Post on 04-Jul-2020
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UNDERSTANDINGAGED CARE FOR A
LOVED ONE
This presentation is for general information only and must not be considered as personal financial advice
UniSuper Management Pty Ltd (ABN 91 006 961 799) is licensed to provide
financial advice (Australian Financial Services License No. 235 907) and is the
administrator of UniSuper (ABN 91 385 943 850). UniSuper Management Pty
Ltd (USM) provides advice under the name UniSuper Advice.
UniSuper general advice representatives are employees of USM. They are
remunerated by way of a base salary and potential bonuses (based on the
quality, service and revenue targets). See the relevant Financial Services
Guide for more details.
UniSuper Ltd (ABN 54 006 027 121, AFSL 492 806) is the trustee of UniSuper.
For more information about your UniSuper benefits, refer to the relevant
Product Disclosure Statements available on our website.
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Agenda
Retirement villages
Home care
Residential aged care
Case study
UniSuper Services
Granny flat arrangements
Overview of living and care options
Family home - Nil care support
Granny flat arrangements
Retirement Villages
Family home – home care support
Aged Care Residential Facilities(hostels or nursing homes)
Supported Residential Services /
Facilities
LIVING AND CARE OPTIONS
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GRANNY FLAT ARRANGEMENTS» Does not need to be a separate flat/unit
» Usually informal family arrangements where clienttransfers money, assets or their home to a familymember and in exchange, receives either:
• The right to accommodation for life, or
• A life interest in private accommodation
» Client has created a “right” and does not have legal ownership of the property.
Centrelink Implications
» Can transfer assets up to certain aged based limits without gifting implications (reasonableness test)
» Amount will determine whether you are still counted as a homeowner or a non-homeowner
GRANNY FLAT ARRANGEMENTSPractical and emotional considerations
Care to be provided
Holidays
Contribution to outgoings/expenses
What happens if care needs can no longer be met
Impact on aged care fees if move to aged care within 5 years
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RETIREMENT VILLAGESAccommodation for over 55’s regulated under State or Territory legislation
Things to look for:
• Options: Independent living units vs serviced apartments
• Care Services
• Check the rules or contract to see what you are getting
• Like minded residents
• Established or financially sound provider
• Arrangements for moving to onsite aged care
• Costs – they are expensive
RETIREMENT VILLAGES COSTSCosts vary
Commonly:
• Entry Fee (purchase price)
• Monthly service fee
On exit:
• Deferred management fee
• Refurbishment costs
• Sales and legal fees
Lifestyle choice not an investment
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THE HOME CARE LANDSCAPE
* Previously referred to as Home and Community Care (HACC) Programme
As at 30 June 2018:
• Around 783,043 people accessing CHSP services and 91,847 accessing HCPs^
• Not-for profit organisations provided most CHSP services (77%) and HCP across all levels (approx. 76%)
The greater the person’s financial security the more control and choice they may have available
What are the options for home care?
^Source: 2017/18 Report on the Operation of the Aged Care Act 1997, Department of Health
HOME CARE
What are the options for home care?
What kind of assistance is available?
How do I access these services?
What will it cost me?
How do I work out which is best for me?
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HOME CAREHome care services are generally divided into two categories:
• Commonwealth Home Support Programs (CHSP)
– Basic Care
• Home care packages
– Basic to High Level Care
Commonwealth Home Support Packages (CHSP)» Starting point for aged care
» Provides single issue needs
» Suits people with minimal care needs
» Can dip in & out as needed
» Services are subsidised by the government BUT clients
may pay a fee based on services they want to receive
» The fee is a contribution towards the costs of providing the
services (such as staff and equipment) and can vary
» Government provides funding directly to the provider to
cover the rest of the cost
» Clients who can’t afford the fee may still be able to access
services and should discuss their situation with the provider
Accessed through MyAgedCare or local council
Regional Assessment Service (RAS) arranges assessment in persons home
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Home Care Packages (HCP)Home Care Packages require an ACAT/ACAS Assessment
Four packages available:
• Level 1 – Basic care packageapprox 2 hrs services p/wk
• Level 2 – Low level care packageapprox 3-4 hrs services p/wk
• Level 3 – Intermediate care packageapprox 7-9 hrs services p/wk
• Level 4 – High level care packageapprox 10-14 hrs services p/wk
All Packages provided on a consumer directed care (CDC) approach
This encourages you to identify specific care goals and gives control over the services received
Basic fee (paid by client) + subsidy (paid by Govt)
May also pay an Income Tested Fee (ITF) which reduces the Government’s share of the cost, up to a daily cap which differs depending on whether you are a part pensioner or a self funded retiree
Basic daily fee + package level subsidy
Home Care Package Basic daily feeMax daily
Government subsidy Budget per annum*
Level 1 $9.44 $24.07 $12,231.15
Level 2 $9.99 $42.35 $19,104.10
Level 3 $10.27 $92.16 $37,386.95
Level 4 $10.54 $139.70 $54,837.60
* Includes Government subsidy and client contribution
It is important to remember that any care coordination and case management fees are paid to the provider from this budget
Home Care Packages Continued» Home care provider will co-ordinate care and
services to arrange a package of care services that
meets needs of the client
» Plan is monitored on an ongoing basis by care
provider with formal reassessment (at least every 12
months)
Types of services available include:
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WHAT ARE THE OPTIONS FOR HOME CARE?Subsidised home care package
Need to be assessed as eligible.
