Residential care usually means long-term care in a rest home or hospital-level care facility. Before a person can access government funded long-term residential care, they must have a needs assessment. This assessment considers whether the person can be safely supported at home or whether long-term residential care is needed, and what level of care is appropriate.
This is different from moving into a retirement village. A retirement village is usually a lifestyle decision made while a person is still reasonably independent. Many retirement villages operate under an Occupation Right Agreement (“ORA”). An ORA gives a person the right to occupy a unit, but it is not the same as owning a freehold home. The agreement will usually deal with ongoing fees, deferred management fees, repayment terms, transfer rights and the services available.
Because ORAs are significant legal documents, the Retirement Villages Act 2003 requires an intending resident to receive independent legal advice before signing. The lawyer witnessing the signature must certify that the general effect and implications of the agreement have been explained.
Residential care also raises estate planning questions. A person may need someone to deal with their property, bank accounts, care arrangements and government forms. If they have lost capacity and there are no enduring powers of attorney in place, the family may need to apply to the Family Court for authority to act and make decisions. That can be stressful, costly and time-consuming.
Residential care can also affect the family home. The home may be sold, retained, rented, occupied by a spouse or partner, or used as security for a Residential Care Loan. The right option will depend on the person’s financial position, family circumstances and care needs.
Families should also consider whether the person’s Will is up to date, how their home and other assets are owned, whether any assets are held in a trust, and whether gifts or other asset transfers have been made in the past. These matters may become relevant if the person later applies for a Residential Care Subsidy, as eligibility is subject to a financial means assessment that considers the person’s assets and income.
The key point is that residential care planning and estate planning often overlap. Good planning does not necessarily mean complex structures. It means understanding what the person owns, how it is owned, who can make decisions if capacity is lost, and how care costs may be paid.
Before moving into a retirement village or residential care, families should consider:
- Whether enduring powers of attorney are in place
- Whether the person’s Will is current
- How the family home is owned
- Whether any trust arrangements need to be reviewed
- Whether a spouse or partner will remain at home
- Whether the person may need a Residential Care Subsidy or Residential Care Loan
- The terms of any ORA or admission agreement.
Planning early can help families make informed decisions before there is pressure or urgency.
This article provides general information only and is not legal advice. Families should obtain advice specific to their circumstances.
