Financial Planning for Residential Aged Care

Before you sign anything

Residential aged care involves some of the most complex financial decisions a family will ever make.

Getting advice from a specialist — before you sign anything — is strongly recommended. This is not general financial planning. It's a specialist area with its own rules, means tests, and long-term implications.

Why aged care finances are different

Most financial decisions affect one area of your finances. Aged care decisions interact with multiple areas simultaneously — the age pension, your assets, the family home, and your estate — all at once.

The wrong choice on an accommodation payment can have consequences that last years. Decisions that seem equivalent on the surface — like paying a lump sum versus a daily fee — can have very different impacts on pension entitlements, asset thresholds, and what's left for the estate.

This is not general financial planning. It is a specialist area, and the advisers who work in it have specific training for exactly these scenarios.

Key decisions to get right

Refundable accommodation deposit vs daily payment

Paying a lump sum (the RAD) means a large asset leaves the estate but is fully refundable when the resident leaves. Paying a daily fee (the DAP) preserves the lump sum but reduces income. Each has different implications for means testing, pension entitlements, and estate planning — and the right choice depends on the individual situation.

What to do with the family home

Whether to sell, rent, or retain the family home affects means testing, pension calculations, and what options are available for accommodation payments. Timing and structure matter.

Impact on the age pension

Assets and income are assessed differently once someone enters residential aged care. Changes to asset holdings, including accommodation payment choices, can alter pension entitlements significantly.

Gifting rules and means testing

There are strict rules about transferring assets before entering care. Gifts above the allowed thresholds are counted as assets for means testing purposes for up to five years — even if the money is gone.

What a specialist can help with

An adviser with aged care accreditation can model different scenarios specific to your family's situation. That includes:

Model different accommodation payment scenarios and show the long-term financial impact of each

Assess the impact of different choices on pension entitlements

Advise on the family home — whether to sell, rent, or retain it, and when

Help you understand the estate implications of each path

Look for an adviser who is specifically accredited in aged care financial advice — not just a general financial planner.

Questions to ask a financial adviser

If you're meeting with a financial adviser about residential aged care, these four questions will quickly tell you whether they have the right specialisation:

“Are you accredited in aged care financial advice?”

“Can you model the refundable accommodation deposit vs daily payment options for our situation?”

“What are the pension implications of selling the family home?”

“Are there any gifting or asset transfer risks we should know about?”

WithSally's role

We help you find the right facility and understand what you're signing up for. Financial planning advice is outside our scope — we are a referral and guidance service, not a financial adviser.

What we can do is make sure you go into every conversation with the right questions, and point you toward specialists who work specifically in aged care. We'd rather you slow down and get the advice right than rush into a decision that's hard to undo.

How WithSally helps

Ready to find the right residential aged care facility?

Tell us your situation — we'll shortlist facilities that fit and call back within one business day. Free for families.

Get started free →