When you move into aged care, some important decisions need to be made regarding your family home.
Your home and the means tested care fee
Your home will not be assessed when Centrelink determines any means tested fee you are required to pay if certain eligible people (also call “protected persons”) continue to live there. They include:
- An immediate family member (child or sibling) who has lived in your home for 5 continuous years immediately before you move into care and is eligible to receive a government income support payment
- A carer who has lived in your home for 2 continuous years immediately before you move into care and is eligible to receive a government income support payment
- If you retain your home and move into care and it isn’t occupied by one of the people listed above, then a capped amount of $173,075.20 (as at 20 March 2021) will be included in your assessable assets. Also, if you rent out your home, then any rent received (less allowable deductions) will be assessed as income.
If you sell your home, the full value of the sale proceeds will then be included in your assessable assets (regardless of where they are invested).
Your home and the age pension
When you move into care, you will need to notify Centrelink so they can re-calculate your entitlement. The table below shows a summary of the age pension assessment of the family home:
|Scenario||Income Test||Assets Test||Home Ownership State|
|Home occupied by partner||Not applicable as no income||Not assessed while partner occupies home||Homeowner|
|Home vacant||Not applicable as no income||Exempt for 2 years from date of entry. Full value assessed after 2 years||Homeowner (while home is exempt) Non-homeowner (once home is assessed)|
|Home rented||Rental income (less allowable deductions) assessed immediately||Exempt for 2 years from date of entry. Full value assessed after 2 years||Homeowner (while home is exempt) Non-homeowner (once home is assessed)|
|Home sold and balance used to purchase financial investments||Deemed immediately||Assessed immediately||Non-homeowner|
It is worth noting that proceeds used to pay a Refundable Accommodation Deposit (RAD) are exempt under the Centrelink/Veterans’ Affairs income and assets tests and can help to maximise entitlements but are included when calculating the means tested care fees.
If you or a loved one need advice on the financial implications of entering Aged Care, please phone our office on 08378 4000 to book an appointment with Matthew Kelly.