Selling family home

My mother is suffering with Dementia and will require full time residential care in the near future.
Q: I am my mothers primary carer and live in the family home, will we have to sell the family home in order to fund my mothers residential care?
My mother is recieving full aged pension fortnightly and has no other income or assets
Thanks in advance for advice on this subject

Hi isaidpet
According to the government’s Centrelink website “protected person” is defined as follows: your partner or dependent child your carer who is eligible to receive an Australian Government income support payment and who has lived in your home with you for the past 2 years your close relative who is eligible to receive an Australian Government income support payment and who has lived in your home with you for the past 5 years. If your home is occupied by a protected person, it may not be counted as an asset for aged care purposes. This exemption may be lost if the protected person who has been living in the home, moves out of the home.

Hi there to all… reading through all the posts if appears a ‘protected person’ is somewhat of a very grey area of the law insofar as agecare homes. From what I can understand so far is no matter if you are or if you are not you will loose your human rights to stay in the home and get help… agecare hospital and agecare homes are like vultures and have the law all tailored to their own profit needs. It is the weak elder persons, the vunerable that are financially set upon and striped of all their rights… shocker.

Hi Mick,
Yes you are correct. There is no rule that says the family home must be sold when the resident moves into aged care. However unless a “protected person” remains living in the home , the value of the home will be included in the Income and Assets assessment by Department Human Services. If you choose to keep the home it’s value is capped ( currently it is $169,079.20 as of 20 September 2019) for the purpose of the Income and Assets assessment for aged care fees and is indexed with the single rate of the Age Pension every March and September. Also it will be exempt from the Age Pension assets test for 2 years from the date the home owner moves into care. If you choose to sell the family home the full value of the home will be assessed. Depending on a persons’ financial circumstances selling the family home may impact on the means tested care fee and potentially the age pension the resident receives. If you choose to of the Age pension but assessable for the age care means tested fee. There are annual and lifetime caps on the means tested care fee for people who entered residential aged care after 1 July 2014. The maximum means tested fee an aged care home can ask you to pay each year is $27,754.52 which is capped on 20 March and 20 September each year. The maximum means tested care fees you may be asked to pay in your lifetime is $66,610.90 (also indexed March and September each year).Agedcare101 is not qualified to give financial advice. Because everyone’s circumstances are different and aged care finances are not straight forward (eg the implications of renting, not renting or selling the family home on the pension and aged care fees) we always strongly suggest you seek advice from specialist aged care financial advisers.

Hi Aged Care 101 and Asca88,Following on from last two posts, can I confirm the family home can be retained (in this case by myself son) by a family member residing in it even if not eligible for a protected person, and for longer than 2 years if not wanting or needing to sell? I have been advised by DHS that now that my Mother is going into aged care facility along with my father that their family home now becomes a means tested asset capped at $169K each for next two years effective immediately once she is in full care? I sold my own place and gave up work to care for them and support myself off my capital as not eligible for any centrelink support nor protected person even thou I’ve been here for over 5 years. I also leant the deposit for her RAD which they say contributes to their assets even with a signed letter of contract and bank transfer details? My concern is even thou their fees slightly outweigh their small joint income of some super and little aged pension, I am better to assist rather than be forced to sell up and place into their account as according to the online fees calculator, their daily fees would jump an extra $30:00 and their small pension may potentially decrease or cancel thus swallowing up their capital until they decease? It seems logical to retain their home at least for next two years? I believe the loan of $340K should also reduce their asset means tested daily fees?
Thank you, Mick.

Hi Asca88,Thanks for your question. The two bits of information are almost correct but I think you have confused them a little and the good news is that the correction works in your favour.If the family home is retained whilst the owner is in permanent care, then the home is exempted from the Income and Assets test for 2 years. It is the Income and Assets test that determines the means-tested fee that is paid. (I think this is where you got the 2 years part confused.)Once the house owner has been in permanent care for more than 2 years then the home is included in the income and assets test, determining the means-tested fee. At this point, the home is capped at a fixed rate of $168,351.20. Under the current legislation, there is no time frame of when that capped fee is lifted - so good news there.We hope this has helped

Hello Jill, folowing on from the above post: - assuming that the previous family home is retained whilst the owner is in permanent care; Is there a time limit after which point the capped assessed vlaue of$168,351.20 reverts to the actual value of the home? I have been told that the value of the home is only capped at that figure by the DSS for a period of two years

Hi Ivy,
We cannot give definitive financial advice but from what you have said our understanding is as follows: What you decide to do about the family home will firstly depend on whether you are considered a "protected person ". The definition of which is "if you are a close relative who is eligible to receive an Australian Government income support payment and have been living in the family home for the past 5 years. You will also be considered a Protected Person if you are a carer who is eligible to receive an Australian Government income support payment and have been living in your family home for the past 2 years. It is my belief that receiving this Government Income Support Payment is key. You must continue to be in receipt of a Centrelink or DVA income support payment to qualify as a Protected Person. If you are a protected person the family home will be exempt for as long as you live there from inclusion in your mother’s income and assets assessment for the purposes of aged care fees. However once you move out but still keep the home it’s assessed value will be capped at $168,351.20. If you sell the family home the whole value will be assessed. If you are a protected person and your mother has no other assets apart from the family belief that she will probably only be required to pay the basic daily fee which is currently $51.21 which is 85% of the single rate for aged pension. For better clarification for your mothers individual situation I would suggest you speak with the Income and Assets division of Department Human Services on 1800 227