Ruth's Funeral Bond
Ruth has recently been assessed as needing residential aged care. As her daughter has been living in the home as her carer for more than five years they house will be an exempt asset for aged care purposes. Ruth’s asset and income assessment results in her qualifying as a low means resident.
| Assets | ||
|---|---|---|
| House | $500,000 | Exempt |
| Cash | $130,000 | |
| Contents | $5,000 | |
| Total | $635,000 |
| Income | |||
|---|---|---|---|
| Pension Entitlement | $27,664 | p.a. | per fortnight |
| Investments at 4% | $5,200 | p.a. | on $130,000 |
| Total | $32,864 |
| Ongoing Costs | ||||
|---|---|---|---|---|
| Basic daily fee | $21,528 | p.a. | $58.98 | per day |
| Daily accommodation contribution | $13,687 | p.a. | $37.50 | per day |
| Living expenses | $3,650 | p.a. | $10.00 | per day |
| Total | $38,865 | |||
| Ruth's cash flow | ($6,001) |
If Ruth invests $14,000 (1 July 2022) in a funeral bond and gifts $10,000 to her daughter, she will reduce her assets from $135,000 to $111,000.
Now her assessable assets would be only $54,000 (20 March 2023). Her DAC would be recalculated as $25.96 ( 20 March 2023) per day or a RAC of $127,024 (20 March 2023), saving $4,212 per year in the first year that Ruth pays by DAC.
Lane, R., & Whittaker, N. (2016). Aged Care Who Cares? In R. L. Whittaker, Aged Care Who Cares? (p. 185). Noel Whittaker Holdings Pty. Ltd.
Steve Jenkosky trading as Golden Age Advisory is an Authorised Representative of Synchron AFS License No. 243313.
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