November 1, 2014

Vol 4 Ed 10

Volume 4 Edition 10 Newsletter

Online at Permalink:…s-newsletter-2/ ‎

FINANCIAL CARE SERVICES Independent aged care, lifestyle and financial advice for seniors

Volume 4 Edition 10– 31 October 2014


Independent professional financial advice

Independent financial advice is advice about the financial aspects of your specific situation from a professional who is not going to benefit from your response.
Professional financial advisers consider your particular situation and advise you on the financial implications of your options. An independent adviser assists you to define realistic financial goals and generate a strategy for working towards your financial goals.
Professional financial advisers charge fees for their advice; the fees are related to the work required to advise you about your situation.

Financial Care Services is an independent financial advisory practice wholly owned by Christine Hopper. Financial Care Services charges fees based on the consultation time and written reports that you require. Financial Care Services holds AFSL number and does not have links to any other businesses.

Independent retirement financial advice

Independent retirement financial advice involves looking ahead to when your earned income no longer covers your regular expenses. Your retirement strategy could include accumulating assets during your prime working life and then drawing down on your accumulated wealth after you leave full time work. Thus an essential part of your retirement strategy is accumulating assets during your prime working years.

Your assets would include home ownership, compulsory Superannuation Guarantee savings and your discretionary savings. The amount of your regular discretionary savings and the assets that you choose to invest them in are the subject of your personal financial plan. Disciplined implementation of your financial plan is critical to accumulating the wealth that you hope to spend in retirement.

Christine at Financial Care Services could assist you to define realistic financial goals for a comfortable retirement and then develop your financial strategy. Christine at Financial Care Services also engages with clients approaching retirement to plan their retirement finances. Call Christine on 03 9808 0338 to book an appointment to discuss your long term planning for when you no longer earn an income from work.

Retirement financed by Centrelink income support benefits

Remember the full Age Pension allows homeowners a ‘frugal lifestyle’ only. Pensioners in private rental accommodation struggle to cover their most basic living expenses when the Centrelink Pension is their only income.
The full rate of Age Pension increased in September 2014 to $854.30 per fortnight including all Supplements for a Single Person. Pensioner Couples receive a maximum of $644.00 each per fortnight including all Supplements.

Financial Care Services offers short consultations for $99 to Illustrate how much Disability Support Pension or Age Pension you could receive if you had to ‘retire’ from work now.

If you think that you might be eligible for a part Pension you can call Christine on 03 9808 0338 to arrange a Short Consultation, 45 minutes in person or by telephone and/or email to discuss your potential Age Pension position. Please ask for a special ‘short consultation’ when you book your appointment.

If you would be content with a frugal lifestyle as a long term tenant, then Centrelink benefits might be sufficient.
For a satisfying retirement, living modestly in your own home a disciplined financial strategy is essential. Your retirement strategy involves saving now to finance a secure home and the resources for some travel later. Contact Christine at Financial Care Services to start on that financial strategy to build assets as your financial plan for a retirement.

Beware of poverty in retirement if you cannot live on your current salary how would you cope with only the Age Pension.
If you say that you have no spare money to invest then you might really need a financial plan for living both now and into retirement.  If your salary does not even cover your most basic regular expenditure then maybe you need financial counselling for budgeting and saving.

Charitable groups run courses where you can learn personal financial management to budget, save and spend responsibly. The CAP course helps you actually write your own budget for your circumstances.

Debt can be devastating
If you are already overwhelmed by debt that you cannot service then you might need debt management fast. The CAP team assist by negotiating repayment terms for their clients who are seriously in debt. The CAP debt help service is free.

Independent aged care financial advice

An independent professional aged care financial adviser shows you both the costs of your preferred aged care placement and your projected income under various scenarios.
A professional adviser then helps you to check that your choice is affordable in your situation.
If selling the former home to financial aged care accommodation is right for your family then an independent professional adviser would develop a financial plan for investing any surplus cash. Your financial plan would include appropriate banking and financial products for your situation.
Remember that Centrelink could reduce your Age Pension if you have additional financial assets after selling the former home. Read more about Independent aged care financial advice.

