Aged care and Fee reduction strategies

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  1. What are three fee reduction strategies for aged care?
    • Purchase an investment bond inside a private trust
    • Utilising superannuation and income streams
    • Paying a higher accomodation bond
  2. Who is the investment bond inside a private trust strategy suitable for (2)
    • paying an income tested fee and
    • People with substantial assets
  3. The success of the investment bond strategy is dependant on whether the reduciton in income tested fee and increase in age pension is worth...
    Additional costs and tax paid.
  4. Why does the investment bond strategy work
    Normally investment assets are deemed, trusts are not, instead taxable income is used.

    Investment bonds are internally taxed, therefor and investment bond inside a trust has no taxable income.
  5. Who is best suited to the Superannuation strategy? (3)
    Either under age pension age or spouse under age pension age.

    pay an income tested fee

    Have substantial financial assets.
  6. What is the advantage of putting assets into superannation
    If person is under age pension age then the super is not deemed.
  7. Who is the income stream strategy best suited to
    Thos paying an income tested fee

    • Have either
    • substantial financial assets and contribute to super

    Super in accumulation phase
  8. Why could someone be better off with their investments in a pension for age pension
    Will reduce their asssesable income

    Income from pension is the pension payment less the deductible amount.
  9. What is the deductible amount for account based pensions
    (purchase price less commutations) / life expectancy at purchase date.
  10. Why does the income stream strategy not work so well with term annuities at the moment?
    High returns on annuities and low deeming rates.
  11. If someone is under age pension age (and receaving gov support) and has the option of moving assets to super or pension what is a disadvantage of moving to pension?
    The pension assets will be treated as an asset and may reduce level of government support.
  12. Who is suitable for the larger accomodation bond strategy?
    paying income tested fee

    have substantial financial assets

    entering a facility that requires an accomodation bond.
  13. Why does the larger accomodation bond strategy work
    Accomodation bonds are not deemed or treated as an asset so the strategy can decrease the income tested fee and increase the age pension.
  14. What is a major consideratinon when choosing the accomodation bond option
    Accomodation bonds don't make any investment returns.
  15. What has made the accomodation bond increase strategy less effective
    Lower deeming rates.
  16. What could an operator give you a discount on in exchange for a higher accomodation bond
    Discount on the retention amount.
  17. Why won't the investment bond strategyy work if the new leglislation is put into place
    Because the ITF will be asset and incoem tested.
  18. With the investment bond strategy the funds must be ____ into the trust
    gifted into the trust.  Otherwise it will be double counted as an asset for centrelink.
  19. What is an estate planning consideration for insurance bond in trust strategy?
    Lose ability to use testemantary trust.
  20. If the client does not end up better off, why may they still want to pay a higher bond?
    To secure a spot.
  21. Can you renegotiate the price of the bond once the resident has moved in?
    Strictly speaking no - but you could try
  22. What is a strategy that you can use for self funded retirees to reduce the ITF with the assets and income test and insurance bond
    They only need to do the assets and income test once - so use an insurance bond strategy, do the assets and income test and then unwind the whole thing.
  23. What is a strategy for ABP and self funded retirees and assets and income test?
    Reduce the abp below deductible amount - do the test and then increase to whatever you want.
  24. Will a POA allow you to act on behalf of a trustee?
    No - you need to actually be the trustee.
  25. The only time you can legitimately increase the bond is:
    When you move to a better room in the same facility
  26. If your client can only get into a place they hate at the moment what is one strategy that will give you more flexibility down the road
    Pay a higher bond - because you can't change the bond when moving and it will give you more flexibility.
  27. What is a strategy that you can use if you want to move to another facility but need to pay a higher bond?
    Move out for 28 days - e.g. to a hotel - then you can pay a higher bond at the new place.
  28. High care extra service facilities can ask for charge or bond.  But they will always go for ______
  29. If kids are going to live in house, must get some rent to:
    Get asset test exemption
  30. What is the problem with  a lot of reverse mortgages with regards to aged care?
    When people move out of the house it triggers the mortgage.
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Aged care and Fee reduction strategies
2012-06-20 09:51:42
Aged care

Aged care and fee reduction strategies - June 2012
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