Clearer distinction of advice required around aged care costs: Review

A recent review has outlined the need for a proper distinction between financial advice and information obtained from aged care providers when it comes to understanding the costs and financial impact of residential aged care accommodations.

The Independent Review of Residential Aged Care Accommodation Pricing report, compiled by the Department of Health, Disability and Ageing, highlighted it is the responsibility of providers to ensure their staff do not provide financial advice outside of information relating to aged care costs.

The review acknowledges only financial advisers with an aged care specialist designation, accredited via the Aged Care Steps Accredited Aged Care Professional program from the Financial Advice Association Australia (FAAA), can advise on the specific area due to "the complexity of accommodation pricing and the impact the method of payment can have on an individual."

It is also calling on the government to work with the FAAA to ensure advisers have access to accurate, up-to-date training, it said.

FAAA chief executive Sarah Abood welcomed the recognition of the designation.

"The recommendations would lead to a clearer, safer pathway for older Australians, enabling these people to make more effective aged care decisions," Abood said.

"This is particularly critical as Australia's population ages - the proportion of people aged over 85 is one of the country's fastest growing demographics.

"This is essential to protecting older Australians and ensuring they receive high-quality financial advice on aged care. We would welcome the opportunity to work with the department and government to ensure aged care specialist designations are recognised appropriately in financial advice licensing requirements."

The review recognisesaged care providers, aged care specialist officers (ACSOs) and Financial Information Service (FIS) officers are limited to the provision of information, not financial advice.

It also reinforces the findings of the recent whitepaper by Aged Care Steps on the regulation of aged care financial advice.

Aged Care Steps director Louise Biti said the report validates long-standing concerns about the risks created when aged care staff attempt to guide families through complex financial decisions.

"This report reinforces what our whitepaper made clear - aged care financial advice must be delivered by registered financial advisers with specialist training," Biti said.

"Aged care providers and FIS officers play an important role in providing information, but they need clear boundaries and safeguards to ensure they don't inadvertently step into financial advice."