Deciding on aged care for yourself or a loved one is rarely just a financial decision. It’s deeply personal, often emotional and filled with questions about what’s sustainable, what’s fair and what will provide a good quality of life in the years ahead.

Whether you are planning ahead or responding to a sudden health event, the right advice can make a meaningful difference to outcomes, peace of mind and long-term security.

This is where working with a financial adviser on the Gold Coast like RFS Advice, who specialises in aged care financial planning, can make a meaningful difference.

Understanding the financial side of aged care

Understanding the financial side of aged care begins with a clear-eyed assessment of how your existing assets are treated by the government. Many Australians are surprised to learn that the “value” of their assets for aged care purposes is calculated differently than it is for a standard mortgage or even the age pension.

Aged care costs are also highly individual. They depend on your assets, income, family situation, health needs and the type of care required, whether that’s in-home support or residential care. Experienced aged care financial advisers help you model different scenarios so decisions are made with clarity rather than guesswork.

Your existing assets

Before any aged care decision is made, it’s critical to understand how your current assets are assessed. This includes:

• Your family home (and whether it’s exempt)
• Investment properties
• Superannuation balances
• Shares, managed funds and cash
• Trusts and family structures

Some assets are assessable for Centrelink and aged care purposes, while others may be treated differently depending on ownership structure, control and use. A structured approach to aged care financial planning ensures assets are positioned appropriately while remaining compliant with regulations.

In particular, your home is often your most valuable asset, and deciding what to do with it is one of the biggest decisions in aged care planning.

When you move into residential aged care, your former home can be treated differently under the age pension and aged care means tests, depending on your circumstances.

For aged care purposes, if your home is occupied by a partner or another protected person, it is generally not counted as an asset in the aged care means assessment.

If no spouse or protected person lives there, a capped amount of $210,555.20 (as at 20 September 2025), or the net market value of the property if lower, is included in your aged care means assessment.

For age pension purposes, different rules apply: if your spouse remains in your home, the home is exempt from the assets test. If your former home is not occupied by a spouse then it would not be included in your assets, for the age pension assets test, for a two year period after you move into a care situation; however, after 2 years, the home is generally assessed at market value and you are assumed to be a non-homeowner.

How the property is assessed can affect both your ongoing pension eligibility and the rate of your fortnightly payments.

As a result, decisions about the family home can have a material impact on both care costs and ongoing cash flow. Common considerations include:

• Whether to keep, rent, or sell the property
• How rental income affects your care fees
• Whether selling creates better cashflow for aged care costs
• Estate planning implications for your family

Cashflow

Aged care is not just about total wealth. Ongoing cash flow is often the determining factor in what options remain sustainable.

Professional budgeting and cash flow advice typically considers:

• Regular income from superannuation, annuities or investments
• Pension eligibility and timing
• Ongoing personal expenses
• Unexpected medical or care-related costs

This is where integrated financial planning becomes particularly valuable, especially for retirees who need income certainty alongside flexibility.

Centrelink

Your interaction with Centrelink (or the Department of Veterans’ Affairs) becomes more complex once aged care assessments are undertaken. A certified financial adviser can help you understand how the means-dependent fees for support at home or residential care are calculated and how they contribute to the cost of your care. Because this fee is assessed using both income and assets, even relatively small financial decisions – such as selling shares or gifting money to grandchildren – can have an impact on your ongoing care costs and Centrelink entitlements.

Funding aged care

Once you understand your financial position, the next step is determining how to fund your care.

Choosing your payment method

For residential aged care, you’ll typically face an accommodation payment. You can choose to pay this as:

• Refundable Accommodation Deposit (RAD): This is a lump sum payment. It is government-guaranteed at government-approved residences and is generally refundable to your estate (minus any retention amounts and agreed deductions) upon death.

• Daily Accommodation Payment (DAP): This is a periodic daily payment, similar to interest on an unpaid loan. It is not refundable and is indexed with the consumer price index (CPI) periodically.

• A combination of both

Choosing between RAD and DAP affects cash flow, investment income, Centrelink outcomes and the eventual value of your estate. For example, paying a full RAD preserves your cashflow but ties up capital. Paying a DAP maintains liquidity but creates an ongoing expense that must be funded from your income or other assets.

