Good morning ladies,
I have a query regarding the below info from your site;
Renting out your home
"If you choose to rent your home to cover the periodic payments in an aged care home (nursing home), the family home and rental income will be exempt from the Age Pension Income Test during this time.
However, the rental income is counted for the Combined Income and Assets Test used for means-tested daily care fees at the aged care home.
Your home is exempt from the assets used to calculate pension entitlements for two years from the date you or your partner move out. This is to enable a move back home if you?re able to do so.
You may also keep and rent your home with a number of exemptions applying to the asset income (rent). "
As of January 2018, the above does not seem to be the case anymore? After meeting with FIS yesterday, I was told that renting out my mothers home in order to fund her fees would reduce her pension, therefore, the reality is that we’d struggle to pay the total of the combined daily Accommodation Fee and the RAD as a daily periodic fee.
I do believe my mothers home is exempt from the “assets test” for a period of two years if she rents it out. But I struggle to understand what this means in any type of monetary value and how this can actually help her situation if her pension is reduced so substantially. It no longer seems to be an option to self-fund aged care via rental of the family home without pension reduction? It is tough because we were kind of hoping the health of my mother would improve in time (she has unusual health complications). But immediately selling the home and paying a lump RAD payment seems to be the only viablefinancial option to have some kind of reasonable cash flow happening. With the housing market potentially slowing/dropping; I do not see a reverse mortgage as a sensible/viable option. After chatting with FIS and reading the above, am I missing something?
Many Thanks and Best
Rachael
Thanks aged care team for your reply, I appreciate your time. The RAD deposit will ease her asset holdings somewhat which is exempt from assets testing. As will the costs involved with selling and a small remaining morgage. I’m reluctant to chat with a financial officer as I feel i’ve done the majority of the ground work and research already. I agree these a huge decisions however it also seem unfair that it’s necessary to pay a $1k for knowledge that should be easily available to every pensioner/ aged Australian. I appreciate the help your wonderful site has provided
Hi Rachael,
Thanks for taking the time to let us know the above. That actually does ring true and we will update the content on the website accordingly. In regard to your mothers situation, my first thought with your suggestion of selling the family home is that would mean your mother would have more assets which would mean her Income and Assets Means Tested Fee would be increased. If she is on the pension now, she may not qualify for it after the sale of her house. I agree that a Reverse Mortgage may not be the best option with the cooling off of the housing market. I know it may seem expensive to pay a specialist, but I would really strongly seek the advice of an Aged Care Financial Advisor. The detail of what they know is incredible. They can also tailor the information to your mothers financial situation so that the best financial decision can be made. These are big big decisions so having professional advice is a good idea.