The transition to residential aged care is a significant life event that brings with it a myriad of emotions and decisions, not least of which is what to do with the family home. The thought of selling a home filled with memories can be daunting and is often intertwined with concerns about financing aged care. It’s crucial to understand that when it comes to residential aged care, selling your home is not your only option. Dispelling myths and understanding your choices can alleviate some of the anxiety associated with this transition.

Do You Have to Sell?

Facing the prospect of paying substantial amounts for aged care accommodation can indeed be panic-inducing for many. However, it’s a misconception that selling your home is a prerequisite for moving into care. Just as with any house move, the decision to buy or rent is yours. In the context of aged care, the cost of your room—often quoted as a lump sum—can be translated into a daily rental fee based on a government-specified interest rate. This conversion provides flexibility, allowing you to retain your home if you choose.

Example:

Catherine is quoted $600,000 for her room in a residential care facility. At an interest rate of 8.34% per annum, this equates to a daily fee of $137.10, plus other fees. Catherine now has the option to either pay the $600,000 upfront to “buy” her room or “rent” it at $137.10 per day. She could also opt for a combination of both buying and renting, tailoring her payment strategy to her personal circumstances.

When to Make a Choice?

Deciding whether to sell your home or keep it involves numerous personal factors, but informed advice can significantly ease this burden. Upon being offered a room in an aged care facility, you will be presented with a Resident Agreement. This contract outlines your rights, responsibilities, and the fees involved, including the room price and its equivalent daily fee. Importantly, you are not required to finalise how you wish to pay—whether as a lump sum (RAD), daily rent (DAP), or a combination—until 28 days after moving into the facility. This grace period is designed to give you sufficient time to consult with professionals and make a well-informed decision.

As Accredited Aged Care Professionals™, our role is to assist you through these pivotal decisions, ensuring the path you choose is both financially viable and in the best interests of your family. We aim to safeguard the value of your estate while facilitating an aged care experience that is as stress-free as possible.

Contact us today to explore how we can support you during this transition, helping you to make choices that reflect your needs and those of your family. Our expertise in aged care can provide the clarity and direction you need during this challenging time.