How to have 'that' talk about aged care with your Mum or Dad

I often refer to this time of year as "aged care season". It's a time when families have come together, maybe for the first time since last Christmas, and notice that Mum or Dad (or both) need care. Quickly the conversation over lunch turns into a discussion about "what are we going to do to help Mum?"

So, if you are faced with navigating aged care for a loved one this festive season, here are my top tips for getting it right.

Starting the conversation about aged care can be the hardest part. Maintaining good communication and having a "with you" rather than "to you" attitude can make it easier for everyone.

Sometimes older people feel like a conversation about aged care is a slippery slope to a nursing home. It's important to know that there is a smorgasbord of options and the majority of people receive care outside an aged-care home. Having conversations and doing your research early will mean you have more choices about where you want to live and how you wish to access care.

There are a range of care programs, from those designed to provide short term reablement to longer-term care services that can be provided in your home, through short stays or a permanent move into an aged-care home.

The first step is to have your care needs assessed, which starts with a call to MyAgedCare.

To access most government-funded aged-care services such as a Home Care Package, a respite stay or a permanent move to an aged care home you will need to have an Aged Care Assessment Team assessment (often just referred to as an ACAT) .

If you have low care needs and qualify for Commonwealth Home Support Program (CHSP) then you will have an assessment through the Regional Assessment Service (RAS).

In either case, these assessments are free and easy, but you can be waiting weeks, sometimes months, at busy times.

The great thing about home care is that it can be delivered wherever you call home, which may be the family home, an apartment, a granny flat or a home in a retirement village or land lease community.

While many people think of home care as a weekly care service you can access more than just your regular care. Home care can also provide you with equipment and aids, home modifications, respite services, home and garden maintenance and social activities.

A short stay in an aged-care home, known as respite, can give carers a much-needed break. It is also a great way to "try before you buy".

A stay of two or three weeks is normally long enough to get a good idea of the activities, the other residents, the food and most importantly the care.

Respite is also very affordable as there is no accommodation charge or means tested fees you only pay the basic daily fee, currently $61 per day plus any extra services you receive like wine with meals, hairdressing and Foxtel.

A move into a granny flat, retirement community or aged care home normally involves selling your current home. If you receive the Age Pension make sure you understand the impact on your pension and other entitlements such as rent assistance and concession cards.

For many people their current home is worth more than their new home. This financial downsize can cause a reduction (or loss) of pension. It is often due to the assets test which reduces your pension by $7800 a year for each $100,000 over the threshold and can have a terrible effect on your cash flow.

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Aged care is means tested but that doesn't mean that it is always affordable. If you are going to receive a Home Care Package you can be asked to pay a basic daily fee of up to $13 per day. If your income exceeds the threshold ($32,331 a year for singles or $25,054 a year for a member of couple) then you can also be charged an income tested care fee at 50 cents per dollar above the threshold. Full pensioners don't pay an income tested care fee, part pensioners don't pay more than $6544 a year and self-funded retirees have their income tested care capped at $13,087 a year.

In an aged-care home the means test includes both your assets and your income. There are a couple of exceptions, your home is exempt from the assessment if a protected person such as your spouse, or in some cases a carer or close relative live there. If your home is not exempt it is only included up to a capped value of $197,735. While any amount of lump sum refundable accommodation deposit you pay for your accommodation is exempt for your pension, it is included in your aged care assets. Just like in home care, everyone can pay the basic daily fee, in an aged-care home that's $61 per day. The means tested care fee is capped at $32,719 a year, and there is a lifetime cap that applies across both home care and residential aged care of $78,525.

Crunching all of the numbers can be complicated, so seek advice from an adviser that specialises in this area to ensure you understand all your options, the strategies you can use to make it more affordable and to avoid nasty surprises down the track.

A specialist in the financial planning aspects of retirement living and aged care for almost 20 years, Rachel Lane is author of the best-selling book Aged Care, Who Cares? and Downsizing Made Simple with fellow finance expert Noel Whittaker.

The new edition of Downsizing Made Simple is now available at downsizingmadesimple.com.au where you can also find a range of useful exercises, checklists and calculators to help you on your downsizing journey.