Finding a final resting place

There comes a time in our life when old age suddenly dawns upon us. There are exceptions of course. Those who die young never experience old age and those whose health deteriorates comparatively early, no doubt have more warning of the approach of old age.

For me it is still on the horizon and not actually here yet (silence you rude buggers!). However for my parents it has definitely arrived. Now old age doesn’t need to be a bad thing, but one thing is for certain; it definitely changes a lot of things.

Sadly none of the Governments of the last fifty years seem to have paid much attention to the changing demographic make-up of our country. They have all told us plenty of times along the way that we were heading towards a time when the oldies would outnumber the young ‘uns, but they seem to have taken very little account of it in their planning.

What this has led to is a very messy situation in regards to the needs of those older people. Health services for the elderly are notoriously complicated and difficult to access and unless as an older person you have a tenacious advocate working for you it is likely you will miss out on many things you could be entitled to and get ignored by many agencies that would have us believe they are there to help older people.

Rules have been devised to ensure assistance is not wasted on those who have amassed fortunes along the way, but those rules have been developed without a broader overview of the developing situation. Nowhere is this more noticeable than in the area of housing for the elderly.

I will share some of what I have found out over the course of the last couple of years in the hopes that some of my readers might be saved some of the grief I have encountered while trying to negotiate this slippery path.

The options when an older person can’t live in their own home any longer are as follows:

·         Move in with kids

·         Council housing

·         Retirement village

·         Rest home care

·         Renter units in a retirement village or rest home

The first of these is often not possible for any number of reasons. The house might not be suitable for example it might have stairs; it might not be large enough to accommodate two extra people; the kids might not live anywhere suitable; or they might not be able to afford to stop working and look after their parents. In many cases more than one of these factors will prevent this option from being a goer.

Council housing

The option of council housing is only available to those with absolutely no means, so unless your folks are absolutely boracic this one is out of the picture. The asset limits might differ slightly around the country, but in Tauranga for example the limit is $30,000. This means if your parents have just sold their house they will be well outside those limits.

Retirement villages

Retirement villages have a lot of obvious benefits and several hidden fish-hooks. Here your parents will have a chance to ‘buy’ a small villa, apartment or cottage within a secure environment with a lot of useful age-related services available on-site. But don’t ever let them sign up for one of these without very carefully examining the licence to occupy yourself or getting your solicitor to do so if legal documents are not your thing.

The fish-hooks you will need to look out for are pretty damned sharp and you need to know what their implications will be. For example they are not actually ‘buying’ the property in the normal sense we Kiwis understand. They are entering into a licence to occupy which means the property can only ever be sold back to the company that owns the village. It therefore follows that at the very most they will only get back the amount that company has specified in the agreement at the outset.

In other words they will not see any capital gain from their investment and in some cases they could actually lose on the deal. I have seen one such agreement where, if the unit cannot fetch the same amount from the next occupant then the outgoing one takes the loss rather than the company.

Now that might sound fair enough, but when you realise that at the end of tenure, the company also charges a further 30% of the ‘purchase price’ back to the outgoing occupants you begin to get the picture of a greedy corporate ripping off vulnerable elderly people. Some agreements even require the outgoing occupant (actually this is usually their heirs as there is normally only one way you leave these places), to redecorate before the new occupant comes in and often they are forced to use contractors chosen by the village owners, so no chance to make any savings there either.

There is also a weekly fee of about $100pw to see that the windows are washed rubbish is collected, and as a part contribution to general village maintenance and access to various village facilities.

Rest home care

Rest homes involve a good deal of preparatory work and can also be a trap for the unwary. Of course a rest home environment means they will only have one small room to live out of and will have to get rid of nearly all of their personal stuff due to the space constraints involved with that.

If you are considering such an option you will first require an assessment carried out on behalf of the DHB to establish what level of care is required. An assessment level indicates whether or not they are entitled to subsidised care. This is very important because if they are not entitled to subsidised care the full costs will have to be borne privately.

The assessment involves three basic criteria; care needs; asset levels; and income. Assets cannot exceed approximately $230,000 for a couple, which if they have just sold a house means they will probably not qualify. Income will not be a problem if their only source is NZ Superannuation, or a benefit for a widow, invalid or service veteran.

The care needs category is the where the assessors have the most scope to disqualify. Problems arise when one half of a couple qualifies for care and the other does not and trying to find out exactly what qualifies is damned near impossible as the actual criteria are shrouded in DHB jargon and mystery. I can only conclude the DHB is suffering from a variety of paranoia which causes them to keep this stuff secret in case anyone learns how to qualify and constructs an elaborate opera to act out to achieve their ends. Good luck to anyone trying to do that with an old person who has forgotten what you told them ten minutes ago!

However what I have been able to learn is that unless your parent has dementia – and good luck getting a diagnosis of that despite tons of visible evidence – or an inability to feed or dress themselves, they will almost certainly be classified as fit to look after themselves and ineligible for subsidised rest home care.

Fair enough; you might think. Why not just pay for their care? For the uninitiated I will now reveal the cost of care in such establishments when the subsidy is not available. Are you sitting down?  For just one person to be cared for in a rest home you are likely to be paying between $800 and $1200 per week (between $41,600 and $62,400 per year).

