Residential Aged Care: How Does the Family Home Affect Fees?
If you are thinking about finding residential aged care for yourself or a loved one, no doubt you have added concerns right now. We’ve partnered with Alteris Financial Group, specialists in aged care financial advice, to present a three-part series on financing residential aged care. In Part 3, we look at how owning a family home may affect residential aged care fees.
How is the family home assessed as an asset?
For aged care purposes, when a person living alone enters permanent residential aged care the net market value of the family home is assessed up to a capped value of $171,535.20 (as at 1 June 2020). The assessment of the family home is important as it interacts with what other aged care costs a resident may be required to pay. However, there are different treatments of the home to consider.
What if a spouse is still living in the family home?
If one member of the couple goes into permanent residential aged care and their spouse remains at home then the home is not assessable for aged care purposes. This can reduce their aged care costs. In certain circumstances non-assessment of the home could enable the joint homeowner to be admitted as a low means resident. Should the spouse subsequently enter aged care then the capped value of the family home becomes assessable for them both. This can mean an increase in their care and accommodation payments.
What if a carer is living in the family home and receiving an Income Support Payment?
If a carer is living in the resident’s home then the home may be exempt for the aged care purposes. To qualify, the carer must have lived in the home for two years prior to the resident entering care and receive an income support payment (e.g. Newstart allowance, carers payment, disability support pension, Jobseeker).
The carers allowance is not an Income Support payment. The family home continues to be exempt for aged care assessment if the carer remains there and continues to receive an Income Support Payment.
What is a close relative is eligible for an Income Support Payment?
The family home exemption rule can also apply where the resident is living with a close relative. In this situation, they must have lived in the resident’s home for five years prior to the resident entering care. They must be eligible for an income support payment (examples listed above). The relative is usually a sibling, a child or grandchild. They do not need to be in receipt of an income support payment, only eligible.
Other home ownership situations.
Case study: Christine
Christine’s father had to go into permanent aged care. Christine and her father owned their home as tenants in common and she lived there with her family. As her father’s only other asset was $30,000 is a bank account, Christine thought they would have to sell the family home to afford her father’s aged care costs. After seeking advice and discussing the various options, her father’s share of the family home was not assessed. This helped to reduce his aged care costs to only the basic daily care fee. Most importantly, Christine and her family were able to remain in their home.
This information was first published by Alteris Financial Group, who are specialists in the area of aged care financial advice. We have partnered with Alteris Financial Group to provide our clients with financial aged care advice via their Lifestyle and Care team.
If you need financial advice about residential aged care costs for yourself or a loved one, please call us anytime on (02) 8268 2900 for an obligation-free chat.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.