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What happens to the family home when moving into permanent aged care?

This question is asked by 90% of clients I see, who are looking at making a move to permanent aged care themselves, or for a loved one.  Depending on a clients’ circumstances, the home may be assessed at a capped value, its true value or, exempt entirely.   

It is a common misconception that people are forced to sell their homes to fund a move to permanent aged care.  Depending on financial assets outside the family home, assets could be structured to cover the costs without accessing the home equity.  Where there are limited other assets available, it makes financial sense to sell the property to cover lump sum and ongoing aged care fees.   

If the value of the home exceeds the current Home Exemption Cap, the home will be counted at this capped amount, regardless of the true value.  The Home Exemption Cap is currently set at $169,079.20 (as at 20 September 2019), increasing slightly with CPI each quarter.  This capped value will apply to both members of a couple moving into aged care.     

If the home has a true value of less than the Home Exemption Cap of $169,079.20, the true value of the property will be assessed. 

Where you are a member of a couple, or have someone living with you in the property, the home may be exempt from the aged care assessment.  For the property to be exempt, the home must be occupied by a ‘Protected Person’ at the time of entry to permanent care.  A ‘Protected Person’ includes;  

  • Spouse; 
  • A dependent child; 
  • A carer who has been living with you in the property for the previous 2 years, and is eligible to receive a means tested payment from Centrelink or DVA; or 
  • A close relative who had been living with you in the property for the previous 5 years, and is eligible to receive a means tested payment from Centrelink or DVA.   

If the Protected Person leaves the home, or loses their means tested payment from Centrelink or DVA, the home will no longer be an exempt asset.    

When the home is sold, the capped value no longer applies, and full sale proceeds will be assessed.   

We believe it is imperative to obtain financial advice prior to making any financial decisions on the home to ensure you are aware of the aged care assessments, and the Centrelink/DVA implications.  

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  1. Chris on January 3, 2022 at 8:31 pm

    If a grandchild and his family move into there grandma’s house to look after the house to maintain it as there grandma has been put into age care is it illegal

    • The Muirfield Team on January 17, 2022 at 8:42 am

      Hi Chris,

      This is not necessarily illegal and will come down to a family agreement.

      I trust that helps.


      • Eileen on July 9, 2022 at 8:50 am

        Was wondering the same thing: if we were to move a family member into a vacant house whose owner is in Aged Care, will there be rental income imputed even if they are not paying rent? This would happen after the two year exemption period.

        • The Muirfield Team on July 12, 2022 at 12:02 pm

          Hi Eileen,

          Thanks for your question. It’s important to make a distinction between Centrelink Age Pension and Centrelink Aged Care fee rules.

          We’ll break this down in our response.

          Generally speaking, Centrelink will count actual rent received and will not assume rental income for a property when determining a payment. If rental income is received, it could have an imppact on Age Pension payments. For Aged Care, ‘if’ rent is received, it could effect the means tested fee.

          For Age Pension calculations, the home will not be assessed as an asset for the first two years of entering Aged Care. This exemption remains in place regardless of whether another person moves in. After two years, the home will be assessed when calculating an Age Pension payment.

          For Aged care fee calculations, the home will be assessed at a capped value.

          I hope this helps

          Zac Dodds

    • Suzanne Doycinosky on September 1, 2023 at 12:59 pm

      My mothers administrator are the state trustees. I live with my mother as well. I am her daughter.
      Can the state trustees sell the house if she moves in a nursing facility.

      • The Muirfield Team on September 1, 2023 at 2:16 pm

        Hi Suzanne, that’s a very interesting question you raise.

        State Trustees have an obligation to act in the best interests of your mother, therefore, it is possible they could sell the house to help fund your mothers Aged Care costs.

        I suggest you seek a professional legal opinion regarding this matter.

        All the best


  2. Cheryl on September 4, 2022 at 2:22 pm

    Hi Zac, I have been my Dads carer for 6 years. We bought a house a year and a half ago. He put $400,000 into the house, so we could get a bigger house for the 5 of us to live in, we were renting prior. he doesn’t have his name on the title. He has also been paying us $1000a month on the mortgage as his contribution to living with us. He is going into an aged care home. How will this affect us as we are filling in the Centrelink form?

    • The Muirfield Team on September 14, 2022 at 7:33 am

      Hi Cheryl, thanks for your question.

      This question is a little too complex to be answering online and without the full background of your fathers financial situation.

