Quantifying the technical benefits of Challenger CarePlus

Moving into an aged care facility can often be unexpected or unplanned. However, a well-structured aged care advice plan can not only help with managing aged care costs to ensure sustainable cash flow but also provide financial peace of mind for loved ones left behind. Challenger CarePlus was introduced as a solution-based offering that provides clients with regular payments for life and provides 100% of the investment amount to nominated beneficiary(s) or their estate in the event of death¹.
 

CarePlus is comprised of an annuity and an insurance component and can be offered to clients receiving/planning to receive Government-subsidised aged care services. Together, these two products also offer a range of technical benefits which can, in certain cases, deliver clients, reduced aged care costs, reduced tax payable and estate planning certainty. This article quantifies the technical benefits of CarePlus with the help of a case study.

Interaction with social security and aged care rules Centrelink assesses the two components of Challenger CarePlus – CarePlus Annuity and CarePlus Insurance separately and the total assessment is the sum of the assets and income assessments for both the CarePlus Annuity and CarePlus Insurance. This also applies to the means test assessments used to calculate aged care fees. For social security and aged care means testing, CarePlus investments made from 1 July 2019 are assessed as outlined in Table 1:

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