Aged Care Asset Assessment Home Exemption

Aged Care Asset Assessment Home Exemption

 
by Christine Hopper

Multi-generational households often ask if the Aged Care Asset Assessment has a home exemption.
Families may be aware that the amount of Accommodation Bond, or Accommodation Charge, required of a permanent resident of Commonwealth regulated aged care facility depends on the amount of the new resident’s assessed assets. The former home of the aged care entrant is often her major asset.

But what if former home of the aged care entrant is also the home of a family member. Maybe a son with a significant intellectual disability had never become independent enough to move out from the family home. A daughter might have come back to live with her widowed mother as housekeeper and full-time carer.
The family might ask, “Do we have to sell the home if the home owner becomes a permanent resident of Commonwealth regulated aged care facility?”

Aged Care Asset Assessment Home Exemption for a spouse

If the spouse, and/or a dependent child, of the aged care entrant resides in the former home of the aged care entrant then the home does not count for the Aged Care Asset Assessment. The Aged Care Asset Assessment Home Exemption applies for a spouse, and/or a dependent child, living in the home even if the aged care entrant is the sole owner of the home.

But remember that if both members of a couple are seeking entry to permanent residential aged care at the same time then the Aged Care Asset Assessment Home Exemption for a spouse would not apply. If one member of the couple stayed at home with ‘in home care’ until the first member of the couple were settled into permanent residential aged care then the Aged Care Asset Assessment Home Exemption could apply for the first entrant.

Hint: When both members of a couple need permanent residential aged care then the family could consider a staged application process to obtain the Aged Care Asset Assessment Home Exemption for the first member to enter.

Aged Care Asset Assessment Home Exemption for a Carer

An adult who had lived in the home of an aged care resident as her carer for at least two years prior to her applying for residential aged care could consider the Aged Care Asset Assessment Home Exemption for a carer.
To claim the Aged Care Asset Assessment Home Exemption as a carer, the carer needs to establish firstly that throughout preceding two years she was a full-time carer for the homeowner and that she lived with the aged care entrant/homeowner throughout this period.
The second test is that the carer would be eligible for a Centrelink, or DVA, Income Support payment once the homeowner enters residential aged care and thus the carer role ceases.
The first condition could be satisfied by your Centrelink record of having claimed a Carer Payment and/or Carer Allowance from Centrelink and had your address as the same as that of the homeowner for at least the previous two years. Read more about Carer Payment and Carer Allowance.
Receipt of a Carer Allowance from Centrelink would demonstrate that you had been providing full-time care to the homeowner. Having the homeowner’s residence as your permanent address for Centrelink and the Electoral Roll could demonstrate that you lived there long term. If you really lived with the homeowner then the address on your Driver’s Licence would also be that of the homeowner.

The second condition relates to your financial position when the carer relationship has ceased because the person you cared for has entered permanent residential aged care. This test is satisfied if the former carer is eligible for an Age Pension or DSP from Centrelink or a Service Pension or an Income Support Supplement attaching to another regular benefit payment from DVA.
A former carer who is active in the workforce or receiving Newstart payments whilst looking for work, is unlikely to satisfy the second test for the Aged Care Asset Assessment Home Exemption for a carer. But Centrelink might accept a former carer on Newstart who is close to attaining her Age Pension Age and has little prospect of obtaining work in the intervening period.

Aged Care Asset Assessment Home Exemption for a close relation, family member

An adult who had lived in the home of an aged care resident for at least five years prior to her applying for residential aged care could consider the Aged Care Asset Assessment Home Exemption for a close relation, family member.
To claim the Aged Care Asset Assessment Home Exemption as a close relation, family member, you must first demonstrate that you are a close relation, family member. Secondly, you need to establish that you lived with the aged care entrant/homeowner throughout the preceding five years period. The third test is that you are eligible for a DVA or Centrelink Income Support payment.

For the first test you need to demonstrate that you are an eligible “close relation” or family member. For the purposes of the Aged Care Asset Assessment Home Exemption for a close relation, family member, the “close relations” of the homeowner/aged care entrant include her parents, brothers, sisters, siblings, children and grandchildren. Centrelink might accept other relationships in special circumstances.

The second conditions could be satisfied by your Centrelink/DVA record of having claimed an Income Support benefit from Centrelink or DVA and had your address as the same as that of the homeowner for at least the previous five years. Having the homeowner’s residence as your permanent address for Centrelink and/or DVA, and the Electoral Roll could demonstrate that you lived there long term. If you really lived with the homeowner then the address on your Driver’s Licence would also be that of the homeowner.

The third condition relates to your financial position when the homeowner has entered permanent residential aged care. This test is satisfied if you are eligible for an Age Pension or DSP from Centrelink or a Service Pension or an Income Support Supplement attaching to another regular benefit payment from DVA.
A daughter who is active in the workforce and yet to attain her Age Pension Age is unlikely to satisfy the Income Support test for Age Care Asset Assessment Home Exemption for a close relation, family member. Self-funded retirees who receive no Age Pension would also be disqualified by this test. Read about Age Pension Age and options for Early Retirement.

In the case of a frail or disabled person living with the homeowner/aged care entrant, achievement of the Age Care Asset Assessment Home Exemption for a close relation might reduce the Accommodation costs of the aged care entrant. But the extended family might not be able to provide the level of care and companionship required for an adult with significant disabilities to continue living in the home.

When the Aged Care Asset Assessment Home Exemption does not apply

Remember that the Aged Care Asset Assessment Home Exemption is about the Asset Value for determining residential aged care costs.  An aged care entrant is not compelled to sell her former home but the aged care fees do need to be paid each month.

The family could choose to rent the former home to a family member or former carer rather than sell it. The aged care fees do need to be paid each month so the ongoing occupant of the home could need to pay some rent.  However there is a risk that the rent required to cover the regular aged care fees could be more than the ongoing occupant of the home could reasonably be asked to pay.

Help with the Aged Care Asset Assessment form

Christine Hopper at Financial Care Services assists clients review their asset position including the potential for claiming the Age Care Asset Assessment Home Exemption and eligibility for a Supported Resident place.

Christine could help you consider how much rent could be required from the ongoing occupant of the aged care entrant’s home that did not qualify for the Aged Care Asset Assessment Home Exemption.

Christine does provide assistance with completing the “Permanent Residential Aged Care Request for an Asset Assessment” form for clients who have difficulty writing answers.

Financial Care Services offers independent professional financial advice to aged care residents and their families. Financial Care Services is owned and operated by Christine Hopper and has no links to any aged care operators or other service providers.

If you would like further confidential, independent and professional advice about aged care entry, Centrelink, lifestyle or financial issues please contact Christine Hopper (03) 9808 0338.

Disclaimer: The information contained in this website is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations. © 2014 Financial Care Services Pty Ltd. All rights reserved.
To make an appointment for professional advice, call Financial Care Services
(03) 9808 0338