The amount of bond paid may have implications on pension payments, ongoing costs of aged care and the assets left to the estate. For example, in some situations, negotiating a higher bond may lead to discounts on fees and charges in exchange for the additional capital up front.
This in turn may increase pension payments and reduce income tested fees.
There are a number of things to keep in mind when structuring assets prior to a decision on aged care, particularly around what does and does not count as an assessable asset.
For example, while the former home may be exempt for social security purposes if certain criteria are met, it generally does form part of the assets for entry to aged care.
Rules around gifting of assets should also be considered. Any amount gifted on or after 10 May 2006 that is over $10,000 in one financial year, or over $30,000 over five financial years, will be assessable.
Tax offsets may be claimed by the resident or even the person who financially supports the resident in aged care.
For example, the net medical expense tax offset allows for a reduction in tax payable for approved medical expenses such as the accommodation charge, periodic payments of an accommodation bond or extra service fees paid in excess of $1,500 per annum.