Keith and Nicole were informed that Nicole’s mother Janelle required low level residential aged care. Their immediate need was to find the best aged care residence to look after her, yet without having a significant impact to her financial position and in turn her social security benefits. Janelle has her home worth $1m, which she wishes to retain for the family, an allocated pension of $400,000 and cash reserves of $200,000.
We recommended that Janelle consider renting out her home, negotiate the method of payment for her accommodation bond, and rollover a portion of the remaining allocated pension to an annuity with a term of 10 years and no residual capital value because they are favorably means tested.
As a result, Janelle’s home has been retained for the family, her social security was not adversely impacted, and she could cover the cost of the accommodation bond, whilst her daily fees were kept to a minimum.
Knowing that Nicole mother’s financial situation will not be negatively impacted, Keith and Nicole can focus their attention on the most important consideration of finding an aged care facility that will best look after her.
This is a hypothetical example based on a real client experience. Names and details have been changed.