Aged Care, Home Care and Retirement Living

Can We Keep the Family Home When Entering Aged Care?

Explore how aged care fee assessments treat the family home in Australia, including exemption rules, caps, and practical advice for preserving your asset during care transitions.

The Family Home Exemption Rule

• If a protected person (e.g., spouse, dependent child, long-term carer) continues living in the home when you move into care, the property remains exempt from the Means-Tested Care fee assessment.

• If the home is no longer exempt - because no protected person resides there - it becomes an assessable asset, but only up to the home exemption cap. As of mid-2023, this cap is around $193,219, meaning any value above that is not counted.

Age Pension Treatment of the Family Home

• The home might remain exempt from pension asset tests for up to two years after moving into care, even if unoccupied. After that, it may count as an asset.

Do You Have to Sell the Home to Pay for Aged Care?

No, you don’t.

• Aged care providers and the government cannot force you to sell your home to enter care.

• However, with limited other assets available, some may choose to sell to fund ongoing care costs.

Key Considerations for the Family Home

Why This Matters

• Impacts your aged care fees - Not counting the home can significantly reduce your Means-Tested Care Fee.

• Protects your financial security - Keeping the home may preserve your wealth and long-term pension eligibility.

• Reduces emotional stress - Retaining a cherished family asset can ease transition in difficult times.

Expert Tips

1. Clarify who qualifies as a protected person in your circumstance - spouses, long-term dependents, or carers can qualify.

2. Plan ahead - if a protected person may move out, consider the impact on exemption status.

3. Consult financial advisers or Services Australia - they offer free guidance through Aged Care Specialist Officers (ACSOs) and means-testing processes.

4. Weigh home retention vs sale - factor in care costs, estate planning, and emotional value.

FAQs

Q: Can we choose how accommodation costs are funded without selling the home?
Yes - through RAD (Refundable Accommodation Deposit), DAP (Daily Accommodation Payment), or hybrid options. Your home is separate unless required by your financial plan.

Q: What’s the current home exemption cap value?
Approximately $193,219 as of July 2023, indexed separately for each individual.

Q: What happens when the protected person moves out?
The exemption ends, and the home's value becomes assessable (up to the cap).

While the notion of being forced to sell the family home can be distressing, Australia’s aged care rules offer flexibility and protection, especially when a protected person remains in the home. Understanding exemptions, caps, and asset treatment can help you protect your home and finances during the aged care transition.

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Article posted:Jun 14, 2019
Category: Aged care financial planning