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6 December, 2019

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  1. Aged Care Accommodation
  2. Treatment of the Family Home

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 impact on the Age pension and Aged care residential costs 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 is considered a "homeowner" if they have 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, 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 EEA is the difference between the single homeowner and single non-homeowner thresholds, and as at 20 September 2018 stands at $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.

A flowchart describing how the family home is treated for pension and aged care purposes
An Overview - How the Family Home is assessed for pension and aged care purposes

Professional Advice Inquiry

IMPORTANT: The material contained within this website and other associated communications is only intended as general, background information and it is not intended to be relied upon. No warranty is provided in relation to any material or to the services that may be contracted through SimplyRetirement.com.au or related entities. It is strongly recommended that individuals seek the advice of qualified professionals before taking any action.



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