Forman Financial Services

Aged Care Strategy – Accommodation Payment – Pay accommodation contribution as a Refundable Accommodation Contribution (RAC)

This can benefit people who:

  • are low means residents and can afford to pay a lump sum RAC

Potential Benefits:

  • Paying a RAC saves the person paying a Daily Accommodation Contribution (DAC). The saving is equivalent to the amount of the RAC multiplied by the government interest rate (currently 5.96%pa)
  • People can choose to drawdown DAC from RAC
  • Amounts invested in a RAC are exempt under income and assets tests for social security purposes
  • Amounts invested in a RAC are an assessable asset for the aged care means test assessment however they are not deemed

Things to be aware of:

  • RACs are government guaranteed in the event the aged care facility becomes bankrupt
  • Once a RAC is paid the aged care facility does not have to refund the RAC until the person leaves the aged care facility
  • Costs involved in selling existing investments to pay the RAC
  • Consider a person’s estate planning wishes as RAC is returned to the estate of the person upon their passing

Aged Care & Home Care can seem complex.  We have a special offer for general advice for $225.00.
Please click here for more information.
For more information on this subject feel free to get in touch with us click here
To receive free updates on relevant information click here
To read more about specialised service offers for Aged Care please click here