To the outsider, the aged-care industry can be very confusing. Many decisions must be made, many of which involve significant sums of money, and often under time pressure. That’s why we, Joseph Palmer and Sons, have released this testimonial video.
The terminology in aged care can be confusing to the uninitiated, and dealing with questionnaires like the Centrelink form – which is 28 pages long with 145 questions – can be hugely time-consuming. There are RADs (essentially a bond), means-tested fees, daily care fees and extra services fees to consider.
the aged-care industry can be very confusing
Aged-care cannot be wished away. As people live longer, more and more will end up in aged-care. The number of people in permanent aged-care in Australia is expected to triple in the next 35 years, from 225,000 today to 700,000 in 2050.
In this video Rodney Horin, from aged-care experts Joseph Palmer & Sons, explains the key issues of aged-care and runs through some of the decisions that families have to make. Importantly, he gives practical advice about the key things that families should look for when choosing an aged-care facility, and how significant amounts of money can be saved.
aged-care in Australia is expected to triple in the next 35 years
The video includes interviews with three clients of Joseph Palmer & Sons, who tell their personal aged-care stories.
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Video Transcript Script – Joseph Palmer & Sons
As Australians live longer, more and more of us will end up in residential aged-care. The number of people in permanent aged care in Australia is expected to triple in the next 35 years, from a quarter of a million today to 700 thousand in 2050.
Aged care is a very complicated industry and many decisions have to be made, often under time pressure and often involving large sums of money. People are confronted with a host of acronyms which they won’t understand – RADs, DAPs, DACs and RACs – not to mention Centrelink fees and Means-tested fees.
The Centrelink form for example, which must be filled in to determine how much a resident must contribute to aged care, is 28 pages long, with 145 questions.
A bond – now called a Refundable Accommodation Deposit, or a RAD – must be paid, and can be as high as $2 million to secure a bed in an aged-care facility.
The bond is not an investment. Essentially, it works like an interest-free loan to the aged-care facility. Willingness to negotiate on the bond depends very much on the demand for beds – and the supply of beds – in a particular aged-care facility.
We went on a tour and looked at all the aged-care facilities, and my father had fallen in love with one of them. It looked beautiful and looked away too expensive for their budget. I rang Joseph Palmer and Sons and told them that he had fallen in love with this place and could they get him in there and within two weeks they had done it. It was incredible. I couldn’t believe they’d achieved that they did with the budget that we had.
If the bond cannot be paid, it is possible to choose to pay interest payments on the outstanding bond amount, or a combination of the two.
Then there are other fees to pay, which are invoiced monthly. The standard daily care fee for a resident in an aged-care facility is $50 per day – which is 85% of the full age pension. All residents must pay this fee. However, it does not cover the full care costs of the resident. The government may ask the resident to pay an additional amount as a Means-Tested Fee and then the Government pays a subsidy to the aged-care facility to make up any shortfall.
The Means-Tested Fee is an attempt by the government to get residents with the financial capacity to contribute to the cost of care. This fee is based upon the income and assets of the aged-care resident and can range from nothing to a maximum of $244.97 per day.
An Extra Services Fee, which can be as much as $120 per day, provides for additional services like a choice of meals, alcohol at meals, expanded activities program and cable television.
All these fees can add up to as much as ten thousand dollars a month.
No, we didn’t sell the family home, and that was based on the advice and the financial analysis and scenarios that had been run by Joseph Palmer and Sons. They provided a number of scenarios that we could assess the viability of. As it turned out the two options were pretty much the same – to rent or to sell the family home.
Different families look for different things at aged-care facilities, however at Joseph Palmer and Sons we believe the core features should include:
- Close proximity to family.
- A culturally compatible facility.
- The number and quality of nursing staff, therapy services offered, assistance with personal care and emergency assistance.
- The ability to provide a range of care needs if a resident’s health declines.
- Ongoing daily programs and activities to engage and stimulate the residents.
Eventually, we had to find a home for both my parents in a couple of weeks and make all the financial decisions. The weight of responsibility was on finding the best place for them during that short period of time. I didn’t think anyone could make that kind of decision and go through that process within a couple of weeks. But luckily, I had Joseph Palmer and Sons to help me with that so it was possible.
Joseph Palmer and Sons are aged-care financial specialists. We specialise in achieving the best financial outcome for families. We know about the key strategies to reduce the cost of aged care. They include:
One: Negotiate on the bond, to potentially reduce it significantly.
Two: Look at potentially part-paying the bond, which can free up capital for other expenses.
Three: Structure finances so that a parent may be able to keep their full pension as well as retaining the family home.
Four: Lower the daily means-tested fee.
Five: Negotiate the extra-services fee and determine whether services offered represent value for money.
There were three key major outcomes for us. The first was saving us as a family an enormous amount of money. Second is the accommodation she is in is five-star – she is in a really beautiful facility, one we never dreamed of – and thirdly the time that they saved me. I was able to spend time with my mum in hospital and in the rehab facility and I wasn’t bogged down with the endless paperwork; that’s what they did for me.
I’d describe my time with Joseph Palmer and Sons as a really efficient use of my time and financial resources. You are making life decisions about people you care about, you are making decisions that have significant financial importance. It’s the first time you have probably done it; you have a guide that has done it day-in, day-out and has significant experience with it.
If there is ever an area where people need professional guidance, it is aged care.
Please call us at Joseph Palmer and Sons to see how we can help you save money and ease the transition into aged-care.