to contribute more to your care costs, which could include services like entertainment, bathing, and mobility assistance. The government will still cover most care costs, but your portion could go up by around $10 per day, with the lifetime cap rising from approximately $80,000 to $130,000.

6. Assessment of your home: No changes are planned for how your home is assessed when determining what you can afford to pay. If a spouse or “protected person” lives there, it remains exempt; otherwise, only approximately $208,000 of its value (indexed) will be included in financial assessments.

Proposed home care changes

1. New Support at Home program: A new program will combine the current home care options into 10 levels of care packages to better meet the specific needs of individuals.

2. Higher contribution fees: While clinical care will be fully covered by the government (up to the available budget of your care package), you may have to pay more for services like cleaning and gardening.

3. Means-testing: Your contributions to home care will now become means-tested, picking up assets as well as income, according to Centrelink rules.

The higher costs will mostly impact self-funded retirees and some part-pensioners but everyone could face higher costs (and bigger decisions), making it essential to carefully choose care providers and understand accommodation costs. The changes may simplify some of the confusion we’ve seen under the current system, but now, more than ever, it’s important to get advice to understand what you’ll need to pay and how these fees might change as your financial situation evolves.

Planning ahead is key, and some decisions can feel overwhelming. If you have any questions or need help planning for aged care, call us at 03 9723 0522, and we can guide you.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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If you are worried about the need to access aged care, you are not alone. When the time comes it can be daunting, with a lot of new information to take in and many decisions to make.  The responsibility to make the right decision for yourself, or a loved one, may weigh heavily on your mind. 

From our experience, the four of the most common worries that people raise include:

Quality of care: One of the main concerns is whether the quality of care provided will meet needs and expectations. Reports of inadequate staffing, neglect, or instances of abuse have contributed to this worry. People are often afraid that they might not receive the attention and respect they deserve and want assurance that care will be provided by competent and compassionate carers.

Cost and affordability: Financial considerations are likely to be a significant worry. Costs can vary widely depending on the type of care required and your financial situation. Understanding what government subsidies are available and how much you will be asked to contribute, as well as how to fund other expenses, requires careful planning.

Access and availability: Many people are experiencing waiting lists and long delays to access aged care services, in both residential and home care. Concerns about the availability of suitable aged care services that meet specific health and lifestyle needs can add to the stress and are a reason for planning ahead.

Transparency and accountability: There is a growing demand for transparency and accountability within the aged care sector. People want clear information about the standards of care and safety records of aged care providers. They also want assurance that mechanisms are in place to address any concerns or complaints promptly.

The government has been embarking on a program of change, with aged care reforms to address concerns. The aim is to instil greater confidence that the aged care sector is safe and effective, while improving the overall experience for older people.

Fear of the unknown adds to stress levels, so start your planning early. Don’t wait for the crisis to occur.

Start by talking to us about your future plans and concerns. We can help you sort the financial aspects and direct you to other services and resources where you need further help with choosing, evaluating or understanding how aged care will work. Star ratings on the MyAgedCare website can also help to evaluate and compare providers.

Addressing your worries will require a comprehensive understanding of available options, financial planning, and advocating for the best possible care. These are decisions that are best not to make alone.

Call us on 03 9723 0522 to get started and remove some of the stress and worry from your future care needs.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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Confused about aged care fees and what it all means? You are not alone. In this article we simplify the basics of aged care fees for you.

If you, or someone you love, need to make a move into residential aged care, understanding the fees and getting a clear picture of what it will cost is not easy. There are all sorts of fees and you will come across a myriad of acronyms such as RADs, DAPs, MPIRs, MTAs and MTFs.

So where do you start and how do you navigate through this maze? And what might change in the future, following the recent release of the Aged Care Taskforce report on aged care funding?

Why so many fees?

A move into residential care is essentially a move into a new home – just a home with built-in care and support. Just like living in your home, the fees for residential care can be divided into three categories:

• Paying for accommodation
• Paying for daily living expenses
• Paying for care services.

The way these fees are calculated is different to the spending choices you have while you live in your own home. The government sets some of the rules and fees. Other fees may be set by the care provider.

Paying for accommodation

Paying for your room is probably the most complicated part.

The cost of a room can be anywhere up to around $2.5m with the average around $400,000-$500,000. While you are not buying property,  you still need to either find a lump sum of money to buy the right to live there or generate cashflow to rent your room.

