Centrelink pension reduction for partner working

Hi. My stepdad has early onset dementia and has just moved into residential aged care. He is 65 and has been getting the full disability pension. He should be approved for the pension to pay for his care fees at 85%. My mum was receiving a carer’s pension but is only 60 and now has to go back to work to live. From what I can tell on the Centrelink website, my stepdad will lose $0.50 for each dollar my mum earns over $300 a fortnight. This means that if she earns her expected $2,000 a fortnight, he will lose his entire pension. Mum will then have to pay his full aged care fees, leaving her about $400 a fortnight for her to live on (which is not possible, obviously). Is this really the case? She can’t retire and isn’t entitled to the aged pension herself for 7 years. What is she supposed to do? They have a house but only about $30,000 in savings/his super, a car and a motor home. Thanks

Hi Deb2t2,Whilst we are familar with aged care costs unfortunately we do not have expertise in the area of pensions. I think you will need to call Department Human Services (DHS) Income and Assets division on 1800 227 475 to help clarify your situation. Sorry we cant be of more help.

I’m 45, husband is in nursing home age 51, wife pension is being axed on the 20th March and I am going onto jobseekers, how can I work without affecting my husbands Disability Pension. If I do what your saying, what happens to my home after the 2 years?

Hi , I am in the same situation now. I have been on a wife’s pension for 27 years and for the last 3 my husband has been in a nursing home. I am 45 and my husband is 51 . I was told I would keep my Wife’s pension when my husband went into care as living apart due to illness , but now I have received a letter stating they are transferring me onto jobseekers payment on the 20th March 2020. Because of this I will soon have to look for work and my husbands DSP will be reduced and I will be left with nothing to live on .

Hi Trev Mc,
We are all sympathetic to your situation. The aged care journey is complex, frustrating and often emotionally draining.I dont think that we can add much more to Sally Isles very thorough comments above. I also concur with Sally regarding the importance of getting specialised aged care financial advice. Agedcare101 are not legally able to give financial advice but we are happy to recommend Affinity Aged Care Financial Services and Sydney Aged Care Financial Advisors. Both have national offices and can be very helpful.
The agedcare101 team

Hi all I am in a difficult situation like this too. If we ‘Separate’ then is the house still a protected asset and can I still be his guardia

I have only discovered this site today, I had thought that I was alone with this nightmare, good to know I am not. Obviously, from the comments above, a decent Aged care financial adviser is paramount to surviving the madness. My wife, now 62,has Fronto Temporal Dementia, she is in her 17th year with the disease. I looked after her (alone) until her admission into care in Feb 2017. At the time I was not much better than her, in that my mental health was in tatters. Some good friends and a psychologist have helped. At the time I said dealing with the trauma was the hardest thing I have ever done, dealing with Centrelink is the second hardest. I have in the last 12 months done something stupid, I have sold the last house (mid north coast NSW ) we lived in together and gone back to work. Dumb. Centrelink are deeming me on the proceeds of the house sale, I can not buy another in Sydney for my meagre amount, but thats where I could find a job. Added to that my wage is ripping my wifes Diability Support Pension to pieces. I work 2 to 3 days a week just to pay her nursing home fees. I asked Centrelink about the Living Seperatly and Apart, they said that I was on the best “plan” ( living apart from illness), I could pay her RAD, but there is a clause which says, I shoud have paid that in 6 months of her going into care. I didnt have the money then, even so, where do I live? I did actually see a financial adviser, he suggested I retire, head back to the North coast and forget about everything! I am 60 and dont know what to do…

If the “separation” path is taken, what is likely to happen after 2 years, when the family home is thrown back into the mix as it seems it must. Always assuming he stays with us for that long. And who can guess how long that piece of string is? Do you have to separate bank accounts etc?“separation” form looks so clinical, I cringed when I saw it. It is like the Electoral Commison form that ask"object" to his being on the electoral roll. I don’t object to that, he is just not in a position to vote. (symantics!) It really cheeses me off that the whole thing has to be so complicated. Dementia is never going to reverse. And the emotional toll is unbelievable. No wonder they say that it is not the person with Dementia that is likely to"well off" just comfortable. And I am only working part time, so not raking it in as they say. It seems that the middle of the road people are those getting it in the neck. You have just a tiny bit too much money/assets, and no where near enough, so where to next? I really need to investigate further. .Finance advisor, here I come (again). Human Services , here I go ringing again with another question

