AGED CARE EXPLAINED

An interview with Leoni Bolt

House lost to pay for Aged Care

Breanna a 79-year-old had been living at home quite independently although her health was deteriorating. Her family would visit during the week to check up, do some cleaning and the grocery shopping. She was receiving a level 4 home package. The family was sensing that she was not coping, and some personal hygiene matters were becoming more frequent and concerning.

After the family discussed it further, they asked the home care staff member what were the options. An ACAT representative was appointed to reassess Breanna and she was medically assessed as now needing full time care. The family rallied around, and they designed a roster whereby Breanna could be looked after on a fulltime basis. This was fine for a couple of months however, as she deteriorated, the demands on their time and respective families became higher and eventually they had to find an aged care home for her.

The family were handed the required Centrelink forms and they were completed on Breanna’s behalf. Centrelink then gave the family some paperwork that they were to handover to the aged care facility they had chosen. They had no idea of what was about to happen.

Breanna was asked to pay $550,000 for the room in aged care, as her assets were more than $172,000. She did not have this sort of money, and had not previously planned for possible aged care entry. Another family meeting and Breana’s home of 45 years was sold to pay for her room. The family were disappointed as they knew that Mum had always wanted to pass on the home to them when she had passed on and this wasn’t going to happen.

A couple who planned for Aged Care Entry

Marj and Ronald, now in their early 80’s and in good health, had been married 47 years. They asked their adult children to attend some meetings with them to listen, support and give their views on some forward planning for aged care. Now that they were getting older and had heard some friends were asked to pay over $500,000 each for a room in aged care after they both ended up there. Marj and Ron had battled all their lives to pay off the their home sometimes at a 17% interest rate. They owned their home, were on the pension and still had some money in super but didn’t have that kind of money. Their original intention was to leave their home to their grown up kids when they pass on, as it was tougher now for young ones to get a start in life, and property prices seemed way out of reach for most now. They felt they were both at least five years away from needing such care as they walked everyday and believed they were in good health.

Sadly, Marj suffered a severe stroke after a fall at home some fourteen months later and was admitted to an aged care facility, as Ron was now unable to fully care for Marj. As they had already implemented one of the options provided to them by EPACES they were now financially in a safe place. The chosen option had utilised some of the Centrelink rules meaning Ron and Marj were not asked to pay for Marj’s room in aged care, they were surprised that their friends had been right as other residents in the same place had paid up to $550,000 for a similar room. Centrelink also increased their pensions as they were separated due to illness.

Pension & Estate wishes affected by Aged Care

Elizabeth was 85, a single pensioner with severe dementia when assessed that she needed full time aged care. The Centrelink assessment was completed, and she was given 6 months to pay for her room, so her daughter Jenny who was the enduring power of attorney for Elizabeth put the house on the market.

Elizabeth’s will stated that when she passes the house would go to Jenny and any residue to charities she had supported over many years.

The home was sold for over $900,000, and a RAD (refundable accommodation deposit) of $490,000 was paid to the facility for Elizabeth’s room. As Elizabeth no longer had a house, part of the sale proceeds, other assets plus deemed income put her over the maximum allowable pension limits, and her pension was subsequently cancelled by Centrelink.

Elizabeth lived a further 18 months in an aged care home and then passed away. Some 14 months later (after probate) the estate was paid the RAD for distribution as per Elizabeth’s will. Jenny had been left the house in the will and this would have assisted her financial position greatly. When the will was read - there was no house- it had been sold to pay for a room in aged care and the balance directed by Elizabeth originally to go to charity. Now Jenny was severely conflicted in her mind- she didn’t want to fight a charity in court. She knew that Mum had intended for the house, or the house value to go to her, and then any balance to charity. She loved the charities Mum supported, however, the money was now gone. She sought specialist legal advice as to whether she could recover the money her Mum had intended for her.