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Using a Reverse Mortgage for Home Care

02 February 2021

Heartland Bank News

Heartland is pleased to announce our reverse mortgage can provide support for Home Care

Ageing and Aged care in Australia

The Australian aged care system is designed to support the people in Australia as they get older, with extra assistance, either in their own home or a residential aged care facility.

Whilst moving into residential aged care may be the necessary option for those requiring round the clock medical intervention, managing this transition can be an overwhelming experience for individuals and their families.  Several important considerations and decisions need to be made, taking into account the suitability and location of the facility, affordability of the various fees that are payable and, most importantly, whether to the move into residential care is required, or if the recipient can stay in the family home to receive these support services.

Home Care in Australia has come a long way. With the Australian population now living longer than ever before, the majority of people never enter residential care, but remain living independently, with some support, in their own homes with the help of government approved Home Care providers.

Federal Budget 2020 – Impact on Aged Care services

On 1 July 2014, the Australian Government changed the way fees were calculated for Home Care Packages and aged care homes. These changes were part of reforms to make the aged care system more sustainable and affordable for senior Australians. Further reforms in the years following also saw a nationally consistent process for assigning Home Care packages to consumers and preparatory work, to support the establishment of a single unified system for aged care and Home Care.

In October 2020, in response to the demand for in Home Care packages increasing (and a significant waiting list), The Federal Budget allocated a further $1.6 billion to create an extra 23,000 Home Care packages, on top of 6,105 packages that were announced in July 2020.

Additionally, an updated, nationally consistent process to the allocation of Home Care Packages is also helping people avoid long waiting lists with multiple providers, prioritising based on individual needs and how long they have been waiting.

Using a reverse mortgage for In-Home Care

A research report released by RMIT in November 2020 about financing ageing in place, indicates 90% of senior Australians want to remain in their homes for as long as possible, but 29% do not have the funds to do so.

The age pension alone, even with a subsidised Home Care package, may not be enough to cover all the costs associated with care. This is where a reverse mortgage could help those who own their own home and need to access further funds for specialised care at home.

A Heartland Reverse Mortgage could enable you to access the funds you require for in Home Care without having to sell.

Heartland – providing further support

At Heartland, we understand how important the family home is, our reverse mortgage has helped over 21,000 Australian seniors access the equity in their homes to fund a more comfortable retirement without having to sell. We are committed to enabling Australian seniors to age in place, if that is what they choose to do. To further support this, we are pleased to announce the following initiatives:

  • Minimum Loan Waiver – Heartland will waive our minimum upfront initial loan amount requirement (usually $5,000), when a purpose of the loan is to fund Home Care needs so that our customers can access crucial funds when they need them to help them continue living at home. Funds can be assessed as regular, ongoing, advances or in cash reserve, to draw down on request. Our upfront waiver will ensure that customers are able to access the funds they need, as an when required, and provides further flexibility to what is already Australia’s best reverse mortgage.
  • Granny Flat Construction – A Heartland Reverse Mortgage can also be used to fund the construction of a granny flat (subject to our usual loan criteria, including age, location, and valuation). More about the Federal Government’s proposed changes to the Capital Gains Tax exemptions on Granny Flat construction can be found here.

If you are looking for a reverse mortgage to fund In-Home Care, Residential Aged Care, or to fund a Granny Flat – Heartland is here to help.  If you are ready to apply now, you can do so here, or please feel free to contact our friendly team on 1300 889 338 or [email protected]. We are here to help you.

What is a Home Care Package?

A Home Care Package is a co-ordinated package of service and care which allows an individual to live independently. The subsidies provided by the Australian government are based on an income and affordability test and are paid directly to the care provider.

Because everyone’s needs are different, they are categorised into four levels of requirements of Home Care Packages which range from Level 1 (requiring basic care) to Level 4 (requiring a higher level of care). More about Home Care Packages can be found here.

Information provided is accurate as of 02 February 2021 and may change from time to time.