Hi Sally,
Thank you so much for your post and the valuable information in it. Knowing about the MOD-S form and section 2.2.5"Determining Living Separately and Apart" is definitely something we will remember here.
Again thanks for taking the time to update us with your experience. We’re sure we are not the only ones that found it very helpful. And you couldnt be more right about seeking assistance from an Aged Care Financial Advisor. We couldnt recommend that

Hi to all have posted comments about this situation of a spouse with dementia in residential care and where the other one still needs to work.I’ve already posted on this topic and would like to add some more information. As someone who has been able to navigate this incredibly complex situation and get t"positive" outcome, I would say again that it’s really important to find a good financial advisor who specialises in aged care - this kind of expertise is invaluable. If you live in Brisbane, I can highly recommend Scott Quinlan of Solace Financial who has been tremendously helpful in structuring our finances so that (1) my husband can get the aged pension and therefore qualify for a subsidised bed in a very nice nursing home; (2) find the legislation that is not well known by many Centrelink staff that allows me to work without my income impacting on my husband’s pension and his subsidised bed; and (3) is happy to discuss my many anxieties about finance related matters. In our case, I was my husband’s full-time carer for several months before he had to enter residential care due to increasing mobility issues (we think he also has MND). There are two different payments you can receive as a carer: one is a fortnightly allowance that is not means tested (approx $125 per FN) a"carer’s payment" which is equivalent to the aged care pension and is means tested. If you are a carer receiving the carer’s paymentat the time your spouse enters residential care, the carer’s payment (equivalent to the pension) continues for a further 14 weeks (7 fortnights). I found this invaluable in terms of settling my husband in to the facility without the urgency of returning to work (and also using the time to recover from the severe stresses of caring for a spouse with frontotemporal dementia.In terms of the legislation I refer to above, it’s important to note that there is a BIG dif"separated due to illness" and “living separately and apart”.“Living separately and apart” is for people such as myself who need to continue to work to support myself but don’t want this to impact on my spouse’s aged care pension. There are specific criteria outlined in the relevant legislation that must be satisfied “living separately and apart - one member of a couple institutionalised due to a severe and debilitating condition”. Essentially once this is determined by Centrelink, it means assets can be separated for Centrelink purposes so that my income doesn’t impact his pension. The legislation is in the Aged Care Act and is defined in Section 2"Determining Living Separately and Apart". The form that needs to be completed to apply for this is called a MOD-S and can be downloaded from the Centrelink website. I found quite a few Centrelink staff did not know it existed. I think my application was helped by the fact that I had prepared every document meticulously, I had comprehensive supporting medical evidence, bank statements, as well as a letter from a long term friend attesting to his observations of our marriage (one co"the institutionalised partner is totally and permanently incapable of providing their partner with such things as companionship, comfort, physical, intellectual or emotional support". This is all true in our case. There is a special division in Centrelink that deals with these applications. Keep asking for it until you get through. I too had many hours of waiting on the phone. In the end, despite being told it would take several weeks to be approved, I received a phone call two hours after my visit to a very sympathetic Centrelink consultant that it was provisionally approved and I could start to look for work. This was an immense relief.The thing about this legislation is that you don’t need to divorce, and it doesn’t preclude you from visiting your spouse, supporting them, and most importantly continuing to love them. It did take me a while to get my"separation" but it really is “separation of assets”, and I had no other choice as I have to work. Sorry for the long post, but I hope this helps someone out there in a similar situation. Of course, I would also say that everyone’s situation is unique and my situation may not necessarily reflect others. That’s why a good financial planner with experience in aged careis

HI Jaybee. Maybe this link to Social Security law page regarding separation by illness and living separately and apart may help. I 'm not sure it is helping me just yet though. So complicated!


