Aged Care – Making an Informed Decision

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It is estimated that by 2051, more than 25 per cent of the population will be aged over 65 and the number of people over 85 is expected to be more than quadruple to 1.8 million. The likelihood that you will have to place a parent or relative into an aged care facility is remarkably high. You could even be considering it as part of your own retirement.

It can be difficult to plan, both financially and emotionally, for the move into an aged care facility. When trying to choose the best care, many practical issues arise and decisions need to be made.

Seeking financial advice during this time can ensure you and your family are able to make the right decisions. The following key tips and traps should help give you confidence when facing the aged care challenge.


Key tips


  • Determine whether you or your loved one is eligible to enter into an aged care facility and what level of care will be needed (high-level care or low-level care). This is established by an aged care assessment team.
  • Take the time to understand the aged care fees that apply to your chosen aged care facility and whether you can purchase additional extra services.
  • Take into account the impact that entering an aged care facility may have on your or your loved one’s financial situation and age pension entitlements.
  • Read the booklet titled ‘5 steps to entry into residential aged care’ which is available from the Department of Health & Ageing website. This booklet mainly focuses on the non-financial matters and issues that need to be considered (for example what you need to know when choosing a nursing home).
  • Ensure that you have sufficient cash-flow to fund both aged care fees and other related costs (such as the ongoing maintenance of the former family home).
  • Determine how long your money will last and create a plan with your financial adviser to improve this.
  • Revise your estate plans and important legal documents (such as an enduring power of attorney) that have been granted to your immediate family, close relative or friend.
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Key traps

  • Avoid selling the family home before seeking advice. Paying certain aged care fees and renting out the former home could deliver a better outcome. The overall benefits of not selling may include reduced aged care fees and increased age pension entitlements.
  • When retaining and renting the former family home, it is important to consider the income tax impact (as the rental income is assessable for tax purposes), the capital gains implications and whether renovations are required.
  • Avoid taking actions that could result in a loss of age pension and increased aged care costs (for example gifting assets outside Centrelink gifting rules).
  • Remember to consider the impact that entering an aged care facility might have on you or your loved one’s financial estate, to be passed on to the next generation.


Start planning early as part of a retirement planning strategy to give you enough time to effectively plan this next phase of life. Most importantly, it’s essential that you seek advice prior to entering into an aged care facility agreement.

Choosing the right aged care options will depend on a multitude of factors and the decision can be complicated.  Speak to your financial adviser, or feel free to:

send us an email using the form below
send us an email using the form below
send us an email using the form below to ensure you optimise your situation and avoid the key traps.


Disclaimer: The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. If any products are detailed on this website, you should obtain a Product Disclosure Statement relating to the products and consider its contents before making any decisions.

[1] Population Ageing and the Economy, research paper commissioned by the Commonwealth Department of Health and Aged Care, ACT.

[2] Treasury’s Australia 2050: Future Challenges (2010 Integenerational Report)


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