Category: Marketing Library

Wanting to retain and/or build your Aged Care Advice offering? This suite of marketing materials will allow you to stand out from the crowd with booklets, newsletters, presentations and Q&A handouts.

ACG Adviser QA Children lending to pay the RAD

Q: Can my children lend me the money to pay the RAD? A: The simple answer is yes, but it will impact your cost of care and may cause estate planning issues. Children often lend parents money for the Refundable Accommodation Deposit (RAD) this may be because the parents have insufficient funds, there is an aversion to borrowing or because the Daily Accommodation Payment will cause pressure on the parents cash flow. While it is not an uncommon practice you should be aware of the impacts this loan will have on the cost of care. The RAD is included in the assessable assets for calculating the Means Tested Care Fee. There is no consideration given in the assessment to some (or all) of the money being a loan. The total value of the RAD will be included in the aged care assets test and the MTCF will increase as a result of the loan. Loaning money to pay a RAD can create estate planning issues as the RAD is generally refunded to the aged care resident or their estate. You should seek legal advice about documenting any loan agreement. Alternatively, children meeting the cashflow shortfall, paying a Daily Accommodation Payment

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ACG Adviser Newsletter – New way to sell a slice of your home March 2020.docx

A new home-equity release product launched this week by Australian Securities Exchange listed “fractional investing” platform DomaCom promises to help you unlock the value of your property.  Equity release normally works on either a credit basis – the provider lends you money and charges interest that compounds each month – or on a real estate security basis, where the provider buys a portion of your house. However, the new product – called the DomaCom Fund – is an Australian Securities and Investments Commission-registered managed investment scheme.  Essentially, it turns your home equity into shares and connects you with people who want to buy some.  People over the age of 60 can “sell the back bedroom” – that is, a fraction of their home. The seller nominates the price and whether they wish to receive a lump-sum or monthly payment. On the other side of the transaction is the investor. They receive monthly income of 3 per cent and a share of the capital value of the home. Lump sum or monthly? Maintaining the property and covering ongoing costs, such as insurance and rates, is shared between the seller and the investor.  When the property is sold in full, the seller and

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ACG Adviser QA COUPLES ENTERING CARE

Q: How are assets and income assessed for couples? A: The simple answer is the assets and income of a couple are assessed on a 50/50 basis and the home is exempt while one member is living there. If both members of a couple are entering care timing the move can create very different outcomes. If you are a couple entering Residential Aged Care it’s important to understand how the timing of your move can affect your means assessment.    The general rule of thumb when it comes to assessing income and assets is that each person has a 50% share, regardless of legal ownership. The family home is exempt from assessment while one member is living there.  If you both enter care on the same day you will each have half the value of the home up to the capped amount of $178,839.20 included in your assessable assets.    If you enter care on separate days, the house will be exempt from the first to enter care and half of the house up to the capped amount of $178,839.20 will be assessed for the second.   Depending on the value of the home, other assets and the amount of assessable income, entering care on

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ACG Adviser Newsletter – Changes in pipeline for pooled lifetime income streams March 2020.docx

The new financial year starting July 1 seems to always bring with it changes in aged care rules –some good, some less so.  The most important thing is to understand what the changes are and, if you can, take action to get the best outcomes. Among the developments this year will be the treatment of pooled lifetime income streams, such as annuities. When it comes to financing aged care costs, one financial product in particular has been highly popular.  It’s called CarePlus and it is a combination of an annuity and life insurance policy.  The annuity component pays a monthly income, while the insurance policy guarantees a payout equal to the original investment amount (unless withdrawn early). Let’s look at how this product is assessed and its treatment after July 1.  Those who purchase the product before July 1 will have their assessment grandfathered. Annuity component The annuity pays a set amount of income for life. The amount you receive depends on the amount invested and your life expectancy. Under the current rules, the purchase price is divided by your life expectancy to calculate what is known as the deductible amount. This amount reduces the value of the asset each

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ACG Adviser QA Document FORMER HOME

Q: Should we keep or sell the family home? A: The simple answer is it depends. There are both advantages and disadvantages of keeping the family home. It is important to be aware of the special rules that apply to your former home when you move to aged care. For two years from the date you or your partner move out, the former home is exempt from the pension assets test. If the home is rented the rent will be assessable in calculating your pension under the income test. Where the home is retained beyond the 2 year exemption, the home will be assessed at the market value with the non-homeowner asset test threshold being applied. For aged care assets the former home is assessed up to a capped amount of $178,839.20 and the rent is included in the income assessment. *If you who entered care before 1 January 2017 an indefinite asset test and income test exemption can apply for pension purposes if you are paying a Daily Accommodation Payment or Contribution and renting your former home. Other important factors to consider include; the impact on your estate planning wishes, the cost of bringing the home up to standard

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Category: Marketing Library

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