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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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