Home sweet home
Historical article – pre-1 November 2025 aged care changes
It is the great Australian dream to own your own home. But how does your home affect your age pension or the aged care fees you can be asked to pay?
Eligibility for an age pension and liability to pay aged care fees, are both impacted by your assets and income. This includes an assessment of where you live and your ownership status.
The Centrelink (or Veterans’ Affairs) assets test starts by identifying you as either a homeowner or a non-homeowner. A higher threshold applies to non-homeowners but homeowners receive an exemption for the home.
Arrangements may be complex and variations may apply for certain situations. In some cases, you may be considered a homeowner even if you don’t own the home – for example under certain rules for aged care and retirement villages.
What is the exempt amount?
If you are classified as a homeowner, the building you live in will be an exempt asset, as well as up to two hectares of land (if that land is held for personal use). Farmers and people on rural properties may receive approval to exempt a greater parcel of land if they meet requirements for the 20-year extended land-use test rule.
What if you move out?
If you move out of your home, the former home usually becomes an investment property and is fully assessable at market value. Some specific exemptions include:
· Move to access care – you may continue to be a homeowner with the home exempt for up to two years
· Temporary move – in other cases, if the move is only temporary, you may be allowed a 12-month continuation of your homeowner status.
If you sell your home, the sale proceeds are assessed depending on how they are used or invested unless you intend to use the sale proceeds to purchase or build a new home. In this case, you can continue to be a homeowner, with a continuing assets test exemption, for the first 12 months. Money used to pay the accommodation costs for residential aged care, is an exempt asset.
Talk to us
Buying a home or moving out of your home are major life decisions and can involve significant amounts of money. Advice from a licenced financial adviser can help to ensure that you make a fully informed decision and understand the impacts on your pension or aged care fees – mistakes in this area can become very costly.
As an Accredited Aged Care ProfessionalTM I have helped many clients to make this choice. I help to find a choice that is affordable, as well as one that works best for the family and protects the value of the estate.
Everyone’s circumstances are different, so it is important to speak to someone like myself who is a licenced financial adviser. I am also an Authorised Representative of Count Financial Limited AFSL 227232.
Call me on 0431 414 799 to discuss how I can help you or a loved one.
