Why Most Aussie Families Are Leaving Aged Care Too Late

It usually starts with a phone call you weren’t expecting. Maybe Mum’s had a fall, or Dad’s health has taken a sudden turn, and the hospital social worker is telling you they simply can’t return home. Suddenly, you’re thrust into a world of assessments, fee structures, and acronyms you’ve never heard of, all while trying to manage the emotional weight of a major life transition.

I’m Sean Sullivan, and I spend my days helping Australian families navigate the financial maze of aged care. Let's be honest: most people treat aged care like a bridge they’ll cross only when they’re forced to. But the reality of the Australian system is that if you wait until you’re standing at the edge of that bridge in a panic, your options are limited and the stress is through the roof.

We need to stop looking at aged care as an "emergency only" topic. It’s a predictable stage of the modern retirement journey, and we need to start treating it with the same level of planning we give to our superannuation.

The Hidden Statistic of Retirement: The Frailty Gap

When most of us think about retirement, we picture the "active" years—travelling the grey nomad trail, time with the grandkids, and finally getting around to those hobbies. But here’s a figure that usually catches people off guard: on average, Australians can expect to live 17% to 25% of their retirement with a level of frailty that threatens their independence.

Think about that for a second. For every four years of retirement, one of those years will likely require some form of supported care. Most financial plans are rock-solid for the first three years but completely ignore the "fourth year." We tend to blind ourselves to this data because nobody wants to imagine themselves losing their independence. But planning for these "frail" years isn't being pessimistic; it’s being prepared for the retirement you’re actually going to have.

Avoiding the Three ‘Gs’ of Decision Making

Making financial choices for a loved one is hard enough. Making them in the middle of a family emergency, when everyone is exhausted and emotional, is a recipe for disaster. When you start the planning process early, you ensure that your choices aren't dictated by the three most common emotional traps.

"If you start planning for aged care support before you or your parents need it, it can significantly reduce the chance of decisions being influenced by the three ‘Gs’: grief, guilt and greed."

We know how Grief and Guilt work—they cloud your judgment and often lead to overspending just to feel like you’re "doing the right thing." But we also have to talk about Greed. It’s a tough word, but in this context, it often shows up as a desire to preserve an inheritance at the cost of the parent's actual comfort or care quality. A professional roadmap takes the heat out of these emotions and keeps the focus where it belongs: on the best care for your folks.

The Danger of "Crisis Mode" Planning

The biggest mistake I see is families leaving the conversation until it’s a "hospital bed" situation. When you are in crisis mode, you aren't "choosing" a facility; you are often just taking whatever bed is available first.

This is the worst possible environment for life-changing decisions. Timely pre-planning allows you to tackle Step 2 of the process: the ACAT (Aged Care Assessment Team) assessment. Doing this while things are stable gives you the luxury of time to move to Step 3—searching for services and visiting different homes to see where your parents would actually feel at home, rather than where they’ve been "placed" by a discharge officer.

Navigating the Financial Maze: RAD vs. DAP

Understanding the costs is where most people feel like they’re hitting a brick wall. In Step 4 of the journey, we break down the three types of fees: accommodation, care, and additional services. What you pay isn't just a flat rate; it depends on a complete review of your assessable assets and income.

One of the most high-stakes decisions comes in Step 7, when you have to decide how to pay for that accommodation. You generally have two main choices:

• RAD (Refundable Accommodation Deposit): A government-guaranteed lump sum payment.

• DAP (Daily Accommodation Payment): A periodic daily fee, similar to interest.

This is where the "Family Home" dilemma kicks in. Do you sell the home to pay the RAD? Do you keep the home and rent it out to cover the DAP? These aren't just math problems; they affect your Centrelink entitlements, your tax position, and the ultimate value of the estate. A professional review is essential here because a wrong move can cost the family tens of thousands of dollars in the long run.

The Conversation is the Most Important Step

Actionable planning starts with a talk. It doesn't have to be a formal "intervention," but if you have parents aged 70+, or you’re approaching that age yourself, it’s time to sit down.

When you start this conversation, keep these points in mind:

• Choose the right setting: Don't bring it up at a busy family Christmas or a rushed Sunday lunch.

• Listen actively: Don’t interrupt. Listen to their fears about losing independence or leaving the family home.

• Focus on dignity: Reiterate that this isn't about "putting someone away"—it's about ensuring safety, social connection, and quality of life.

A Trusted Roadmap

The rules governing aged care in Australia change constantly. Strategies that worked for your neighbours five years ago might be a disaster for you today. Having a specialist guide you through the full seven steps—from that initial planning meeting and searching for services to Step 6 (Estate Planning) and finally signing the Resident Agreement—provides peace of mind.

It ensures you aren’t missing out on government subsidies and that your investments are aligned with your new reality. So, I’ll leave you with one question: Are you planning for the retirement you want, or are you prepared for the retirement you’ll actually have?

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Contact Sean Sullivan Phone: 0413892531 Website: careadviser.com.au

Sean Sullivan is an Authorised Representative #238668 of Vivid Financial Planning Pty Ltd, which holds an Australian Financial Services License #478937.

The information on this Website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate for your needs and, where appropriate, seek professional advice from a financial adviser.