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Financial hardship options for older people

Last Updated at October 6th 2021
If you reach retirement without adequate finances in place, have run out of money during retirement, unexpectedly have to retire due to redundancy, or are trying to access aged care without enough money to pay for it, there are Government financial hardship options available to assist you.

Key points:

  • The Age Pension is intended as a backup for people in retirement who run out of their own savings
  • There are multiple financial hardship payments available through the Government
  • Free counselling services can be accessed if you are struggling to manage your finances
Call now for an obligation-free chat regarding Financial Services options for you or your loved one with a financial services expert.
Older woman concerned over money.
If you are experiencing financial hardship, the Government can provide financial assistance to older people who need it. [Source: Shutterstock]

Not everyone is able to build their finances up to cover themselves during retirement or for aged care services, due to socio-economic factors, family breakdowns, or monetary problems. 

For some, who have experienced homelessness or are at risk of homelessness, they have had less time and opportunity to prepare themselves for retirement or future aged care costs.

People in these difficult situations can receive support from the Government, but it can be tricky knowing what is available or how to access these additional payments, especially if you have limited access to information and resources.

So what is out there to help? Together with Alteris Financial Group we've put together an overview of the hardship options you may be able to access.

Age Pension

The Federal Government's social security payment for people over the age of 65 is a safety net for older people who enter retirement or run out of their own money in retirement. 

The purpose of the Age Pension is to make sure no older person is left in poverty during their later years.

When accessing the pension, it will only provide you with enough money for the necessities of everyday living.

It ensures you can pay rent, buy food, and purchase any other necessities you require to live a happy and healthy life.

The Age Pension is generally revised twice a year, in March and September, and is currently $882.20 for a single person and $1,330 for a couple (20 September 2021 rates).

You can read more about the Age Pension on the Aged Care Guide.

Department of Veterans' Affairs (DVA) financial assistance

If you are a veteran or widow/widower of a veteran and currently receive services through the Department of Veterans' Affairs, you will likely be eligible to access financial assistance through the DVA.

You can choose to access the Age Pension through the DVA which will function exactly like the 'regular' Age Pension through the Services Australia. You can only apply for one of these Pensions.

To file for a transfer of payment from the Centrelink Age Pension to the DVA Age Pension, head to the DVA website.

You are not able to receive any other supports, like a DVA Service Pension, while receiving the DVA Age Pension.

There are other additional financial benefits you may be able to receive through DVA, like rent assistance, the energy supplement, the pension supplement, clothing allowance, Essential Medical Equipment Payment, Certified Essential Medical Equipment, or Certified medically required heating and/or cooling - all paid through the DVA.

Contact the Department of Veterans' Affairs on 1800 838 372 to find out what you might be eligible for or to access help and advice.

Financial hardship assistance

If you are unable to pay aged care costs due to financial issues out of your control, then you may be able to receive financial hardship assistance from the Government.

This can pay for your overall costs for aged care services, including Home Care Packages, nursing homes or short term respite care.

Financial hardship assistance is only provided to older people who have completed an Aged Care Calculation of your cost of care form, have assets that are valued less than $37,732.50 (20 September 2021 rates), and have not gifted away over $10,000 in the last year or over $30,000 in the last five years.

You will also need to fill out an Aged Care Claim for financial hardship assistance form.

Services Australia will review your application and determine whether the essential expenses you have identified fit within normal daily living costs.

Nursing home essential expenses can include nursing home fees, private health and ambulance cover, ongoing medical expenses, dental care, transport, and more.

Home care essential expenses can include fees, food, house costs like rent, insurance, rates or utilities, telephone and internet; private health and ambulance cover, artificial prosthetics, and more.

Keep in mind that financial hardship assistance typically applies for 12 months, you will need to re-apply for financial hardship. You will need to advise Services Australia if there are any changes to your situation during the last year.

Hardship supplement

If you cannot afford to pay for care due to financial problems out of your control, then you may be eligible to receive an extra supplement to assist with these payments.

The Hardship Supplement is available to people receiving a Home Care Package, respite care or live in residential aged care.

This supplement is an additional amount paid by the Government to the facility or service provider to assist in covering your aged care costs.

To be eligible, you will need to fill out the Aged Care Claim for financial hardship assistance form for Services Australia.

There are certain application exemptions for older people who require the Hardship Supplement straight away. You can find out more about it on the Government Health website.

If you end up moving to a new provider, you don't have to apply again because your Hardship Supplement will move with you.

Rent Assistance

If you are living in a home you don't own or make payments for a site or moor fee for your boat or place of your removable home, then you may be eligible for rent assistance. 

You can even receive rent assistance to go towards your rental in a retirement village.

This payment is usually paid on top of your Age Pension to go towards the rent of your current living arrangement.

Find out more about rental assistance on the Aged Care Guide.

Reverse mortgage

If you are asset rich but income poor, then you may benefit from a reverse mortgage. If you still own a home, a reverse mortgage would utilise the equity you have in your home, which would be paid back after you die and once your house is sold. 

You can access a reverse mortgage for more than just paying for aged care.

A reverse mortgage can be used to cover your day to day living expenses. Read more about reverse mortgages on the Aged Care Guide.

Seek advice from a financial expert before engaging in a reverse mortgage, as there can be risks.

Free financial counselling

You may be able to access free financial counselling if you are experiencing financial hardship or struggling to manage your finances.

Some services are funded by the Federal Government whereas some private financial organisations provide this assistance to people who are struggling as an act of goodwill.

Commonwealth Financial Counselling is provided by community and council organisations to assist those facing financial issues, including managing debts and making better money choices.

You can use the National Debt Helpline to access these services by calling 1800 007 007. This line also connects you directly with a financial counsellor to talk about any issues you are facing.

Free financial services generally don't provide financial planning assistance, lending services, or legal advice.

If you are looking at other benefits or entitlements that may assist you financially, read our article on the Aged Care Guide.

All cases of financial hardship are individually assessed by Services Australia and you should receive a response to your application in 28 days.

*Content created with assistance of Alteris Financial Group

What assistance have you used when you were struggling financially? Tell us in the comments below.

Related content:

What a financial advisor can do for you
Important questions to ask your financial advisor
Benefits and entitlements for retirees and seniors

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