That sum probably isn’t unreasonable when you consider all their needs are theoretically being met, but on an affordability level it can be another matter altogether.

Hospital level care in a rest home falls into the same price range.

Renter units in a retirement village

Renter units sound like a good option when contrasted against the costs of rest home care if a subsidy is not available. But at around $500pw ($26,000 per year) they can be costly if your relative stands a good chance of living for some while yet.

It’s a minefield dear readers and one which some of us have already almost had our legs blown off on and which many more of you will have to negotiate sometime in the future.

After seeing all the options, the retirement village option doesn’t seem so bad. Just make sure you check that agreement first.

Good luck, guys and gals. You will need it.

Retreads in the future (or punctures on the road to retirement)

I was talking to a friend the other day who, like many of us, found 2012 to be one of the less rewarding years of his life. I notice that his was not a unique experience as a significant number of my friends have said something similar. I, myself would have to say that 2012 was one of the least enjoyable years of my life.

Hopefully my misfortunes did not in any way contribute to theirs! I do realise some of these bad experiences have a degree of infectiousness about them.

However from my observations it would appear that most of my friends who were less than thrilled about 2012 reached that stage independently of me.

It would seem that the year just gone might not have been the end of the world but it did bring a lot of nastiness from people in politics, scumbags on the streets, and the 1% for whom any slump in the marketplace was an annoyance rather than a life changing bad event.

My friend whom I started this blog about said he might take retirement this year if certain things didn’t look up for him. He is not a wealthy man who would readily choose such an option without consequences. But he is approaching the qualifying age for Universal Superannuation and feels he doesn’t want to go on struggling along for the rest of his life. He is thinking of choosing to enjoy the rest of his life rather than working himself into the grave.

This is a sentiment I can relate to. While I still have a handful of years before I am old enough to receive Super, I could well make that choice as well when the time comes, despite the fact that unless my fortunes turn around dramatically soon, I will not be ‘set up’ for retirement either.

I think 2013 is the year when we should all consider our retirement, but we need to get a couple of the myths and fairy stories out of the way first.

For many years the very well meaning Diana Crossan, our outgoing Retirement Commissioner has been egging us all on and encouraging us to think about the financial aspects of our impending retirement. This is sound advice and many of the suggestions that came from the Retirement Commission made very good sense......in theory. They would have made good sense in practice as well were it not for one thing; an increasingly large number of us need all of our income to cover our living expenses thus leaving no room for savings.

It is the very same Catch-22 that has led to our incredibly high level of personal indebtedness. I have often heard people from the generation prior to mine saying that people are mad to take out home loans as big as they regularly do these days. But what they fail to realise is that most people would never have any chance of owning a house if they had to save up a 30% deposit. They would be long in their grave before they ever got there because house prices have reached levels where even a 20% deposit is equivalent to more than a year’s wages for the average buyer. The only chance many first time buyers are likely to get is if they can wangle a home loan of 90% or more. This puts them in grave danger should they ever lose their job, which is becoming an increasingly common occurrence these days. Thus it doesn’t take a genius to work out that people who can’t afford to save money to get themselves into a house when they are young and healthy are going to be pretty well buggered by the time they reach retirement age, especially if one of the useless governments along the way has dismantled the Universal Super entirely.

But what about Kiwisaver I hear you ask? What about it indeed. Kiwisaver is not like Universal Super at all; it is an investment which means it is subject to all the pressures that any other investment is. Theoretically you could be paying into a Kiwisaver scheme all your working life and get to the end of it and find they have lost your investment. This is not as crazy as it sounds because we have already had the government tinkering with Kiwisaver and they haven’t been paying into it as they agreed to for some time now. Who will follow up and remind them on a regular basis until they make good the deficit?

Mind you I guess you could also find your government has spent your Universal Super as well. Chances are if your Kiwisaver did disappear down a hole (and into the pocket of some sharp money man) there would be nothing you could do about it because it is not a guaranteed income unlike the Universal Super was.

So I think we need to place far less emphasis on the financial aspects of retirement and more on the lifestyle implications. If this sounds simplistic, I am sorry, but some things are more important than money. But that doesn’t mean I don’t want heaps of it. It just means that when it comes right down to it, my peace of mind (or is that piece of mind?) requires that I am generally having a good time and when you don’t have any time to do things that make your heart sing, that is not a good time.

I am fortunate that I have found one thing that I quite enjoy doing and another which I love, albeit that I have discovered these roles extremely late in life. However I am also lucky that I have a whole heap of other things that I want to do when I retire. Actually I’d love to get on with many of them now, but that ugly bastard called reality says that if I try a stunt like that I will be ‘enjoying myself’ without a roof over my head and that would rather take the edge of any potential fun I might have. Thus I will have to keep scoping out those earning opportunities for a while longer yet and put my retirement ambitions to one side.

But mortality is a pretty random thing so I will be making my best efforts to have a good deal of fun in the meantime anyway. The Mayan’s were wrong (or taking the piss) but at the end of the day (not world) we just never know when that final curtain might come down. Make sure you have lots of fun in 2013; I intend to.