Aged care case study

Aged Care Case Study: Beryl

Beryl has just turned 85, she is widowed and owns her home with a value of around $1.3m.

Other financial assets including a super pension (Account Based Pension) worth $300,000 and $50,000 in cash reserves sitting in a standard bank account.

Scenario: Beryl is considering moving into an aged care facility. The room she is interested in has a room price of $750,000.

If Beryl were to move into care as a permanent resident, she would be asked to pay:

For her accommodation: $750,000 Refundable Accommodation Payment or $163.56 per day as a Daily Accommodation Payment or any combination of the two. Note the word ‘refundable’. Any lump sum paid toward the Refundable Accommodation Payment is returned to the resident when they leave (less a small retention amount). What you pay as a Daily Accommodation Payment does not come back to you.

For her ongoing clinical and care costs, per day:

Basic daily care fee $ 66.80

Hotelling contribution $ 22.15

Non-clinical care contribution $ 9.66

Together, this is a total outlay of $95,693 for the first year.

Beryl’s Age Pension entitlement is just short of the maximum single rate plus supplements at $1,100.40 p.f. ($28,610 p.a.) plus she is drawing the minimum 9% (85 years) p.a. from her Account Based Pension (her super pension). So from day 1 of signing the agreement, she would have a cashflow shortfall of $40,000 without even covering costs for regular medications or personal expenses.

So not taking action to get financial advice (that is, choosing to do nothing), would mean that Beryl would likely exhaust all cash reserves as well as her superannuation pension in a few short years, not to mention that if her home is retained and not rented out, she could lose her Centrelink Age Pension entitlements after two years of being in permanent care.

The point is, you cannot afford NOT to get advice when moving to Aged Care. A rash decision can be extremely detrimental to your financial situation. We can help to tailor a cashflow solution to suit you and your individual circumstances. Our aim is to maximise income and minimise fees. What if I were to tell you that we could structure Beryl’s financial affairs to flip that $40,000 cashflow deficit into a $40,000 surplus by Year 6, and retain an Estate Value Best case scenario for Beryl is likely to sell her family home which frees up funds to pay the lump sum accommodation deposit (saving at least 7.96% in interest (the DAP) p.a.) and invest the change to guarantee an additional income source that will see Beryl’s cashflow swing from a $40,000 deficit to a $5,830 deficit in the first year, and a surplus by Year 4 and flipping the $40,000 deficit on its head, yes a $40,000 surplus per annum from Year 6. And an Estate value that stays around the $1.5m mark, a strategy delivered with Clarity, Care and Confidence.

*We have used a number of assumptions in this scenario. All rates and modelling are using the Australian Government Department of Health, Disability and Ageing -Schedule of Fees and Charges for Residential Care dated 20 March 2026.