What’s missing from the ‘care’ plan

But perhaps I’m being too harsh. Budgets are about priorities and perhaps the government could simply not find an extra $10 billion a year with all the competing priorities. That is, after all, a lot of money. Of course, in a few years the government will hand out the stage three tax cuts worth $16 billion a year. More than half of those tax cuts go to the top 20 per cent of taxpayers. Budgets are indeed about priorities. The lack of dollars translates into a lack of care. A good example of this was the waiting list for Home Care Packages (HCP). The government announced an additional 80,000 HCPs, which sounded great – until you realised it would take two years to deliver them and the waiting list at the end of last year (2020) was 97,000. It simply won’t fix the problem. Of most concern since the May Budget announcement has been how things have gone ominously silent. We might think the government is earnestly beavering away in the background, implementing the royal commission’s suggested reforms, ensuring that the horrible stories that were uncovered will never happen again. This would be a reasonable assumption if the government had a track record of achievement after announcements. But the current government has perfected the art of looking busy. It makes lots of announcements without actually following through. I fear that hearing nothing means that nothing is happening. After all, reform is hard. It requires a plan, and dedication. The royal commission provided the government with the plan, but does it have the dedication to follow through?

Matt Grudnoff is a senior economist at The Australia Institute. You can enjoy more of his commentary in the Spin Bin in episodes such as What the Government’s Not Telling You About the Future.

Lincoln Hopper, St Vincent’s Care Services CEO, offers his view of the reform needed in aged care.

There is something truly significant missing from the federal government’s $17.7 billion aged care reform package – people. While I support the intention of the reforms, I believe the proposed investment in staffing – primarily focused on nursing and deeply rooted in a clinical model of care – is limited and potentially misleading. There is much more to caring than meeting someone’s medical needs. Aged care is just that – care. Most of us who work in the sector see care in a much more holistic sense, and we consider it to be a vital part of providing exceptional, all-round support, as well as ensuring our residents feel valued and safe. We need to take a human-centred approach when working across our aged care homes; to shift away from focusing on a medical model, to one that emphasises investment in our people. At St Vincent’s Care Services, we have over 550 lifestyle team members, volunteers and pastoral carers. These aren’t clinical roles, but their work is absolutely crucial when it comes to residents enjoying rich and meaningful lives. So, why aren’t we talking more about these contributions when it comes to debating how to improve aged care, and provide residents with the best experience possible? These are our residents’ homes, not a hospital, and for many, our staff are like a second family. The work of these staff must be recognised and brought into the conversation. They shouldn’t be overlooked as they seem to have been by those with the task of delivering aged care reform. We also know that outside of the clinical, there are a host of other staffing-related factors that influence quality outcomes, including the skills, qualifications and experience of these dedicated staff members, the quality of training, organisational culture and the capacity of managers and leaders. We can’t take a rigid, cookie-cutter approach to the nature, make-up and skills mix of staff.

This is an edited version of the original article.

Too many people fail to plan for aged care – don’t be one of them

Two key areas that should be considered – ahead of time – when a move into residential aged care looks likely.

Planning for residential aged care is all too often at the bottom of our to-do lists. When the time comes to give it more careful Powers of attorney can include the power to make decisions about your financial and legal affairs and to make decisions about your lifestyle (including consideration, many of us may be overwhelmed

by the procedural requirements, and some of us 1 treatment you should receive. may not be capable of having a conversation about decisions being made due to ill-health. Input from government departments, healthcare professionals and financial institutions is likely to be required. But where to start? Your financial adviser can help. Whether the first conversation with an adviser happens before, during or even after making the transition to aged care, he or she can help ensure your or your loved one’s needs – both financial and emotional – are fully considered. If you need help managing your affairs, you can choose to give someone you know and trust the power to make decisions for you. Known as a ‘power of attorney’, it will allow the person to manage your affairs when you do not want to or are no longer able to. For example, a person may find it hard to sign documents because they have poor eyesight or unsteady hands. where you live) and what medical or health 1. Finances Your adviser will need to understand your income and assets to help determine the types of fees and how much you could be asked to contribute towards your aged care costs. He/she could ask the following questions:

Are you or your loved one receiving any income support payments, for example from Centrelink or the Department of Veterans’ Affairs (DVA)?

Any such payments need to be considered when determining how much you/your loved one will be required to contribute to aged care costs. There may be records readily available, but if not, contact the relevant authority.

