We can assist in providing some insight, however, seeking financial advice from an aged care specialist during this time can ensure that the decisions that you and your family make will be the right decisions, whilst taking into consideration the impact to your financial situation, age pension entitlement and aged care costs. Making the wrong decision could result in a loss of age pension, increased aged care costs and a reduced estate to be passed on to the next generation.
We recommend that you seek advice from a specialist financial advisor during this transitional time into residential care to ensure that any financial decisions that are made are advantageous to you and don't impact negatively on your financial situation. Please ask if you would like a list of specialist financial advisors. A free financial information service is available through the Department of Human Services 132300.
Assess your finances - You'll need to know the value of your home and other assets and income to work out your care fees and/or refundable accommodation payment. A Department of Human Services Financial Information Service officer can give you basic information about managing your finances during your transition to aged care. You may also want to get some financial advice to maximise your entitlements and minimise your costs.
The decision on whether or not to sell the family home to enter a facility will depend on your personal circumstances and what you have negotiated with the aged care home you want to move to.
Your home is generally counted as an asset unless:
Your partner or dependent child lives there
A carer who is eligible for an Australian Government income support payment has been living there
for at least 2 years, or
A close relative who is eligible for an Australian Government income support payment has been
living there for at least 5 years.
Find out more details at My Aged Care: Assets assessments.
If you don't want to sell your home but are being asked to pay a refundable accommodation payment, the care provider may allow you to make a periodic payment instead.
If you move into a residential care facility without selling your home, it will be exempt from the age pension assets test for 2 years from the date you move into care. The start date for the 2 year exemption may vary if you are, or were, a member of a couple at the time you moved into aged care. For more information call the Department of Human Services on 132 300.
A lump sum refundable accommodation payment paid to a provider is exempt from the age pension assets test.
If you rent your home to pay for periodic accommodation payments, the value of your former home may count towards the Aged Care and Centrelink income and assets test, depending on when you entered aged care. If you moved into aged care before 1 Jan 2016 - While you are making periodic payments, your former home and net rent will be exempt from the Centrelink income and assets tests. It will be exempt from the Aged Care income test but counted as an asset under the Aged Care asset test,
however the value is capped.
If you moved into aged care between 1 Jan 2016 and 31 Dec 2016 - While you are making periodic payments, your former home and net rent will be exempt from the Centrelink income and assets tests. Your home and rental income will be assessed under the Aged Care asset and income tests, however the value of your home is capped.
If you moved into aged care on or after 1 Jan 2017 - While you are making periodic payments, your former home can be exempted for up to 2 years under the Centrelink assets test but will be assessable for Aged Care. A capped value applies to the Aged Care assessment. Your net rent will be assessable for both Aged Care and Centrelink.
If your long-term care needs are changing, find out what care options are available and choose a service that suits your needs.
We can assist in providing some insight, however, seeking financial advice from an aged care specialist during this time can ensure that the decisions that you and your family make will be the right decisions, whilst taking into consideration the impact to your financial situation, age pension entitlement and aged care costs.
Making the wrong decision could result in a loss of age pension, increased aged care costs and a reduced estate to be passed on to the next generation.
We recommend that you seek advice from a specialist Financial Advisor during this transitional time into residential care to ensure that any financial decisions that are made are advantageous to you and don't impact negatively on your financial situation. We can assist with a list of specialist financial advisors that may provide some direction in this area.
A free financial information service is available through the Department of Human Services 132300.