Assessment is free and conducted first over the phone and then in your home
Waiting times for these services can be considerable
Lower care packages (Level 1 and 2) can be more expensive than private services if not a full pensioner
MyAgedCare website or 1800 200 422
WHAT ARE THE OPTIONS FOR HOME CARE?Department of Veteran Affairs
DVA services for AVA Gold or White Card holders
Call VHC Assessment Agency on 1300 550 450
Department of Veteran Affairs on 1800 555 254
May ask for a contribution of $5 - $10 per week depending on services
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TAKING CARE OF THE CARER
If the carer does not stay rested and healthy will not be able to fulfil their role
Prepare for longer breaks
Take regular short breaks
Take time to maintain friendships, contact with family and active in your own interests
AGED CARE RESIDENTIAL FACILITYResidential accommodation and care subsidised and regulated by the Commonwealth Government
Care provided according to needs, usually aging in place
ACAT/ACAS assessment required (myagedcare.gov.au)
Fees and charges are regulated
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AGED CARE RESIDENTIAL FACILITY COSTSAccommodation Payment (bond or RAD). Government
guaranteed and returned when resident departs;
Care and service fees:
• Basic daily fee 85% full single age pension
• Means tested care fee $0 to $252.20 per day. Yearly
and lifetime cap
• Additional fees
• Safety net for those who cannot afford a bond
COSTS OF RESIDENTIAL AGED CARE The fees payable in residential aged care are regulated by government and may depend on:
Accommodation payment
Basic daily care fee
Means-tested care fee
Additional services fees
Published rates
RAD or DAP
Concessions if low means
Based on income & assets
Annual & lifetime caps
All residents
$51.21 per day (indexed March &
Sept)*
Fees for extra services
May allow opt-in or out
Set by service provider
• The aged care service you select • Your level of assessable assets and income• The range of fees are shown in the diagram below
*85% of full single Age Pension
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AGED CARE RESIDENTIAL FACILITY
Things to look for:
• Locations
• Can I afford it (or can they afford me)??
• Happy staff and residents
• Food and activities
• ‘Fit’ and feel
CASE STUDYMary, widowed, age 82
• Mary has been ACAT (Aged Care Assessment Team)
assessed as requiring permanent residential care
• Mary has appointed her children Greg and Lucy, as her
Power of Attorney
• Greg and Lucy have consulted Signpost Aged Care
services and have signed a Residential contract to place
Mary in a single room with ensuite at Cherry Tree Grove
in Kingston which has a Refundable Accommodation
Deposit (RAD) of $400,000
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23PRESENTATION NAME
CASE STUDY: MARY’S ASSETS
Assets Owner Current value Annual income
Home Mary $400,000
Home contents (Centrelink value) Mary $10,000
Total lifestyle assets $410,000
Cash savings Mary $47,000 $1,175
UniSuper Flexi Pension Mary $600,000 $42,000
Age Pension Mary $0
Total Investment Assets $1,057,000 $43,175
WHAT SHOULD MARY DO?What is the better option? It depends on……………..
Estate Planning issues
Expected capital growth on home
Costs to make home ‘rentable’ and maintain
Emotional/family considerations
Potential value and use of former home
Ability to generate cash flow
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CASE STUDY What should Mary do?
