The “Sandwich” Generation

Australia has an aging population. There are any number of reasons for this but the one that we are concerned with here, is that we are living longer and have produced a new generation – the “sandwich” generation. Baby boomers that are sandwiched between the commitment of rearing their offspring and seeing their aging parents through to end of life.

Just when they think their time and money is their own, they have to face the reality of aging parents. So instead of travel, sport etc its “babysitting” a parent with increasing fragility and instead of the Winnebago or golf clubs, its wheel chairs, Zimmer frames and mobility scooters.

The answer of course is an aged care facility. These range from independent living to full dementia care facilities, but they all have one thing in common – fees and charges. The starting point is calculation of a means tested amount. This amount is calculated by the Department of Inhuman Services (or the Department of Veteran Affairs) and will influence both the accommodation cost and care fee paid by the resident.

• Accommodation cost:
  • A low means resident will pay a basic daily accommodation fee, minimum nil and maximum currently $53.39 per day depending on their assets and income and the facility occupied.
  • An accommodation payment resident will pay the price set by the aged care facility, this can be paid by a refundable accommodation deposit (RAD) or a daily accommodation payment (DAP) or a combination of both. The RAD is refundable when an individual leaves the facility whilst the DAP is not. The DAP is the daily equivalent of a maximum permissible interest rate (MPIR) (currently 6.15%) applied to the unpaid portion of the RAD. The DAP can be either paid (usually monthly) or abated from the RAD.
• Care Fees:
  • Every resident will pay a basic daily care fee (currently $47.86 per day) plus a means tested care fee, minimum nil and maximum currently $25529 per year, again dependent on the means tested amounted.

So the challenge is navigating a path through a new vocabulary of acronyms, understanding the calculations and dealing with one of our least popular Federal Government Departments. It would be a brave person who would undertake this without assistance – HQB is here to help! Contact our office to arrange an appointment.