      It’s important to first establish whether your father was seen to have gifted the $400,000 to purchase the home or if you created a “life interest” for him.

      The answer to this question, combined with your fathers finances will allow us to better determine the impact on his Centrelink and Aged Care payments.

      A further appointment would be required to determine the likely impacts and outcomes of this situation.

      All the best.


  3. Kym on September 10, 2022 at 12:09 pm

    If i am living in the family home and decide to put mum into aged care does the house need to be sold

  4. Jola Nardi on January 19, 2023 at 6:40 pm

    Me and my son have been living with mum and dad for over 22 years. My dad passed away 6 years ago and my son has been her full-time, high care carer for the past 3 years. The house is worth over 1.4million and she has some savings. Will we be forced to sell the house?

    • The Muirfield Team on February 17, 2023 at 3:02 pm

      Hi Jola,

      As we noted to an earlier message, a decision on whether you should or have to sell the home requires a detailed, well thought out plan.

      Zac can provide his opinion once he has a better understanding of your situation.

      If you would like to have a chat about your situation, please call our office on 03 5224 2700.

  5. Bob Hunter on January 26, 2023 at 8:46 pm

    Hi Zac, My wife is a Tennent in common with her parents in a property that her mother currently lives. My wife’s father is currently in care. My question is – if my wife’s mother goes into care does the property have to be sold to pay the care fees. Currently her father is paying his care fees out of his pension.
    My wife is living in another property that we brought together and hasn’t been living with her parents for 25 years.
    The only other assets that her parents have is money in the bank under 100k and two cars.
    Hoping you can advise us.
    Bob H

    • The Muirfield Team on February 17, 2023 at 2:59 pm

      Hi Bob,

      Unfortunately we cannot answer your question on this forum because it is specific in nature.

      A decision on whether you should or have to sell the home requires a detailed, well thought out plan.

      If you would like to have a chat about your situation, please call our office on 03 5224 2700.

  6. Amanda on February 26, 2023 at 10:39 pm

    Hi there,
    Our Mum had to move into aged care just over a year ago. She owns a unit which we are aware we will have to either sell or rent out after the 2 year window.
    Is it possible for a grandchild to rent it at a lesser cost than market rate and if so, how will affect her pension?

    • The Muirfield Team on March 1, 2023 at 3:03 pm

      Hi Amanda, we cannot provide you advice about how it may or may not impact your mothers Age Pension unless we have the full picture.

      If you wish for us to determine the impact, please call our office on 03 5224 2700.

  7. Alex on April 15, 2023 at 7:16 pm

    If you are a protected person, do you have to pay rent

    • The Muirfield Team on April 19, 2023 at 1:58 pm

      Hi Alex,

      You do not have to pay rent as a protected person.

      All the best.

  8. Amy on April 18, 2023 at 6:41 am

    I have been carrying for my Dad, with my family and I living with him for the past 3 years in the home he owns. I receive the carers allowance, but she to my husband’s wage, am not eligible for the carers payment. My understanding is that this means the home is not exempt of he moves into aged care as carers allowance is not means tested. Is this correct? Also, does he have 6 months from entry to pay his deposit ( therefore time for us to move, to sell the house, etc?)

    • The Muirfield Team on May 19, 2023 at 11:39 am

      Hi Amy,

      To be a protected person, the carer must receive a means tested payment from Centrelink such as Carers Payment in addition to the living requirements. If you are not in receipt of a means test pension, the house will be counted as an assessable asset. If you are unsure if this applies to you, check directly with Centrelink or book an appointment with Muirfield to discuss your personal circumstances.

      All the best.

  9. Gail Marshall on May 16, 2023 at 3:54 pm

    Hi, my dad went into care 12 months ago his house is vacant do we need to sell it next year?

    • The Muirfield Team on May 19, 2023 at 11:00 am

      Hi Gail, there is never an obligation to sell the home though financial circumstances may mean it it prudent to do so.

      Please refer to our recent article, Do I need to sell my home to go into care?, which contains a table outlining the circumstances in which the home is exempt from assessment when determining Aged Care costs and Aged Pension payments.

      I hope this helps.

      All the best.


  10. Barbara Gentz and john potter on May 19, 2023 at 8:43 pm

    Hi l really need to talk to someone on a phone to explain our position is this possible and when please

    • The Muirfield Team on June 20, 2023 at 4:19 pm

      Hi Barbara, please call our office on 03 5224 2700. Our Aged Care specialist, Zac Dodds, can help you out.

