In the same way our industry is responding to the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the banking Royal Commission), the aged care sector is now taking stock of the revelations from the Royal Commission into Aged Care Quality and Safety (the Aged Care Royal Commission). It’s a highly emotive topic, the mistreatment of the vulnerable and elderly, and it is certainly bound to make people spend more time considering their future options for aged care. Financial planning to ensure the best possible care goes hand in hand with these considerations.
With an ageing population and the Aged Care Royal Commission set to release its final report in November 2020, the sector is in a state of change and the options are becoming more complex. There’s an increasing demand for not only aged care services, but also a flow-on effect to aged care advice. Compliance and regulation will continue to evolve over the coming years making it even more important for you to understand where you stand from an estate planning and tax perspective well before you think you’ll need aged care.
I think the Aged Care Royal Commission will also change the way the industry is structured, much like the banking Royal Commission did to the financial services industry. As a result we’re probably going to see something similar in the aged care sector to what’s happened to the financial planning industry in terms of a shift from mass providers to a number of mid-range providers. This may also change the cost of aged care, increasing it as the expectations and complexity of the infrastructure around the sector grows. While there may be more options for care, you will also need to plan more carefully and structure your finances to ensure you get the best possible care.
Other alternatives to full time residential aged care are also emerging like the use of private carers. While some people may be inclined to care for their loved ones on their own given the revelations of neglect that have emerged, inevitably I think most won’t be able to. You can’t have round-the-clock care unless you’ve got the funds to pay for it, which is expensive.
Over the next few years, much like the finance industry, I believe the aged care sector will constantly evolve. There are so many moving parts in the way that it interacts with Centrelink entitlements, estate planning and cash flow that it’s more important than ever to get advice early. Making the wrong decision could end up being more costly, both financially and emotionally, particularly if you need to marshal all your resources for bonds and fees.
The Aged Care Royal Commission has seen heightened focus on the sector. This scrutiny will continue, around things like whether a home has been sanctioned, how many nurses are on, what the food is like, what the quality of care is like, have there been any instances of elder abuse – all these considerations will bring regulation and with regulation comes increased cost. While this will hopefully see an increased level of care for our elderly, I believe it will also add to the complexity of planning for and choosing aged care. While there are turbulent times ahead for the aged care sector, you can protect yourself and your loved ones by seeking out specialist advice.
Martin Sherwood is an Executive Advisor at Viridian Advisory
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