Mistakes in aged care can be expensive — both financially and emotionally. We’re talking tens of thousands of dollars in extra fees, reduced pensions, and family tension that makes Christmas lunch even more uncomfortable than usual.
The good news? With the right planning, you can avoid the most common (and costly) aged care missteps. Here are three big mistakes I see people make — and how you can sidestep them.
Mistake #1: Failing to plan
The saying “fail to plan, plan to fail” applies to many things — retirement, road trips, and yes, aged care. But let’s be honest, most people would rather talk about anything else. I’ve lost count of how many times I’ve heard, “You can carry me out of my home in a pine box.”
The problem? Planning only starts when there’s a crisis, and suddenly, you’re making high-stakes decisions under pressure. That’s when bad choices happen.
A great way to test-drive an aged care home is respite care. It’s affordable, with no accommodation or means-tested care fees — just a basic daily fee of $61 plus optional extras like hairdressing or a glass of wine (which, let’s be honest, might be essential).
The biggest mistake? Moving into aged care without understanding the costs. Whether you’re classified as a low-means resident (where the government covers some or all fees) or you need to pay the market price depends entirely on your assets on the day you move in. Miss the low-means threshold by a fraction, and you could be paying thousands more than expected.
Mistake #2: Selling the family home too soon
The Refundable Accommodation Deposit (RAD) can be a scary number — often hundreds of thousands of dollars. But here’s the thing: you don’t have to pay it upfront. You can choose to pay a daily amount, a lump sum, or a combination of both.
Selling the family home in a panic to fund the RAD? Big mistake. Big. Huge! (Yes, that’s a Pretty Woman reference, and no, I won’t apologise for it.)
Why? Because your home is exempt from the pension asset test for two years and is capped at $206,039 for aged care assessments. Selling too soon could reduce your pension and increase your aged care costs. A well-thought-out strategy can save you thousands — so before you call the real estate agent, get expert advice.
Mistake #3: ‘Passing around the hat’
Families sometimes chip in to help pay the RAD, thinking it’s an investment. But here’s the catch:
- The RAD is counted as the resident’s asset, which can increase their means-tested care fee.
- When the RAD is refunded, it goes back to the resident or their estate — not the family members who contributed.
Before you start crowdfunding Grandma’s aged care deposit, speak to a specialist. Aged care fees are complicated, but with the right strategy, you can avoid costly mistakes and keep more money in your pocket.
The bottom line? Get advice before you leap.
Aged care is one of the biggest financial decisions you’ll ever make — so don’t wing it. Aged Care Gurus can help you navigate the costs, options, and strategies that best suit you.
Want to understand how aged care fees will impact you? Speak to a Retirement Living and Aged Care Specialist financial adviser today. Find one near you here.
