Mar 23, 2016

Her Money: helping your parents with aged care

Having parents who can no longer live independently can be a difficult turning point.
It can be a really confronting time. 
Dominique Bergel-Grant
Moving homes is stressful at the best of times, let alone when the move involves an aged care facility – and when not everyone agrees that the move is necessary.
Then there are awkward questions about funding aged care and what to do with the family home.
"It can be a really confronting time," says Dominique Bergel-Grant of boutique financial adviser Leapfrog Financial.
It can also be complicated.
Statistically, the experts tell me, most of the responsibility for taking care of elderly parents tends to fall upon the eldest female in the family. Indeed, I  found a reference to a study by Princeton University that found daughters step up twice as often as sons in the provision of elderly care, regardless of job status, childcare duties and other variables.
One of the first pieces of advice that planners offer is to avoid a last-minute panic about finding a suitable aged care place by getting ageing parents to look at the alternatives while they are still agile.
"Not everyone needs aged care. But it is a great idea to have a look around so you know what to expect," says Martin Jones, senior business development manager at ipac Financial Care.
A little research will help to dispel some myths, too. Some aged care places might be run down, but others are like five-star resorts, Jones says.
Keeping lines of communication open and treating your parents like the adults they are is another piece of common advice.
Many elderly people may be able to stay at home by having home care packages.  To obtain one, your parents will need to be assessed by an aged care team. The My Aged Care contact centre, run by the Department of Social Services, can organise an assessment.
Extra home help is often a good option – and the conversation can be framed in a positive tone. Obtaining help can supplement the activities your parents feel they can cope with and allow them to continue living at home.
There are four levels of home care available, and several providers, so it might be worth shopping around for a service best suited to your parents' needs.
Short-term respite care is also available.
When it comes to full-time care, it starts to get more complicated, particularly financially.
Accommodation costs and care fees depend on which residential facility your parents move into, their income, assets and the services they use.
Generally speaking, there are three levels of fees: a daily care fee, an accommodation fee (known as a refundable accommodation deposit or RAD) and a means-tested care fee.
The daily care fee is $47.86 a day.
The RAD can vary between about $200,000 and $2.5 million, with the average being about $300,000-$400,000. As the name suggests, the RAD is refundable, albeit with no interest.
There are choices to be made about  how to fund the cost of the RAD, including selling or renting the family home.
It is true that the RAD can be partly or fully subsidised by the government, leading some families to think that their parents are better off running down their finances.
But Jones cautions against such an attitude.
"If you have money, you will have the choice over the facility and which room you want," he says. Some rooms are shared with shared en suites, Jones says. 
The other point to think about is making sure elderly parents have an enduring power of attorney, a formal document that gives another person the authority to make legally binding decisions on their behalf.
"It is really important to make these appointments before a person becomes incapacitated to make decisions."
Appointing an enduring guardian is also highly recommended. This gives a representative the ability to make health and lifestyle-related decisions.

Mindful of challenges ahead

She fits the demographic – mid-40s, professional with children – but Christa Meek doesn't consider herself part of the "sandwich" contingent. At least not yet.

Meek's two kids, at 11 and 13, are dependent of course but her parents, in their late 60s, are well and enjoying retirement in country Victoria. A former minister of religion and a teacher, they stay with the family in Melbourne every school holidays to help and regularly have the grandchildren to visit. 
But it's becoming a different situation for the other side of the family. Meek's mother-in-law was recently diagnosed with mild cognitive impairment. The 74-year-old former teacher and wife of a sheep farmer has had memory issues for at least a couple of years, says Meek.
She had become less assertive and more forgetful  – enough for her children to suggest a trip to the doctor. It took months for this to happen and the implications of the assessment are still not being discussed openly.
But Meek, an academic in genetics at Monash University, is mindful of the experience of a friend who had the responsibility of caring for her mother after she was diagnosed with Alzheimer's disease.
The friend sought the professional advice of a financial consultant, who specialised in navigating Centrelink requirements for aged care. The friend also engaged a private social worker to find and secure a suitable placement in an aged care facility.
This had been after a "nightmarish" two years when Meek's friend cared for her mother in the marital home while trying to  raise two young children and work part-time.
"She said it was a big mistake and damaging to family relations and her kids' wellbeing," Meek says. "She had to give up her job and was stressed and I'd say traumatised. That's not a good outcome for anyone."
Case study: Natasha Hughes
The information in this article should not be taken as financial advice. Please consider your personal circumstances before making any financial decisions.

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