Financial advisers on the Gold Coast like RFS Advice can help you weigh these options against your broader financial goals and family circumstances.

Income streams in aged care

Aged care costs need to be funded from a mix of income and assets. Common sources include:

• Age Pension
• Superannuation drawdowns
• Account-based pensions or annuities
• Investment income
• Rental income from property

How these income streams are structured and accessed can have a direct impact on aged care fees and government entitlements once assessments are underway.

Getting this right requires a clear understanding of Australia’s aged care and income assessment rules, as well as how different income sources are treated in practice when funding ongoing care.

Understanding the complexities of aged care fees

The cost of a new facility is more than just the “room price”. There are several layers of fees that can catch families off guard:

• Accommodation costs: Either RAD, DAP or a combination of both as discussed above.
• Basic daily fee: Covers living costs like meals, cleaning and laundry (set at 85% of the single age pension as at 1 November 2025, with a daily rate of $65.55 presently).
• Means-tested care fee or non-clinical care contribution: An additional contribution toward care costs. Whether this is charged as a means-tested care fee or a non-clinical care contribution depends on individual circumstances, including whether an approval for a home care package was held as at 12 September 2024.
• Hotelling contribution: In some cases, residents may also be asked to pay a hotelling contribution, which is means-tested and relates to non-care services such as accommodation-related costs rather than care itself.

What you pay depends on your financial assessment, and small changes in how assets are structured can have significant impacts. Professional financial planning can help you understand these fees and explore strategies to manage them effectively.

Restructuring assets to maximise government support

Government pensions and subsidies can reduce your aged care costs considerably, but whether you are eligible and for how much depends on how your assets are assessed. Wealth protection strategies might include:

• Strategic use of exempt assets
• Restructuring investment portfolios
• Timing asset sales to minimise means-tested fees

These strategies must comply with Centrelink rules and be implemented well in advance. This is complex territory where specialist aged care financial advice is invaluable.

What happens on death?

When someone dies in aged care, several financial matters need to be addressed:

• RADs are refunded to the estate
• Final fees are calculated
• Superannuation death benefits are distributed in accordance with the member’s arrangements
• Estate plans are executed

Planning for this in advance – through proper estate planning, binding death benefit nominations and clear family financial planning – can reduce stress for your loved ones during an already difficult time.

The true value of aged care financial advice

Beyond the numbers, working with a trusted financial adviser on the Gold Coast during aged care transitions provides three essential types of support:

Emotional support

These decisions are rarely just financial. They involve letting go of independence, leaving a family home and confronting mortality. Having an objective professional guide you through the process can ease anxiety and provide reassurance that you’re making sound decisions.

Financial logic

An expert can cut through complexity, model different scenarios and explain the long-term implications of each choice. This helps clarify what is sustainable and where risks may arise.

Understanding and clarity

Perhaps most importantly, a good adviser helps you truly understand your options – not just what the fees are, but what they mean for your lifestyle, your legacy and your peace of mind.

When to start looking for advice

Ideally, your retirement planning should include aged care considerations well before they’re needed. However, it’s never too early or too late to seek help.
You should consult a certified financial adviser if you:

• Are approaching your 80s and want to plan ahead
• Have noticed declining health or mobility
• Are considering downsizing or moving to retirement living
• Have received an Aged Care Assessment Team (ACAT) approval
• Feel overwhelmed by aged care fees and options
• Want to protect wealth for your family while ensuring quality care
• Need to integrate aged care costs with your existing retirement savings strategies

Finding the right support

At RFS Advice, we specialise in helping families navigate these transitions with confidence. Our financial planning on the Gold Coast includes comprehensive aged care support.

Whether you need home care financial advice, residential care planning or comprehensive wealth management for families, we’re here to help you make informed decisions that honour your wishes and protect your financial future.

If you’d like support navigating aged care decisions, RFS Advice can help you understand your options and put a clear plan in place that reflects your circumstances, priorities and wishes.

Frequently asked questions

Is aged care advice only for retirees? What’s the difference between a RAD and a DAP? Can superannuation be used to pay for aged care?

General advice warning:

The information and any advice provided in this article has been prepared without taking into account your objectives, financial situation or needs. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things.