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Can I continue to manage my money while in aged care?

Handling your own money and finances can be a big part of feeling independent as an adult, so it can be a worry for some about what will happen to their financial affairs if they move into aged care.

Last updated: March 28th 2022
Older woman organising her financial affairs
If you are capable of understanding and managing your financial affairs, then can continue managing your money in aged care. [Source: Shutterstock]

Key points:

  • You can continue to manage your money while living in aged care
  • If you begin finding it difficult to manage your own money, you should ask for extra help or hand that task over to a trusted person
  • Even if you don't manage your financial affairs, you can still have involvement in your finances

Older Australians may go through this struggle when they enter residential aged care and they have to think about the possibility of having their finances managed by their family.

When moving into aged care, you don't have to sign over your financial affairs to be managed by someone else, but you do need to have a serious think about whether you want to continue managing your money while in aged care. Or it may be time to seek legal advice to review and or put in place measures that can protect you if you lose capacity to make financial or lifestyle decisions for yourself.

Kerri Mendl, Lifestyle and Care Financial Adviser from Alteris Financial Group in Brisbane, says that older Australians are more than capable to continue managing their finances and if it becomes difficult, there are options to simplify the process.



Managing your money

If you are capable of understanding and managing your financial affairs, then there should be no reason why you can't continue managing your money once you move into aged care.

"Just because you are older and maybe you are unwell doesn't mean you are unable or unwilling to take care of your money," says Ms Mendl.

"I met with a gentleman recently who is 90 and he is very active and engaged [in his finances]. Most of the people I talk to only have a bank account and maybe a property, but we do have some clients that have investments. I have other people that have rental properties.

"[Older people] are very capable - as long as they are wanting to look after their money and they feel comfortable doing it, there is no reason they can't!"

Ms Mendl suggests simplifying your finances when you can to make it easier to manage. For instance, she finds that many people can have anywhere over five bank accounts, so it can be definitely worthwhile reviewing your entire financial arrangements and seeing how you can make it easier to manage.

When it comes to managing your own finances, it can become particularly important to get advice about the structure of your finances, including what to expect for the future.

For instance, you may have kept your family home but now it has gone past the two years mark and it is now being assessed by the Government and may be impacting your Aged Pension entitlement.

"It is really useful to get good advice right at the start so you know what to expect and then you can spot if something has gone wrong and get the right help to help you with that," says Ms Mendl.

Signs to get help

Ms Mendl explains that there are some instances where you may need to get extra help with doing your finances, including:

  • Forgetting how to do banking or how to get into your bank accounts
  • Struggling or impatient with online banking
  • Still using a passbook, also known as a bankbook, and can't get to the bank for transactions due to mobility or transport issues
  • Being overwhelmed with managing your finances

Ms Mendl says, "If [you] are getting distressed, then that might be a clue that maybe it is time to simplify."

If this extra support isn't working, then it might be time to start handing finance management over to someone you trust.

Ms Mendl also highlights the importance of ensuring that you have Enduring Power of Attorney (EPOA) and Enduring Guardianship documents are in place, in the case of you losing legal capacity. It's also an opportune time to check if your Will continues to be reflective of your wishes.

This should be organised as soon as you can - whether you are in aged care or still living at home, as you cannot put those in place if you have lost legal capacity. You can learn more about legal capacity in our article, 'Organising legal matters when living with dementia'.

Who else can help?

Your partner, family and close friends, or a financial advisor, should be assisting you with your finances and financial decisions if you need it.

Ms Mendl says it is important to understand what level of support you wish to have when it comes to your financial affairs.

This could be minor assistance paying for bills, someone being a nominee for Centrelink and Services Australia and dealing with these groups on your behalf, or going to the bank and getting cash out for you.

You can make someone an 'authority' on your bank account for reasons like your physical or mental health or if you have issues accessing your bank - like it being too far to travel.

In these cases, an authority of the account doesn't have complete control over your account. Generally, they can pay your bills or transfer money from the account, but they cannot access products like a home loan or credit card or are able to open any new accounts.

This means you can still have control over your money and general spend, but have someone else to keep on top of all your bills and expenses if you need.

Ms Mendl says it is important to talk to your bank about rules and regulations for authorities on your bank account/s, as it can differ from place to place.

Your aged care facility can provide some assistance to make it easier to pay for aged care fees and services, as well as ensure your valuables are protected.

Direct debits or payment arrangements can be organised to go directly to the facility so you don't have to worry about following up on bills.

Additionally, some aged care facilities can provide room safes or lock draws so that you can keep any physical cash or valuables safe.

Implementing an EPOA

If you are considering getting help with your financial affairs it's important to formalise this properly and have a written agreement in place. An Enduring Power of Attorney (EPOA) is a person you trust that can make important decisions about your financial affairs on your behalf.

Each State and Territory has their own legislation around EPOA's, so make sure to know how the laws work in your location. To learn more about EPOA's, read our article 'What is an Enduring Power Of Attorney'.

Choosing a person you trust, like a partner, family member, or close friend, can ensure that you are able to continue having your financial affairs dealt with to your wishes, even when you are no longer able to make those decisions yourself.

If you don't have an EPOA in place and lose legal capacity to handle your finances, your financial affairs may be handed over to a Public Trustee instead of someone who knows you and what you want.

Ms Mendl says the EPOA is an important document and you should be reviewing this regularly to make sure it is up to date.

Your EPOA can have specific limitations in it to make sure your finances are managed to your wishes.

When implementing an EPOA, Ms Mendl says to seriously think about how it will work and if it will work well.

Ms Mendl gives the example of three brothers who didn't get along and were made joint EPOA's together. They were required to act jointly together on decisions and it resulted in the EPOA system being unworkable because the three brothers could never agree on a decision together.

She says that with recent border closures, if you have joint EPOA's it can make the process very tricky if you are unable to be there physically to make financial changes or decisions.

Maintaining your financial independence

There are a lot of steps your EPOA can take to ensure that you still are involved and have financial independence even if you no longer manage your finances yourself.

You should always be included in decisions around your money, even when you have lost capacity to make important decisions.

Ms Mendl suggests that you could have your EPOA take you to all meetings about your finances and take the lead in those meetings, including asking questions and understanding how everything in your account is being managed.

She recommends having a book where you can jot down transactions so you are aware of what your money is being spent on.

A helpful tip is using the note option when banking and making transactions or on banking slips when you get money out, this means that you are aware of where money is going. For instance, $50 for a "new dressing gown" or $15 for "coffee and cake". This can also be helpful for other family members to know that the accounts are being managed appropriately by the EPOA.

Be open with your EPOA about the best way to organise your financial affairs that still provides you access and monetary freedom.

Your EPOA should make sure that you always have access to money when you need it, especially when you go on outings, want to buy new clothes, or visit restaurants and cafes.

Ms Mendl says that she knows of a client who, after talking with the aged care staff, helped their father set up an online food delivery service so that he could occasionally enjoy spicy food that he wasn't able to access from the aged care home.

If an aged care facility has onsite amenities, like a hairdressers or café, these can sometimes be "added to the bill", so you don't have to worry about having cash on hand.

You should always have access to money when you need it, so discuss with your EPOA about a strategy to make sure you are always cared for.

Are you worried about losing your financial independence if you enter aged care? Tell us in the comments below.

Related content:

What is the best way to find a good financial planner?
When is the best time to start planning for your retirement?
Understanding aged care costs

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