Aged Care and the Family Home: Navigating Financial Decisions with Acton Wealth
When a family member transitions into aged care, one of the most significant decisions involves the family home. This choice carries emotional, lifestyle, and financial considerations. At Acton Wealth, we aim to simplify these decisions by offering tailored advice that helps families navigate the complexities of aged care financial planning.
Understanding the Impact of the Family Home
The treatment of the family home varies depending on aged care and social security rules. Key factors to consider include:
Social Security Assessments: The family home's status as an asset can affect entitlements such as the age pension. Aged Care Fees: The home's value influences accommodation fees and the Means Tested Care Fee MTCF. Future Changes: Assessment of the home may change if it is sold, rented, or vacated by a spouse or protected person.
Options for Managing the Family Home
Deciding what to do with the family home requires careful evaluation of current and future needs. Common options include:
Retaining the Home: The home may remain exempt for social security purposes if a spouse or protected person continues to live there. For aged care purposes, the home may be exempt for up to two years if unoccupied or indefinitely if rented under specific conditions. Selling the Home: Proceeds can be used to fund accommodation deposits RADRAC or other expenses. Social security rules allow a 12month exemption for proceeds intended to purchase another home. Capital Gains Tax CGT may apply if the home was rented or used as an investment property. Renting the Home: Rental income may help cover daily fees or other aged care costs. For certain residents, rental income and asset value may be exempt from means testing under preexisting arrangements.
Key Financial Implications
Aged Care Fees: The accommodation fee can be paid as a lump sum, daily payment, or a combination. The former home's value affects the maximum accommodation fee unless a protected person resides there. The Means Tested Care Fee is determined by assessing income and assets, including the capped value of the home when unoccupied. Social Security Entitlements: The family home is generally exempt for two years after a single person enters care. Indefinite exemptions may apply for certain preexisting residents. Estate Planning: Changes to home ownership or use may affect estate distribution. Clear documentation and updated wills are essential.
Advice for Managing Cash Flow
A well-considered strategy ensures families can manage aged care fees and other expenses without unnecessary stress. For example:
Structured Payments: Evaluate whether to pay accommodation fees as a lump sum, daily payment, or combination. Cash Flow Planning: Renting or selling the home may provide liquidity to meet ongoing costs. Tax Optimisation: Understanding CGT and rental income implications can prevent unexpected liabilities.
Why Choose Acton Wealth
Navigating the financial and emotional complexities of aged care is challenging. At Acton Wealth, we provide expert guidance on managing the family home and other assets. With our comprehensive aged care financial advice, we help you make informed decisions that support your loved one's care and your family's financial security.
Aged Care Financial Advice
Approaching this stage in your life should feel positive, secure, and wellsupported. With Acton Wealth's experienced aged care financial planners, your transition can be smooth, personalised, and stressfree. Our deep knowledge ensures you receive the best, unbiased financial advice for your future. It all starts with a simple phone call.
What Is Your Aged Care Funding Strategy
There are strict regulations governing aged care fees. Aimed at consumer protection, a degree of flexibility within the guidelines enables aged care facilities to adapt the fee structures to meet their financial pressures. So as we age, and as we begin to consider the future care of not only ourselves but our older loved ones, what can we expect to pay
Contact us today to learn how we can assist you in planning for aged care with confidence.
