The critical issue in aged care: Do I have to sell the family home?

At AgedCare101, there’s a question that we are asked more than any other: "Do we have to sell our family home to enter aged care?"

The second most-asked question is: “Will the family home be counted in the means test for aged care?”

We asked financial adviser Shaun Ganguly to break down these misconceptions.

The Misconception: Age Pension versus Aged Care

Many people believe that the exemption of the family home's value for Age Pension purposes will carry over into aged care means testing. In the eyes of Centrelink, whether you live in a humble cottage or a $15 million mansion in Sydney's eastern suburbs, your home's value doesn't impact your Age Pension.

However, aged care is an entirely different ball game.

The Reality: Aged Care Means Testing

For aged care, the family home is usually assessed at its “capped value” which is around $197,735.20 as of October 2023. While aged care facilities cannot force you to sell your home, maintaining two sets of living costs can be a tall order.

The Cost Factor: Two Sets of Bills

Imagine you move out of your home and into a hotel; you’re now responsible for two sets of utilities, food, and more. The same applies to aged care; it’s like maintaining a second residence.

The facility won’t accept bricks as payment, so you must find another way to cover these expenses.

The Alternatives: Not All Roads Lead to Selling Your Home

There are investment options specifically designed for aged care that can significantly improve your financial standing.

Strategic Estate Planning

Advanced planning can reduce aged care costs and protect other aspects of your estate.

The Emotional Factor: Beyond Bricks and Mortar

While the emotional attachment to a family home is understandable, the reality is that few families maintain these homes as a shared asset for more than a year after their parents pass away.

Conclusion: Your Home, Your Choices, Your Future

In summary, the aged care facility won’t force you to sell your home. However, unless you have other means to pay for ongoing costs, selling might be the most practical option. But don’t fret; various strategic options can make the transition easier, offering not just peace of mind but also financial stability.

For expert guidance tailored to your unique circumstances, feel free to reach out to Aged Care Financial Planning. Remember, the choice is yours to make, but understanding your options can make all the difference.

[email protected] – 1300 000 243

The information provided in this article is for general informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor for personalized guidance tailored to your specific circumstances before making any financial decisions.