 |
 |
||
|
Home care While many older Australians prefer to stay in their own home for as long as possible, they may need extra help as they become less mobile or face health issues. That’s where home care comes in. Home care packages are designed for people who can manage some of their daily needs, but who need support to manage the others. They’re a popular option among older Aussies, with around 22% of over 65s accessing some form of support or care at home1. To work out whether you need basic, low-level, intermediate or high-level care, you'll need to be assessed by an Aged Care Assessment Team (ACAT). Your home care package will then entitle you to a range of services, in return for a basic daily fee. Depending on your needs, these services might include:
If you’re eligible for a home care package, the cost of your services will be partially subsidised by the federal government (current subsidies range from $8,785.55 - $50,990.50 per year, depending on the level of care you have been assessed as needing). But even with a subsidy, you'll still need to manage part of the cost yourself. The basic daily fee is currently around $10 per day, although you might need to contribute more if you’re: |
|
In these cases, your income-tested fee could be between $15.24 and $30.49 per day, although annual and lifetime caps apply2. You should also be aware that once an ACAT approves your home care package, your services won’t begin overnight. Recent data indicates that you could be waiting anywhere between 7 and 34 months from the date of your assessment until you start receiving home care services.3 Residential care If you feel that you’re unable to care for yourself at home, you might consider moving into residential aged care. Even if you’re not at that stage yet, it’s worth planning ahead and taking the time to find an aged care facility you’ll be comfortable in later. As well as providing accommodation, aged care facilities usually offer meals, medical and nursing services, and even social activities. There are all kinds of options available, from communities for semi-independent living to facilities with 24-hour nursing care. When you’re exploring your options, you should consider looking for a facility that offers:
|
 |
|
|
||
|
|
Before making a decision, you might want to visit a few places to get an idea of the standards of care and comfort they offer. It can also be helpful to ask someone to come along with you to get a second opinion, like a family member or friend – or a carer if you’re receiving home care. How much does it cost? The accommodation fee you’ll be charged will depend on the aged care facility itself, and factors like the services they offer, their location and the demand for accommodation. To learn more about the potential costs involved, visit the federal government’s MyAgedCare website. In most cases, you can choose to pay your fee:
|
|
If you can’t afford the full fee yourself, the government will provide means-tested financial assistance. However, a waiting period may apply if an ACAT approves you for a government-funded or subsidised residential placement. In 2019, the median wait time was 152 days.3 Talk to your adviser Your financial adviser can support you through many aspects of the aged care process – from filling out Centrelink paperwork to choosing the best way to pay for your accommodation. Because your adviser understands your finances, they can give you the right guidance to make your aged care journey far less daunting.
|
|
WOMEN, WEALTH AND WIDOWHOOD Losing a partner can have a devastating emotional impact. The last thing you’d want is for your financial security to suffer as well.
|
Sunday, 8 March marks International Women’s Day, when people all over the world celebrate the vital contributions women have made to society. But even today, women are still fighting for equality in many aspects of life. Financial security is one of them.
On average, women in Australia earn 14% less than men4 They’re also more likely to take time out of the workforce to care for children or elderly parents, which reduces their earning potential even further.
What’s more, women live longer: the current average life expectancy for Australian women is 84.9 years, compared to 80.7 years for men5. And because women tend to earn less during their working years, they have less super to retire on.
While having a long life expectancy is great, it also means that married or partnered women are more likely to face widowhood than their male counterparts. Although it’s
|
|
not something anyone likes to think about, it’s important to consider how you’d cope financially – both during your working life and in retirement – if you had to go it alone. Fortunately, there are steps you can take now to financially prepare yourself in case you outlive your partner. Or, if you’re already widowed, there are ways to make your finances stretch as far as possible. If you want to be prepared... 1 Create an estate plan First of all, make sure you and your partner both have up-to-date wills. If you’re business owners, set up a formal succession plan that outlines what you want to happen to the business if either of you passes away. You should also know how to access each other’s bank accounts, super and insurance. So make sure you leave written instructions somewhere safe where you and your partner can both find them. Another thing to be aware of is that your super doesn’t automatically form part of your estate. This means your super fund can decide who gets your retirement savings after you die, unless you set up a binding death benefit nomination specifying who the money should go to. Talk to your financial adviser if you need to set up or change a binding death benefit nomination for you or your partner. 2 Check your life insurance Another way to protect your finances is to make sure you and your partner both have adequate life cover. This insurance |
AUTUMN 2020 |
|
|
| Back to top | ||
|
|
||
|
||
|
|
||
|
provides a lump sum payment if either of you die, which can be especially helpful if you have debts to pay off. It can also ease the pressure of keeping up with your ongoing expenses when you’re on a single income. You can take out life insurance either through your super fund or outside super. Getting insured through your super means your premiums are paid directly from your super account, so you don’t have to cover the costs from your bank balance. But this means you could end up with less money to retire on, so ask your adviser which option is best for you. 3 Use smart money strategies If you’re used to having two incomes, or your partner is the primary earner, becoming widowed can make you financially vulnerable. That’s why it’s so important to get your finances into good shape now. For starters, make sure you clearly understand all of your household earnings and expenses. If you have unsecured debts like credit cards or personal loans, make it a priority to clear them. Once that’s done, consider making additional mortgage repayments or putting a bit extra into your super. Even small amounts can make a big difference over the long term. If you’re already widowed... 1 Know your entitlements The federal government offers different types of financial assistance, depending on your specific circumstances. However, from March 2020, some important changes will be made to the following assistance schemes:
2 Stretch your money further If you’re recently widowed and worried about money, there are things you can do to give yourself peace of mind. As a starting point, draw up a household budget and go through all your expenses to see if you can make any savings without sacrificing your lifestyle.