Age Care fee indexation

The Commonwealth sets the levels of residential and home aged care fees for aged care services eligible for Commonwealth subsidy. The Commonwealth allows for regular reviews and aged care fee indexation increases. The Aged care fee indexation increase also applies to the annual and lifetime caps on means tested care fees.

Basic daily aged care fee indexation increase
All residents of Commonwealth regulated aged care facilities pay the Basic daily fee. The Basic daily aged care fee is set at 85% of the Single rate of Age Pension excluding Pension Supplements. The indexation increase to the Age Pension effective 20 September 2014, resulted in the Basic daily aged care fee increasing to $47.15 per person per day.

Means tested aged care fee indexation increase
The means tested aged care fee consists of an income component and an asset component. The income component is similar to half of the assessed income over the income amount for a full Age Pension, the “Income Free Area”. Thus as the rate of Age Pension increases the maximum income of a full Age Pensioner increases and the “Income Free Area” also increases.

The formula for the asset component of the means tested aged care fee was also adjusted to allow for an aged care fee indexation increase to the changeover points in the formula. The aged care fee indexation increase applied to the asset component of the means tested fee is slightly different from that applied to the Age Pension and Income Free Area for the Income component of the means tested fee.

The impact of the aged care fee indexation increase is to slightly reduce the means tested amount for aged care residents who are not Pensioners. But the combined impact of Basic daily aged care fee indexation increase and the indexation of the means tested amount thresholds could be to increase the overall fees payable for residential aged care.

Aged care fee indexation increase of Annual and Lifetime caps
The caps on the amount of means tested care fees that an aged care recipient could be asked to pay were also increased effective 20 September 2014. An aged care fee indexation increase applied to the caps on the annual and lifetime amounts of means tested care fees.
The ‘means tested care fee’ excluding the Basic daily fee, is now capped at $25,349.21 for the care year. Your care year starts on the first day that you received ‘home care’ or entered permanent residential care after June 2014.
The lifetime cap on ‘means tested care fees’ increased to $60,838.12 on 20 September 2014.

Aged care fee indexation increase reviews of individual means tested fee amounts
Your individual means tested amount of aged care fee will be recalculated following the aged care fee indexation increase.
Non-Pensioner aged care recipients could have their means tested amount reduced slightly following indexation adjustment. But if your aged care cost was less than your maximum means tested aged care fee amount then your actual means tested fee would not change on account of the indexation of the means test calculation changeover points.

Review of individual means tested aged care fee amounts
The amount of the means tested fee payable could change whenever the resident’s financial situation changes. The Attorney or Administrator for an aged care recipient is responsible for updating Centrelink about any changes in their financial position. You only have fourteen days to inform Centrelink or DVA about the sale of the former home and the payment of a Refundable Accommodation Deposit.

Read more about the aged care fee indexation increase

Seek independent specialist aged care financial advice before you negotiate aged care accommodation. Resident Agreements cannot be re-negotiated later when you realise the full extent of the costs.
A consultation with an independent professional before placing a loved one into permanent care could clarify the costs and check that the place is affordable before permanent entry is confirmed.

Call Financial Care Services on 9808 0338 to book a consultation before you finalize an aged care placement. Consultations can usually be arranged at short notice.


Financial Care Services

Christine Hopper

Financial Care Services Pty Ltd
Independent aged care, lifestyle and financial advice for seniors in Melbourne, Victoria, Australia
Australian Financial Services Licence Number
299570 (check this at
Authorised Representative Number
252529 (check this at

Telephone – call +61 3 9808 0338
Email – contact
Address – mail or meet at 172 Warrigal Road, Camberwell Victoria 3124
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Disclaimer: The information contained in this newsletter is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations.

© 2014 Financial Care Services Pty Ltd. All rights reserved.