Retirement living and care options in the community

The Aged Care Royal Commission revealed a significant increase in demand for aged care. It’s a challenge for government as the number of people aged over 85 is predicted to nearly double from 2.0% of the Australian population in 2018 to 3.7% in 2058.   

​As Australia ages, older people are choosing to remain in their home for as long as possible. That’s why around two-thirds of people who access aged care services do so from their home. The government has implemented various policies to assist people to stay in their own homes, including tax concessions and more aged care services in the community. Let’s step through the main community care options for your clients.

1. Downsizing (including moving in with family)

Clients that seek to move into more age-appropriate accommodation have a variety of choices. These can include moving to a smaller or easy-access home (such as a ground floor unit), moving in with family, a co-ownership arrangement with family or a granny flat interest. A granny flat interest is a right to accommodation in a property that the client doesn’t own. It doesn’t necessarily have to be a separate dwelling out the back of someone’s property and can be useful from an estate planning, social security and aged care point of view.

If any of these downsizing arrangements involve the sale of a primary residence, consider a downsizer contribution to superannuation. To be eligible, your client must be over age 55, have owned the residence for at least 10 years prior to disposal and make the contribution within 90 days of receiving the proceeds.

2. Lifestyle villages

Also called land lease communities or manufactured home estates, a person will own the house and pay rent to lease the land. Covered by state-based tenancy laws, lifestyle villages look like and offer similar facilities to retirement villages such as pools, bowling greens and club houses. From a social security perspective, the client is a homeowner and the house is an exempt asset. Centrelink recipients may be eligible for rent assistance towards their land lease fees. Other advantages include no stamp duty, no rates and generally no exit fees. A key benefit is that the resident can sell their home to a new resident on departure at the market price.

3. Retirement villages

A retirement village is a community for people aged over 55 that’s regulated by state-based retirement village legislation. It’s not an aged care facility, although some retirement villages may have aged care facilities attached or nearby. The units range from self-care to independent living through to higher levels of care.

A retirement village can have different fee arrangements to enter,commonly this would be a licence to occupy or a leasehold type of arrangement. Your client would generally pay a lump sum entry contribution, an ongoing levy and an exit fee. Moving to a retirement village is a lifestyle purchase rather than an investment. Historically capital growth from a retirement village unit is generally significantly lower than the capital growth from a freehold type of property such as a strata apartment.

4. Commonwealth Home Support Programme

The Commonwealth Home Support Programme is intended to provide entry level home support services to people aged over 65. The program helps people with daily tasks while at home and in the community. To access the program, a person needs to organise a health-based assessment with the Regional Assessment Service through My Aged Care. The government-subsidised services provided include the well-known ‘Meals on Wheels’, help with basic chores around the house or garden, assistance with shopping and transport to medical appointments.

5. Home care packages

Home care packages are for people who need a higher level of support. To access the program, a health-based assessment is done by the Aged Care Assessment Team (ACAT) through My Aged Care. Once someone’s approved for a package, an amount is allocated to that individual who’ll then need to choose a home care service provider. The service provider will work with the package recipient to come up with a care plan and will manage the recipient’s individualised budget to provide the care and the services needed. The provider is responsible for managing the funds, scheduling, and paying carers to help the person in their home