Treatment of the Family Home

How is the Family Home assessed for an Individual entering Aged Residential Care?

This is quite a complex question, and the answer in terms of both the Age pension and Aged care fees can depend on when an individual entered aged care. Asset and income tests apply in both areas, but differ slightly in terms of their treatment of the family home.

Note in this context that an individual is considered a "homeowner" if they or their partner have:

• a right or interest in their principal home, and
• the right of interest gives them reasonable security of tenure in the home.

Consequently, the notion of the "family home" can extend beyond a standalone property or unit/apartment to include granny flats and retirement village units. In the case of special residences, such as a retirement village unit, a pensioner is considered a homeowner if the lump sum amount they paid for their home, known as the entry contribution (EC), is greater than the "extra allowable amount" (EAA) at the time of payment. The EAA is the difference between the single homeowner and single non-homeowner thresholds, and as at 1 July 2019 was $207,000.

This area can be complex, depending upon an individual's circumstances, and we very much recommend professional advice. To provide you with an overview however, we have provided a flowchart below detailing how an individual's family home will generally be treated in terms of the income and assets tests applying in relation to both the Age pension and Aged care.

An Overview - How the Family Home is assessed for pension and aged care purposes