How to Avoid the 4 Key Mistakes in Aged Care Planning 

Whether you’re planning for yourself, your partner, a parent, or another loved one, aged care can feel like a foreign world, but you don’t have to navigate it alone. When it comes to aged care planning, many people don’t know where to start and worry about the cost of such advice. However, not getting the right aged care guidance can ultimately be far more costly. At Morrows, we understand that aged care is a complex and emotionally challenging process, filled with unfamiliar terms and regulations—from RADs, DAPs, and MPIRs to MTAs and ACATs.  But more about that here. 

Our team of aged care planning specialists are here to guide you through these decisions, helping you understand your options, avoid common pitfalls, and gain confidence in your plan for securing the necessary care.  

We frequently see four critical mistakes—and how the right advice can help prevent them.

1: Selling the Family Home Without Understanding the Consequences 

Selling the family home might seem like an easy solution to fund aged care, but it can have unintended financial and personal impacts. Selling could affect eligibility for government benefits, alter family finances, and disrupt plans for inheritance. We can help you weigh the pros and cons, ensuring you understand the full scope of this decision. 

2: Avoiding Lump-Sum Payments (Refundable Accommodation Deposit – RAD) 

Many hesitate to pay a lump-sum RAD, fearing they’ll be left without liquidity. However, in some cases, paying a RAD can reduce ongoing costs and offer financial security. Our Morrows advisers can assess whether this option is in your or your loved one’s best interest, explaining how a RAD might enhance financial stability while preserving flexibility. 

3: Underestimating Cashflow Needs 

Aged care costs often require a higher cashflow than anticipated. Without sufficient planning, it’s easy to run short on funds needed for daily expenses and care. Our advisors can help you forecast cashflow needs over time- so you or your loved one is prepared to manage these costs without financial stress. 

4: Providing Incorrect Information to Services Australia, Leading to Higher Fees 

Small errors in reporting financial information to Services Australia can result in unnecessary and costly fees. Our team can ensure that financial information is accurate, so individuals do not overpay for essential care. 

Additional Key Mistakes to Avoid Without the Right Guidance 

Beyond these primary mistakes, several additional pitfalls can arise when aged care planning is managed without expert advice: 

• Not Understanding Pension Impacts: Keeping the family home without realising how it will affect age pension eligibility after two years can lead to a loss of benefits.  

• Incorrect Asset Structuring: Structuring finances to qualify as a low-means resident can seem attractive and advantageous, but it may limit facility options with certain aged care providers.  

• Assuming Home Exemptions Are Permanent: An eligible carer living in the family home may allow it to remain exempt, but this can change if the carer loses income support or faces other financial challenges.  

• Family Contributions Without Proper Planning: Sometimes, a family member might use personal funds to pay the RAD on behalf of a parent. However, this can lead to increased fees and potential estate disputes later.  

Why Morrows? How we can help.

At Morrows, we follow a comprehensive approach to aged care planning and advice, assessing your financial position at the outset and forecasting changes over time. With our guidance, you’ll gain peace of mind and be prepared for future costs and adjustments. Let our team of aged care specialists help you avoid these pitfalls and navigate aged care decisions with confidence. Contact us to discuss your aged care needs and help plan for a secure and comfortable future.  

IMPORTANT INFORMATION: The information is general only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness of your personal investment objectives, financial situation or individual needs. We recommend you speak to your financial adviser, registered tax agent or legal adviser before making any decisions based on this information.  

Download Our FREE Aged Care Planning Guide!

To understand more about the aged care process, the fees and key considerations, complete the form below to access our Aged Care Planning Guide.

If you need further assistance, please reach out, our Morrows Advisors are more than happy to help you and your loved ones.