This can benefit people who:
- have sufficient funds to pay lump sum accommodation payment without selling former home
- have a former home that has a high market value
- want to retain their former home
- have sufficient income to meet aged care expenses without renting former home
- have a short life expectancy
- have moved into aged care within previous two years (asset value of home exempt for social security purposes)
- Retaining former home may assist with maintaining social security/DVA entitlements as asset value exempt for two years after permanently entering aged care (assessed as homeowner)
- Retaining former home may assist in reducing aged care fees as capped value of former home6 is assessable (unless occupied by protected person or qualified for exemption)
Things to be aware of:
- Two years after permanently entering aged care, market value of former home assessable for social security (assessed as a non-homeowner) unless occupied by spouse. This may reduce or cancel age pension
- Persons may not have sufficient cashflow to meet aged care expenses if they do no rent out former home
- Ongoing costs e.g., insurance, council rates, water rates, repair costs, land tax (if applicable) etc.
- Check with insurance company as to whether general insurance on former home is impacted by leaving home vacant
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Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.