My husband and I own our own home. We are ex public servants and he has a PS pension which is twice mine, but I also have a lump sum (300K) that is invested (currently in cash so not much return).
We have just gone through the process of getting my mother in law into permanent care. She owns a house with her son-in-law (unrealisable asset) and gets full aged pension and gets hardship consideration so the govt pays for her total accommodation payment and her daily care fee is covered by her pension. The accommodation payment for her to get into care would be 740K for the bond.
This has made me wonder what would happen if, say my husband (or me) had to go into care. We don’t qualify for the aged pension because of our income from our PS pensions. His is around 70k a year and mine is around 30k a year.
If, say, he was to have to go into care, would I have to sell our house to cover the 740k bond? and then would all of his PS pension go towards his fees?
I worry about this because we live in a large house which we don’t want to sell but my 30k a year would not cover the expenses on it. I realise that compared to most we are very well off, but just wonder how this is viewed by the government.
Hi kbjerra, The fees you pay for residential aged care will be calculated by the Department Human Services based on your Income and Assets assessment. You can see what is included in this assessment at this link:What do I need for the income and assets test? | agedcare101. If a spouse remains living in the family home when their partner enters aged care the spouse will be considered a “protected person” which means that the value of the family home will not be included in your Income and Assets assessment. If both of you enter residential aged care together or there is no one living in the family home then the decision has to be made as to whether you sell or keep the home. Some people decide to sell the family home and pay the Refundable Accommodation Payment (RAD) in full or if the RAD is relatively small and you have a reasonable amount of savings or can pay a good part of the RAD, then keeping the home may work better for you. Others may choose to rent out the family home and put the rental payments towards an accommodation fee . Others use other assets to pay towards the RAD. Some use part RAD and part DAP (Daily accommodation payment - which is like paying rent).A Refundable Accommodation Deposit(RAD) means you are paying for your accommodation in Aged Care as a lump sum. It is Government guaranteed & fully refundable when a person leaves the aged care home. The RAD is not asset based and each aged care home depending on the facility and its services. A RAD is determined by how much a resident is prepared or can afford to pay. If you choose to pay part RAD and DAP then only the RAD part is refundable. The RAD is exempt from the calculation of the pension test but it is assessable for your aged care means tested fees in the aged care home. The sale of the family home may impact on the means tested fees and possibly the age pension which is why some people choose to keep the family home which is assessed at the capped value of $168,351.20 (as at 20March 2019). If you sell the home it is assessed at its full value for the purpose of the assets test. For people entering care after 1 January 2016 who choose to rent out the family home the rent will also be included in the means tested assessment. Everyone’s circumstances are different and the decisions you make about how to pay for your aged care fees can have big implications on your finances which is why we always strongly get specialist aged care financial advice. It can save you time and most importantly, money, and assist you to set up your financial future as best as possible. I hope this helps Regards Jill