Information based on current fees and charges as at 20 March 2023.
Please note, the information and strategies contained in this article are intended as general advice only, and while every care is taken, we make no representations as to the accuracy or completeness of the contents. We have not considered your personal circumstances when developing these strategies. We recommend that you seek personal advice to ensure these strategies are suitable for you.
One of the major questions asked when entering permanent Aged Care is, ‘Do I need to sell my home?’ The simple answer, no, not always.
Each person’s situation is unique, and this article will look to unpack some of the important considerations in deciding whether to sell or hold the home.
The table below provides an overview of how the home is assessed in means tests used to calculate your Aged Care costs and Age Pension payments.
|Situation||Effect on Aged Care||Effect on Age Pension|
|1. Member of a couple with one member staying in the home.||Exempt from assessment||Exempt from assessment|
|2. Both members of the couple are in care.||Home counted up to the home exemption cap each*||Exempt for the first two years of permanent care from the date the second member moved into care|
|3. Protected person in the home1||Exempt from assessment||Exempt for the first two years of permanent care|
|4. No one remains in the home/ or person not seen as a protected person||Home counted up to the home exemption cap*||Exempt for the first two years of permanent care|
*Home exemption cap at 20 March 2023 is $193,219.20
1 Information on who is a protected person can be found the Services Australia site
For the purposes of calculating your Aged Care costs, the home will be exempt as long as you meet the conditions in options 1 or 3 in the table above. So, even in 2 years’ time, when the home exemption cap is still being used, it generally won’t have a further impact on means-tested fees while retained.
However, the effect after 2 years on the age pension or service pension may have a negative impact on your finances.
If the home is still retained after two years and it is not your partner who is residing in the home, the Centrelink age pension assessment will now count the value of your property as an asset when calculating your Centrelink pension entitlement.
If this causes your pension payment rate to drop, it could make Aged Care and personal costs harder to meet going forward. This may mean you need to consider your options with what to do with the home at this point and whether retaining it is still feasible.
By seeking financial advice, you can better understand the impacts around the home and meeting cashflow needs going forward, ensuring your decision works for you and is in your best interest.
If you decide to retain the home, there are options available regarding what you can do with it.