Including aged care in your advice proposition

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An ageing population has increased demand for aged care services. The baby boomer generation has, for example, already entered an age where these services become more relevant. Currently 1.3 million aged care services are accessed every year.¹

With this increase in demand looking set to continue, the need for the guidance financial advisers can provide their clients and their loved ones is paramount. Challenger Chief Executive, Distribution, Product and Marketing Angela Murphy notes ‘The time when Mum or Dad need aged care, whether in residential aged care or their own home, is highly stressful for many families. Good financial advice makes a difference. Clients often seek advice late in the process, at the point where an elderly relative is entering aged care, so there’s a role for advisers to play in helping clients plan ahead to reduce the urgency of the situation and achieve better outcomes.’

If you are considering providing aged care advice as part of your holistic advice proposition, there are tools and resources that  we have developed to support you. These have been categorised into the following six areas. 

Six areas of support for the provision of aged aged care

1. Understanding what aged care clients look like

As at 30 June 2017, there were 499,000 Australians aged 85 and over. In ten years’ time there are projected to be 672,000 aged over 85, an increase of 35%². This projected growth in the ageing population suggests a substantial increase to the number of current consumers of aged care services.

Understanding the composition of the aged care sector, such as those currently receiving aged care, is the first step when considering the provision of aged care advice.

Our article on the current aged care landscape details the total numbers and demographics of those currently receiving aged care services.

2. Understanding how you can provide or introduce aged care advice to your clients and their loved ones

With the growth of the ageing population, aged care advice is needed today more than ever. The complexity surrounding aged care means it can sometimes be overwhelming and confusing for you and your clients. 

Our short video shows how you can help your aged care clients and how to illustrate various aged care scenarios.  

3. Understanding home care

Aged care services often start with providing help around the home. Government subsidised services can be accessed through the Commonwealth Home Support Programme (CHSP), or the Home Care Packages Program. 

There is a process to follow when providing home care advice to see that your client is appropriately assessed and approved, finds a home care provider, and organises 
their finances to suit their circumstances.

Our aged care guide details the steps of this process and provides an analysis of ongoing home care costs.

4. Understanding residential aged care

People generally want to stay in their family home for as long as they can and home care packages can help them do this. However, a person’s health may decline, leading to a greater need for care, making permanent residential aged care the most common reason for leaving a home care package service.

Our article on managing this transition, looks at how you can help your clients during this phase.  

Challenger’s aged care guide provides a detail analysis of the sometimes complex residential aged care fees.  

5. Understanding the strategic considerations

Many clients entering residential aged care will be required to address a number of key considerations – what to do with the family home, how to pay the accommodation payment and whether they have enough money to afford ongoing costs.

Challenger’s Aged Care Calculator (requires log in) can help you to understand a client’s aged care costs, Age Pension entitlements, and cash flow position. It also lets you project estate values under three different strategies and model different care scenarios such as, whether to keep or sell the family home. 

6. Understanding the aged care investment solutions

Finally, its valuable to understand the products available to your clients to assist with funding the costs of aged care. 

Challenger's CarePlus product helps clients fund aged care costs by providing regular payments for the life of the investor as well as providing the peace of mind that 100% of the amount invested (less the amount of stamp duty initially paid by Challenger if a South Australian resident) will be paid on death to either a nominated beneficiary or to the estate of the investor.

Find out more about CarePlus.

For more information please contact your Challenger BDM or visit challenger.com.au/careplus. 

¹ and ² Department of Health’s 2016-2017 Report on the Operation of the Aged Care Act 1997 which can be downloaded at the following link - https://www.gen-agedcaredata.gov.au/Resources/Reports-and-publications/2017/November/2016–17-Report-on-the-Operation-of-the-Aged-Care-A

This information is provided by Challenger Life Company Limited ABN 44 072 486 938, AFSL 234670 for licensed financial advisers. It is not intended to be financial product advice or legal advice and should not be relied upon as such. Examples are illustrative only and should not be relied on by individuals when making investment decisions.