Care for the aged - Aspire Planning Group

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Care for the aged

We take a closer look at the impact of the Australian government’s proposed reforms to the aged care system and the importance of making financial provision for your latter years.

The fact we’re tending to enjoy longer and more productive lives in retirement is worth celebrating. But the reality is that many of us will need some form of care as we grow older.

More than a million older Australians currently receive some sort of aged care service and that’s likely to rise to 3.5 million by 2050, according to the Federal Minister for Ageing Mark Butler in an ABC interview.[1] He also went on to say that last year for the first time there were more Australians reaching retirement age than reaching working age.

As an increasing number of Australians exit the workforce, the onus is increasingly on individuals to make their own provision for retirement. And that includes their aged care needs.

When many of us think about our retirement, not too much thought is given to the latter stages of retirement, when we are likely to be less active and need more support. But increased longevity may mean longer home care and longer care in a retirement home.

Living longer, living better

Under its recent Living Longer, Living Better proposals (available at, the Australian government is making some major changes to the aged care system, giving Australians more control over how they are cared for in their advancing years. But along with more individual control comes more responsibility for funding our aged care.

The changes will affect both home care and residential care and are likely to apply to those who start receiving care on or after 30 June 2014.

Stay in your own home

When we think about aged care, it often conjures up images of a retirement home. But many of us would prefer to stay in our own homes for as long as we can.

The government is recognising this with its commitment to adding more home care packages.

  • More home care packages – 40,000 new home care packages over the next five years, making a total of 100,000.
  • New means-tested care fee – In addition to a basic fee, the government is introducing a care fee that will be means tested against total income, up to a yearly limit of $10,000.

Make the move

We also need to be aware that there may come a time when more specialised round-the-clock care, which can only be provided in a residential care home, is needed. The government is also making changes to the residential care system.

  • Choice of entry fee payment – choose whether to pay a fully-refundable lump sum or rental-style periodic payment, or a combination of both
  • Cooling off period for accommodation bond – more time to decide how to pay for residential care without having to sell the family home in a hurry
  • Single means test – designed to create a level playing field, taking into account both income and assets up to a maximum payment of $25,000 a year.

Helping hand

The good news is that the family home will continue to be excluded from means testing. And anything a family pays towards home care will go towards the lifetime cap of $60,000 on all aged care fees.

There will also be more financial support for carers and aged care facilities, as well as a national call centre, and a My Aged Care website starting next year that will compare the quality of services in different areas.

For more information about the government’s changes, please see the Living Longer, Living Better proposals at

At the same time, we can help you make sense of the options and make sure you don’t miss out on any entitlements. So, please call us today.

[1] Landers, Kim. (4 May 2012). Experts discuss aged care reforms (ABC). Retrieved from

What you need to know

Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. If you decide to purchase or vary a financial product, your financial planner, our practice, AMP Financial Planning Pty Ltd and other companies within the AMP Group will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.

Some of the information in this article is based on our interpretation of the law or government proposals. It is a summary of the subject matter covered and is not intended to be comprehensive tax or financial advice. No reader should act on the basis of this article without obtaining specific professional advice. Further details are available from your planner or AMP Financial Planning Pty Limited, telephone 1300 157 173.

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