What are your/your loved one’s assets, income and/or liabilities? This can include savings, shares, account-based pensions, annuities, debts and loans.

Financial statements can help identify the value of holdings. Contact with relevant financial institutions and the person’s accountant can also assist.

22. The family home Using the family home to fund aged care can be a complicated decision, with many interdependent factors to consider.

Working out what to do with your family home is one of the biggest decisions you and your family will face when moving into residential aged care.

While some people are keen to sell their home once they no longer need it or sell the property to fund aged care accommodation costs, others choose to keep it and receive ongoing rental income from the property. There are pros and cons to both sides.

Paying aged care fees

When you move into residential aged care, depending on your assets and income, you may be required to pay an accommodation contribution or accommodation payment. How you fund your or your loved one’s aged care fees may depend on your financial assets. For some, these accommodation costs may be funded from the sale proceeds of the family home.

If you choose to keep your family home, other funding strategies may be considered. You will also need to pay ongoing care costs for as long as you remain in the aged care facility. This could include the basic daily fee, a means-tested care fee and any extra service or additional fees. Depending on your level of income and assets, these costs can vary.

Who is living in the home?

To prepare for a conversation about the family home with a financial adviser, he/she will also want to know if anyone is currently living with the person moving into residential aged care.

Aged care fees could be reduced if someone continues to reside in the former home after you or your loved one transitions into residential aged care.

This will influence the funding strategy a financial adviser develops.

No additional information is required if the person residing in the former home is a spouse. Where that person is not a spouse, the adviser would need to confirm whether the person provides care and/or is a family member. How long they have lived in the former home and any income support payments they may be receiving from the government will also be relevant.

Rental property maintenance and costs

While you’ll earn ongoing rental income from your property if you rent it out, you also need to consider the ongoing costs associated with maintaining the property, such as having funds available for repairs and tenant management. And if the property is untenanted for a while; you’ll need to rely on other assets and sources of income to pay ongoing care costs. You may also need to spend some money on the property before you rent it out to bring it up to a rental standard.

Tax and Centrelink implications

If you rent out the family home, you/your loved one may have to pay tax on the rental income received. However, there are various tax offsets available – including the low income and seniors and pensioners tax offset – that may reduce the amount of tax owed.

Whether you keep or sell the family home, the decision may affect Centrelink entitlements. You or your family may also have to pay Capital Gains Tax on the property when it is eventually sold. Depending on the value of the land there may also be Land Tax implications. The Age Pension is worked out by an income and an assets test. Your rental income will be assessed as part of the income test, and after the first two years the property will be assessed under the assets test as well.

If you sell the home, the sales proceeds will then be considered under the income and assets test depending on where they are invested.

And finally, shop around

To make sure you find an aged care facility that you or your loved one are comfortable in and that will suit your needs, you may like to visit a few different places. Remember, you can apply to as many facilities as you like. The accommodation costs for all aged care facilities are published on myagedcare.gov.au. This website also provides a description of the rooms and services available at the facility. To find out more about aged care options, talk to your financial adviser or visit challenger.com.au/agedcare.

DISCLAIMER: The information in this article is provided by Challenger Life Company Limited ABN 44 072 486 938, AFSL 234670 (Challenger Life), is general only and has been prepared without taking into account any person’s objectives, financial situation or needs. Because of that, each person should, before acting on any such information, consider its appropriateness, having regard to their objectives, financial situation and needs. Neither Challenger Life, nor any of its officers or employees, are a registered tax agent or a registered tax (financial) adviser under the Tax Agent Services Act 2009 (Cth) and none of them is licensed or authorised to provide tax or social security advice. Before acting, we strongly recommend that prospective investors obtain financial product advice, as well as taxation and applicable social security advice, from qualified professional advisers who are able to take into account the investor’s individual circumstances. In preparing this information about taxation, Centrelink rules or benefits and/or Department of Veterans’ Affairs rules or benefits, Challenger relied on publicly available information and sources believed to be reliable, however, no representation or warranty, either express or implied, is given as to its accuracy, completeness or reliability. To the maximum extent permissible under law, neither Challenger Life nor its related entities, nor any of their directors, employees or agents, accept any liability for any loss or damage in connection with the use of or reliance on all or part of, or any omission inadequacy or inaccuracy in, the information in this article.