Greg and Lucy (as Attorney’s for Mary) would like to review
options to pay for Mary’s aged care accommodation and
understand the financial impact of each option
They have indicated that they do not wish to sell
Mary’s home
They would like to minimise ongoing care fees
where possible
They would like to determine whether Mary has sufficient
cash flow to meet her ongoing costs of care and living
expenses
26PRESENTATION NAME
CASE STUDYMary’s starting cash flow (Day one)
Description Annual Income
Income:
UniSuper Flexi Pension (Tax free) $42,000
Interest from bank savings (@ 2.5%) $1,175
Age Pension $0
Total: $43,175
Expenses:
Basic daily care fee ($51.21 per day) $18,692
Means tested care fee ($29.57 per day) $10,793
Extra Service fee ($12 per day) $4,380
Daily accommodation payment or DAP ($60.71per day) $22,160
Personal living costs $5,000
Home expenses (to maintain main home) $5,000
Total $66,025
Shortfall ($22,850)
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MARY’S AGED CARE FUNDING OPTIONS
Fund the Refundable Accommodation Deposit (RAD) via a daily payment (DAP)
Redeem $400,000 from Mary’s Flexi Pension to pay the RAD in full
Redeem $200,000 from Mary’s Flexi Pension to pay 50% of the RAD and pay the balance via a DAP
28PRESENTATION NAME
MARY’S RAD FUNDING OPTIONS
Assets Option 1 Option 2 Option 3
Home $400,000 $400,000 $400,000
Lifestyle assets $10,000 $10,000 $10,000
Flexi Pension $600,000 $200,000 $400,000
RAD paid as lump sum $0 *$400,000 *$200,000
Cash $47,000 $47,000 $47,000
Total assets – starting position $1,057,000 $1,057,000 $1,057,000
Estimated assets after 5 year (present value)
$764,000 $859,000 $801,000
*RAD deducted from Mary’s Flexi Pension
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29PRESENTATION NAME
MARY’S CASH FLOW FOR THE OPTIONSOption 1 – Pay full DAP Option 2 – Pay full RAD Option 3 – Pay 50% RAD
Flexi Pension $64,850 $19,997 $44,801
Interest income $1,175 $1,175 $1,175
Age Pension $0 $23,156 $8,969
Total Income – Year 1 $66,025 $44,328 $54,945
Expenses – Year 1
Personal expenses & contingencies $5,000 $5,000 $5,000
Daily Accommodation payment (DAP) $22,160 $0 $11,080
Basic Care fee ($51.21 per day) $18,692 $18,692 $18,692
Means tested care fee $10,793 $11,256 $10,793
Extra Service fee $4,380 $4,380 $4,380
Property expenses $5,000 $5,000 $5,000
Total Expenses Year 1 $66,025 $44,328 $54,945
Net cash flow Year 1 $0 $0 $0
MARY’S CASH FLOW FOR THE THREE OPTIONS
Redeem $400,000 from Mary’s UniSuper Flexi Pension and pay 100%
of the Refundable Accommodation Deposit (RAD)
Retain the balance of Mary’s Flexi Pension ($200,000) and draw
sufficient income from her Flexi Pension (approx. $20,000 in the first
year) to meet her total annual accommodation and living expenses
Recommended option:
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UNISUPER ADVICE BENEFITS FOR MARY
By removing funds from Mary’s UniSuper Flexi Pension to pay the
RAD, Mary will reduce potential death benefits tax of 17% that her
children may pay upon receiving her super death benefits
Mary’s long term net asset position may be slightly higher by paying the full RAD rather than incurring the ongoing interest cost of the DAP
The full RAD (less any discharge fee deducted by the facility) would be payable to Mary’s estate and distributed according to her Will should she pass whilst in the Aged Care facility
The ‘return’ on paying the RAD is known whereas the investment
return of the Flexi Pension is subject to market volatility
Mary will increase Age Pension as funds used to pay RAD are Centrelink exempt
AVOID RUSHED DECISIONS
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33PRESENTATION NAME
TALK TO YOUR FAMILY
You never know what the future holds.
It is never too early to plan ahead. It is easier to do this planning when you are well.
Talking about the type of care you might prefer now will help others to understand your wishes and help them to make decisions for you if they ever need to.
Talking about dying might be hard, but it won’t kill you. You might even find that your family is dying to talk too.
How do you want to be cared for at the end of your life?
Source: http://dyingtotalk.org.au/discussion-starter/
AGED CARE ADVICE
• UniSuper now offers Aged Care Advice to members and other family members
• We provide personal advice on residential care and general advice on home care
• Accredited aged care specialists in each state.
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AGED CARE ADVICE
1. Review entire situation
5. End-to-end service
6. Peace of mind
2. How to pay?Lump sum/daily rate? Sell/rent/retain home
3. Generate reliable cash flowto cover daily needs
4. Optimise financial position
Maximise Age PensionMinimise aged care fees
Relationships with reputable placement providers
for yourself and lovedones
AWARDS
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ROYAL COMMISSION
UniSuper advisers are absolutely fee-for-service and
don’t receive commissions (and that’s always
been the case!)
Our governance model ensures advisers act only in
members’ best interests
Our advisers are committed to the highest
educational, professional and ethical standards
Providing greater retirement outcomes
CONTACT US
1800 823 842
advice@unisuper.com.au
Complimentary initial appointment to determine your needsAdvice fee can be deducted from your accumulation or Flexi Pension account (if related to superannuation)
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