Navigating the options of aged care
Successfully transitioning between in-home care services, retirement villages and full-care accommodation is all about making timely, well-informed decisions.
From voice-enabled health tools to wellbeing apps, technology advances are making in-home care an increasingly attractive option for retirees as they weigh up staying at home or moving into retirement or nursing facilities
Brad Monk, Senior Financial Adviser, Investment & Aged Care at LifePath Financial Planning, says simple innovations such as the elderly using an iPad to communicate with family members, carers or medical professionals are making a real difference. For example, medicos can use Skype or Facetime to watch patients take their medicine.
“The technology is so easy to use and it means you don’t have to drive to a home to give people a tablet or medicine, which can really cut costs,” says Monk.
Crunching the numbers
According to a 2014 Grant Thornton report for the Property Council of Australia’s Retirement Living Council1, there will be about 382,000 older Australians seeking a place in a retirement village in 2025, more than double the current number.
In light of such findings, the Federal Government has been promoting policies to encourage people to ‘age in place’ and use flexible in-home care services that can be tailored to individual needs.
It is difficult to compare the costs of retirement villages or nursing homes with in-home care because their models differ markedly, but Monk says the consensus is that staying at home is cheaper. Retirement villages can incur hefty body corporate and exit fees, whereas most retirees own their home and simply have to pay the relevant home-care package fees.
“The financial outlay is less because you’re only paying for the care,” notes Monk.
The Federal Government also offers subsidies for in-home care, providing it in two key forms.
The first is the Commonwealth Home Support Programme2, which subsidises costs for daily tasks such as house cleaning and mowing, as well as some entry-level care. The second is the Home Care Packages Program3 that offers four basic levels and provides maximum government subsidies ranging from about $8000 to $50,000 a year4:
Level 1 – $22.35 a day (dementia supplement of $2.24)
Level 2 - $40.65 a day (with a dementia supplement of $4.07)
Level 3 - $89.37 a day (with a dementia supplement of $8.94)
Level 4 – $135.87 a day (with a dementia supplement of $13.59)
Services provided can include everything from nursing care and physiotherapy to bathing and wound management.
To determine entitlements to a Home Care Package, a potential recipient must undergo an Aged Care Assessment Team (ACAT) assessment.
Recipients of a Home Care package may be asked to contribute a basic daily care fee (currently $10.17 per day) and may be asked to pay an income-tested care fee towards the cost of their in-home care. The latter fee will depend on the recipient’s income. They cannot be asked to pay this fee if their yearly income is below $26,327.60 for an individual, or $40,908.40 for a couple living together. Annual and lifetime caps also apply to the income tested fee you can be asked to pay.
Financial advisers can assist people with high-care needs who require services in addition to their home-care package while minimising income tested fees and maximising Age Pension entitlements. Common strategies may involve planning for cashflow requirements, investing in long-term annuities, or investing in insurance bonds held within a discretionary trust5.
“But seek advice from an expert,” Monk says.
Sometimes when we are talking with our clients, we don’t actually look at the bottom line of what the costs will be but rather what the benefits will be overall.
Beware of fee traps
Monk says a common problem retirees and their families make when considering Home Care services is being enticed by providers offering zero administration fees. It’s more important, he says, to assess the provider’s hourly rate.
“So while some of these providers may offer a nil administration fee, the hourly rate they charge for the care is a lot higher,” he says.
Monk advises his clients to get a full rundown of all services and costs before making a decision. It’s also important to select a provider who delivers consistency in the form of the carers or service providers they send out, and the times that those carers visit. Changing routines can be especially troublesome for the elderly.
“We like to talk to the same person, we like to do things at the same time, but if you choose a care provider who gives you [rough] timeframes of between 9am-2pm it can be a bit daunting for the person receiving care.”
While retirement villages and nursing homes can offer around-the-clock care or emergency response, Monk says getting 24-hour care in the home is usually cost prohibitive.
“There are very few Australians that could afford 24-hour care at home,” he says.
As a complement to traditional care services, technology and new treatment options are emerging as a game-changer for in-home care.
In the US, for example, Wellpaper has rolled out a voice-enabled diabetes support platform called Sugarpod6. Consisting of scales and a foot scanner and using communication tools such as SMS, email, mobile apps and voice, it supports diabetes patients with health-management tips and messages from their care professional.
New apps are proving popular, too. The Five.Good.Friends app connects seniors with carers and other skilled people, while the AllowMe! app creates a community of care for very sick people who can quickly communicate the help they need – anything from requesting a meal, to having their lawn cut or getting someone to walk their pets.
In Australia, Medibank is offering in-home rehabilitation for joint-replacement patients7. The program allows patients to have rehab at home after hip or knee surgery rather than in expensive hospitals or medical clinics.
Monk says such innovations make living at home more viable for retirees. “The things they are inventing are mindboggling and they’re going to help us stay at home.”
In any debate about retirement living versus in-home care, Monk says it is important to consider intangible benefits. Do seniors want the security, wellbeing facilities and social connections a retirement facility can provide, or do they prefer the comfort of staying at home and choosing from affordable care services?
“Sometimes when we are talking with our clients, we don’t actually look at the bottom line of what the costs will be but rather what the benefits will be overall,” he says.
Regardless of the final decision, Monk urges the elderly and their families to discuss all options early.
“Families need to talk to their parents and not be afraid of the conversation.”
If you’re considering whether in-home care is right for you or a loved one, you’ll need advice from a professional. Find a qualified financial adviser here.
LifePath Financial Planning is a corporate authorised representative of Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124