Hi Jaybee. It has been suggested to me that maybe I need to think about divorcing my husband (although I think that would create another whole new headache when considering assets and the family home) and lets face it, we’ve been married for 44 years, so I think that is not an option. It was also suggested that I stash most of my available cash into superannuation and then cry poor by claiming financial hardship. That is no solution in my book. I would be happy if they just did the 50/50 thing and let me be. Complaints to the Aged Care Commissioner have been stymied by Human Services saying their calculation is correct, when they clearly have made errors, and the answer I got did not answer the question I asked. I try not to go to the doctor for a blood pressure check just after I have been on the phone to Human Services for a couple of hours!! The actual people aree nice enough, but the information seems to be inconsistent.It is no circus that’s for sure. Or maybe it is a to tell us that we are the main attraction. I think My cynicism is showing!

G’Day - I’m new to this site and find it most interesting. I’m still reeling from a two hour session with Centrelink who messed up our income and asset assessment! Do I understand from Tracy & Cook’s posts that there are two different situations - one, ‘separation’ as per 'we are separated & don’t share etc., etc. and ‘separated due to illness’. It sound to me like two different scenarios. Can anyone shed light. I have had much conflicting advice from the three different Gov. departments re my husband’s dementia and the relevant hoops to be jumped through to initiate transition from ACAT assessment for Respite Care (never taken) to permanent residential care. We are both old enough for the aged pension but I still work seven to eight hours a week & this causes all sorts of problems. Would it be best if I divorced him? Would that solve our financial problems for permanent aged care? Help!Jaybee

I too am in the same boat as you Sally and Tracey. My husband is on a pension, and we are regarded a"couple separated by illness". What I earn affects his pension though and if I work extra hours, his pension bounces around like a cork on the ocean. I work and am required to pay a means tested fee on top of all the other fees. Human services regards my husbands pay as his and my pay etc as ours, so although they say in the literature that income is split 50/50, they actually regard pension income differently from other income. This is extremely frustrating, and all I can say is keep a close eye on Centrelink letters, as I have had many frustrating errors (that they admit) which continue after only 18 months of trying to sort it out. Good luck and keep your ch

Thank you for your help - and Sally for letting me know that there is hope! I will pass this on to my mum.

Hi Sally,
Thanks for chiming in. Your situation is very helpful and it is great to see another person being able to talk about their real experiences especially when it is such useful information.
thanks again,
The Agedcare101 team

TracyB. I am in exactly the same situation as your Mum and stepdad. My husband has early onset dementia and is now in a residential facility. I have also had to go back to work to support myself. We had a brilliant financial planner who structured things really well. Its a complex process and everyones situation is different. In our case, my husband was able to get the pension and a subsidised bed in a very good facility. In order to go back to work and not have my husbands pension affected, I had to apply for a separation for Centrelink purposes. It was hard to get my head around this but its just a separation of assets and there is legislation that allows Centrelink to do this if one of the people has a terminal illness such as dementia, is in a residential facility and is unable to perform the functions that could reasonably be expected of a partner, eg physical, emotional, financial support. . My advice is to seek out a good finting the aged care system. Its really complex but worth persevering. Some Centrelink staff will say theyve never heard of it but persevere! Its worth it. my husband is still my husband and always will be but I can now work and know that he is protected and safe. I

Hi there,
Your mum’s situation is complex and as you’ve mentioned one of the key challenges is that you’re mum and step dad are still relatively young. The first thing we would recommend is to put a call into the My Aged Care special section that looks after Finances - Income and Assets. If you want, you can say you’re a child and are just fact gathering on behalf of your parent’s (rather than creating an account with My Aged Care and logging the call officially). If the My Aged Care Financial division confirm what you understood from Centrelink then next I would recommend speaking with a Financial Advisor who specialises in Aged Care. They will look at all your parent’s assets and financial details etc and often see case specific suggestions that can help your mum’s position.
We hope this helps