Ever see a meme like this and start thinking about what you want your ‘twilight years’ to look like?
It’s common to be optimistic about what will happen when you’re old and can no longer live 100% independently. The general idea is that you want good enough health care to be able to enjoy your day-to-day life. You want decent food, a community of people around you (including friends), and comfortable environs. When it gets to the stage that you need high-level care, you want people looking after you who care about you the way your own family do. In other words, professionals who care not just about your physical wellbeing but your emotional wellbeing and fulfilment.
According to many surveys, Australians want plenty of choice when it comes to aged care. Not only do they want to be supported to stay in their own homes for longer, but if they do end up in residential care, they want to be able to tailor services to meet their individual needs and preferences1. This includes things like leisure, sport and exercise opportunities, social activities, different meal plans, travel and mobility help, and more.
Who pays for all this?
Of course, all that great stuff comes at a fair cost. And you can bet that the government won’t be footing the whole bill.
Chances are, the ‘basic’ standards that everyone has a right to aren’t what you’d want for yourself. If you take a look at the current standards, you get a bit of a clue2. For example, under the Quality of Care Principles, care recipients have to be kept safe and healthy. But the food doesn’t have to be interesting or tasty – it just has to be ‘of adequate variety, quality and quantity’. The Accreditation Standards just say residents have to get ‘adequate nourishment and hydration’.
The Australian Aged Care Quality Agency and the Aged Care Complaints Commissioner are some of the government bodies in charge of making sure that homes are up to scratch. And they’re doing a great job so far. But they can only make sure that providers give basic legal level of service in order to receive funding.
What if I want more (or better) than the basics?
Residential care facilities are allowed to charge different rates for nicer rooms/suites, within a certain limit, and providing this doesn’t restrict the number of basic rooms they offer. They’re also allowed to charge extra for ‘optional’ services3. These include things like hairdressing, massage and beauty services, nicer toiletries, personal escorts to outside appointments, pay TV, pet visits, personal shopping, alcoholic beverages, and more. The kinds of things they’re allowed to offer, and how they’re allowed to offer them, are set out in the Extra Service Principles 2014 4.
In the future, the market for aged care services will expand to include the kinds of things described in the aged care surveys mentioned above. People will want to be able to pick and choose different parts of their care, beyond the basic standard. The government’s new quality framework and voluntary quality indicators will make it even easier for people to make informed choices, which may help encourage competition between providers. But chances are, if you want extra services, you’ll have to make sure you have the money to pay for them.
How can you make sure you can pay for all those little extras?
Paying for aged care probably isn’t something you want to have to think about too much, especially while you’re still young, working, and completely independent. But just like you may be starting to plan for your retirement, it’s important to set yourself up for the lifestyle you want should you need to enter aged care. Even if you’re decades away from retirement, you might want to think about the level of aged care service you want your parents to receive, especially if you’ll be involved in choosing and paying for their care. Understanding the kind of costs that might be involved will make you more prepared in future.
1http://www.pc.gov.au/__data/assets/pdf_file/0004/83380/aged-care-trends.pdf Accessed 29 August 2018
2https://www.legislation.gov.au/Details/F2016C00451 Accessed 29 August 2018
4https://www.legislation.gov.au/Details/F2014L00809 Accessed 29 August 2018
This article is general information only. Readers should consider getting financial advice before making financial decisions.
The trustee of Tasplan Super (ABN 14 602 032 302) is Tasplan Pty Ltd (ABN 13 009 563 062). AFSL 235391.