The OMG letter and the family home

Hello,

Firstly, thank you for your informative and invaluable website. Earlier this year my 86 year old mother moved into a nursing home and her home was not included in her assessment as my sibling had lived with her for the past 5 years and had been receiving the carer’s payment. We have been advised by a Financial Advisor that Centrelink will stop her aged pension after two years as her home will be assessed as an asset. She is currently paying the basic daily fee for her accommodation. While Centrelink will stop her aged pension when the two year’s is up do you have any idea how much her aged care costs will be. Will they be more than the basic daily fee? Her home is worth $850k.

Kind Regards,
Dan

Hi Dan,Yes the family home is exempt from the Age Pension assets test for 2 years from the date your mother moved into residential aged care. Once this period is up your mother will be treated as a non home owner and the house will become assessable which can have an impact on her age pension and means tested care fee.If you mother decides to keep the family home its value will be capped at $169,079.20 (as at 20 September 2019) for the purposes of the Income and Assets test for aged care fees. If she chooses to sell it the full value of the home will be included in her Income and Assets assessment. If your mother decides to rent out the home the rent will also be assessed for the aged care means test. If the Department Human Services (DHS) assesses your mother as being able to afford to contribute towards her accommodation then the accommodation fee (either a RAD, DAP or combination of both) will be additional to the basic daily fee which she is currently paying. We have a fee estimator (see link below) which will give you some idea of what fees your mother may have to pay. However it is only a very approximate value which is why we always strongly recommend that people seek help from a specialist aged care financial adviser. Aged Care finance is not straight forward (eg whether to sell or keep the family home, whether to rent it out etc) and every person’s financial circumstances is different. You can also call DHS Income and Assets division on 1800 227 475 to discuss. Aged Care Fee Estimator | agedcare101