If you own your own home, downsizing might be an answer. By selling your property and buying something smaller, you could end up with a tidy sum that you can invest or live on. You
|
|
might also find that life in a smaller home reduces your bills and maintenance costs. And if you’re retired, you may also want to explore financial products like annuities, which can provide a guaranteed income stream throughout your retirement. Another option is a reverse mortgage, which allows you to borrow money against the equity in your home. Get the right advice Your financial adviser is there to help you, especially in times of change and uncertainty. They can help you structure and manage your finances, and access the right government support and financial products so you can make the most of your money – and the next phase of your life.
4. Workplace Gender Equality Agency, Australia’s gender pay gap statistics, August 2019.
INSURANCE IN SUPER: The federal government has recently introduced two new pieces of legislation: Protecting Your Super (PYS), which took effect on 1 July 2019, and Putting Members’ Interests First (PMIF), effective from 1 April 2020. These laws aim to help Australians save more for retirement by keeping their administration fees and insurance premiums in check. While this is good news, it’s important to understand the impact these new laws could have on any life insurance you have through your super – and whether you need to do anything. |
AUTUMN 2020 |
|
|
| Back to top | ||
|
|
||
|
||
|
|
||
|
Do you have more than one super account? If you’ve had different employers during your working life, there’s a chance you have super in multiple accounts. The new rules affect accounts that haven’t received any contributions or rollovers in 16 consecutive months or more. If your super isn’t yet in the pension phase and one of your accounts becomes ‘inactive’, your super fund may have to close the account. They’ll then transfer the money to the Australian Tax Office, who will move it into one of your active accounts. In this case, any insurance attached to your inactive account will be cancelled. So it might be worth looking carefully at your super arrangements if you have multiple accounts – especially if you’ve been holding onto any inactive accounts specifically for the insurance. If you’d like to keep your inactive account open so you can retain your cover, simply contact your fund to let them know or find out more. What’s changing for younger workers? The new rules aim to reduce insurance costs for younger super fund members. So if you’re under 25 and in the workforce (or you have any family members who are), it’s important to understand what’s changing. Under the new rules, new super fund members who are under 25 and members (of any age) who have low super balances will no longer automatically receive life insurance. They can still get this cover if they’d like it – they just need to let their fund know. There are, however, some exceptions to this rule. For example, a worker who is under 25 but in an occupation that’s classified as dangerous may6 still receive automatic cover. What kinds of cover could you be losing? Before the new rules were introduced, most super funds automatically provided some level of life insurance cover to all their members. This may include:
|
|
These types of cover can be extremely valuable, particularly if you have children to support, or perhaps a family history of medical issues. What’s more, getting insurance through your super can be a cost-effective way to stay covered, especially if you’re on a tight budget. This is because your premiums are paid directly from your super balance, so you don’t need to cover the costs from your pay packet. On the other hand, paying your insurance premiums from your super account means that you might end up with a smaller nest egg by the time you retire. You might also find that the types and levels of cover available through your super fund are too limited and don’t have enough flexibility for your needs. So if your insurance is likely to be affected by the new super laws, think carefully about whether you’d like to keep your existing cover or find an alternative. Your adviser can help Everyone has different financial circumstances and needs, so there’s no one-size-fits-all situation when it comes to your insurance cover. That’s why it’s so important to work with your financial adviser to find the right insurance plan to suit you. 6. This depends on further conditions including whether the fund trustee has notified APRA in writing that the dangerous occupation exception will apply and the election is in force. |
IMPORTANT INFORMATION This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Financial Wisdom advisers are authorised representatives of Financial Wisdom. Information in this document is based on current regulatory requirements and laws, as at 4 February 2020, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Financial Wisdom, its related entities, agents and employees for any loss arising from reliance on this document. This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. Taxation considerations are general and based on present taxation laws, rulings and their interpretation and may be subject to change. Financial Wisdom is registered with the Tax Practitioners Board as a Registered Tax (Financial) Adviser. However your authorised representative may not be a Registered Tax Agent. Consequently, tax considerations are general in nature and do not include an assessment of your overall tax position. You should seek tax advice from a Registered Tax Agent. Should you wish to opt out of receiving direct marketing material from your adviser, please notify your adviser by email, phone or in writing. Commonwealth Bank has announced that it will cease providing licensee services and commence the assisted closure of Financial Wisdom by June 2020. 26489/0220
|
||
|
||
|
||