This is a cost you need to fully fund, so it is important to make affordable choices. But if you are assessed to have low financial capacity, the government sets a different pricing structure and might help by paying some (or all) of the room cost.

Some of the discussion on reforms in this space may see the phasing out over time of the lump sum purchase option, with everyone just paying a daily rent. It is also possible, that until that point, new lump sums paid may not be fully refundable.

Paying for daily living expenses

Once you move into care, many of the daily bills you receive for things like food, electricity, gas and cleaning will no longer come to you. Instead these are paid by the care provider and you will be asked to pay a flat daily fee to help cover the shared costs of these expenses.

Potential reforms in this area may see residents paying higher fees for these services. Currently the government sets a flat fee for all residents in all residential care services, but potential changes may see this being set individually by care providers based on the level and quality of services provided.

Paying for your care

 On average, the government currently funds around 75% of care costs, with the remaining 25% paid by residents according to a means-test which determines financial capacity.

The decisions you make around how to structure your assets are important as they may impact how much you will be asked to pay. To help with planning there is an annual cap and a lifetime cap on the fees payable.

It is generally agreed that these costs are high and need to be subsidised by government but there is not a clear direction yet on where reform will go in this area. Some proposals consider that means-testing should be abolished with the government paying the full cost. Other proposals consider that means-testing should be increased so that wealthier residents pay more of the cost. We need to wait to see what the Government decides to do.

If you need to make decisions

Making aged care decisions on your own is hard. There are so many moving parts with family preferences, taxation, age pension, estate planning and fee implications. That’s why we are here to help.

As an experienced financial planner who specialises in aged care advice we have the experience, knowledge and tools to help you review your options and make good decisions. If you need help, or want to start planning ahead, call our office on 03 9723 0522 to make an appointment to discuss.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Many people think they can’t afford to get aged care advice, but the reality is you probably can’t afford not to get advice.

RADs, DAPs, MPIRs, MTAs and ACATs !! These are just a few of the acronyms you will face when navigating aged care decisions. It might even feel like you’ve landed in a foreign country where you don’t understand the language or the rules.

Navigating your way through aged care and the jargon is not easy. Frustration, confusion and anxiety are feelings you are likely to experience, especially if you have arrived at this point with little preparation.

Some tasks are just too complex and too important to do on your own.

That’s where we can help. You don’t have to make these decisions or interpret the language on your own. We have the experience and expertise to help you make well-informed aged care decisions. We can show you how you can afford the care you need and understand how it all works – saving you time, stress and money.

Avoiding mistakes is a good reason to seek advice. Four key mistakes we often see people make when they don’t get advice include:

• Selling the home without understanding the consequences
• Being afraid to pay a lump sum (refundable accommodation deposit – RAD)
• Not generating enough cashflow
• Providing the wrong information to Services Australia and paying too much in fees.

Financial advice is important, but not all advice is good advice. Sometimes things can go wrong. To ensure you are protected, is important to get advice from someone who has experience and education, is licensed under an Australian Financial Advice Licence (AFSL) and is listed on the ASIC Financial Adviser Register. If something does go wrong, you then have access to dispute resolution processes and professional indemnity insurance.

Advice should focus on more than just the costs on date of entry into care. You want the advice to also forecast how your finances will be affected over time, to make sure you don’t run out of money or make bad decisions. Examples of advice gone bad, include:

• If keeping the home, not understanding how the age pension changes after two years.
• Structuring finances to qualify as a low-means resident, without realising this may make it harder to find a place with some aged care providers.
• A person may gain comfort that the home is exempt if an eligible carer continues to live there, but what seems like an affordable option could soon be a financial disaster if the carer loses income support and this was not anticipated.
• One child in a family uses their own money to help a parent pay the lump sum Refundable Accommodation Deposit/Contribution, and only too late realises that this resulted in higher aged care fees and an estate dispute when they want to recover the money.

Our advice follows a logical process to consider the financial situation when you first move into care, what will change after that move, what the situation will look like after two years and what to expect when the estate needs to be finalised. This helps to anticipate future changes and mitigate problems as much as possible.

When aged care decisions go badly, the mistakes can be costly both financially and emotionally.  Let us take away some of the stress – we are licensed financial advisers and have the experience and qualifications to help you make well-informed aged care decisions. Contact us on 03 9723 0522 to make an appointment to discuss your aged care needs.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.