      All the best.

  11. Michell on June 25, 2023 at 1:55 pm

    I’ve been caring for my mother the last 7 years in the home she owns
    I have lived in the home with her and also received carers allowance and cares payment
    But it’s time for an aged care facility

    Do my siblings have the power to remove me from the house and sell it
    Once she is in care

    The house is valued at around $600,000
    I think the RAD is $500,000
    She has been means tested at around $26000 as my mother receives an aged care pension
    And her assets combined.

    I understand the house isn’t part of the asset means test,

    • The Muirfield Team on July 4, 2023 at 11:45 am

      Hi Michell, thanks for the question.

      There are a few more pieces of information we need before we can make comment about your situation.

      Please call our office on 03 5224 2700 and ask to speak to Zac, our Aged Care specialist.

      All the best.

  12. Emma on August 5, 2023 at 12:24 am

    If the house is only in my dad’s name so if he goes into care can my mother stay in the house?

    • The Muirfield Team on August 7, 2023 at 11:29 am

      Hi Emma,

      Based on what you said, yes, if your mother stays in the home she will likely be considered a protected person.

      All the best.


  13. Mary on August 15, 2023 at 2:52 am

    My father has recently passed and has left property is left in the will to my mother but states that if sold is to be split 3 ways with the children. What happens in future if mother needs nursing home placement? Will only the portion my mother would own be counted for nursing home deposit, or will the children need to forfeit their half of the inheritance?

    And while I live in the home with my mother for over 5 years, I understand that I’m technically not a protected person, as I cannot recieve carers payment, but would most likely only be able to get an allowance in future caring for her, unless I give up my hours at work, is this correct?

    • The Muirfield Team on September 1, 2023 at 2:18 pm

      Hi Mary, there are quite a few elements to your question.

      At the heart of it, no, you are not a protected person if you not receiving an eligible benefit/payment from Centrelink.

      All the best


  14. Jan on September 18, 2023 at 12:06 pm

    My mum went it a nursing home fully funded, because my dad was still living in the home.
    My dad now needs to enter a nursing home, what does that mean.
    In regards to selling the house, and what they will both have to pay

    • The Muirfield Team on October 17, 2023 at 2:52 pm

      Hi Jan. We would need to undertake a full financial review to be able to provide your parents with an Aged Care fee estimate.

      Please contact our office on 03 5224 2700 to discuss it further.

  15. Tamara Madsen on October 25, 2023 at 11:11 am

    I am the carer of one of my sons. He has lived with me in my house and is on disability pension. My other children also live with me, another son is also on disability because he has a chronic illness . They are adults and have lived with me for 20 years or more. If I have to go into a nursing can they continue to live in my house and do they have to pay rent? Thank you

    • The Muirfield Team on November 1, 2023 at 11:57 am

      Hi Tamara, thanks for your question.

      There is no requirement for your sons to move out nor are they compelled to pay rent.

      Having said that, it is important to understand if they are protected persons as it may impact your Aged Care costs.

      All the best.


  16. Lyle Cook on February 29, 2024 at 8:31 pm

    Thanks for this service.
    If a protected person sells the home and buys a smaller home is that new home protected?

    • The Muirfield Team on April 2, 2024 at 4:54 pm

      Hi Lyle, your understanding is correct.

      All the best.

  17. Jen on March 16, 2024 at 1:47 pm

    My dad is going into aged care. My mum staying at home. Both are on the pension. Can she sell the home and buy another house without losing money?

    • The Muirfield Team on April 2, 2024 at 4:53 pm

      Hi Jen, the value of a home is exempt when occupied by a protected person. If upon changing homes there are leftover proceeds, these will be assessed by Centrelink.

  18. Victoria on April 11, 2024 at 8:35 pm

    My in-laws own approx 66% of their home. One of their children has a mortgage on the remaining 33%.
    Their health is currently reasonable but in decline. If in the future, they both need residential aged care, will their home need to be sold? What are the implications for the child that has the mortgage on one-third of the house?
    This child works and does not receive any pension or carers payment.

    • The Muirfield Team on April 16, 2024 at 11:46 am

      Hi Victoria, thanks for the question.

      This is a complex situation which cannot be answered via this forum.

      If you would like to discuss your in-laws situation, please call our office on 03 5224 2700.


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