What happens to your pension when you move into aged care?

Font Size:

George’s mother will move into aged care shortly and he wants to know what will happen to her Age Pension.


Q. George
I have a question regarding retirement homes/aged care homes. I have an elderly mother who may require an aged-care facility soon. She is a single pensioner receiving the full pensioner rate via Centrelink and has the family home valued at $700,000 and assets to the value of $150,000. What happens to her pension if she moves into aged care? How would she finance the aged-care facility? What happens to her residential home and her assets? What would the weekly costs be for the aged care?

A. The weekly costs for aged care will vary depending on the provider. Most people keep getting the same amount of pension after they move into an aged-care home.

Your mother can ask for her pension to go straight to her aged-care provider. This means Centrelink will pay the pension to her residential aged-care home instead of her. The aged-care provider will then take out their fees and transfer the rest of the money to your mother.

Your mother is required to tell Centrelink within 14 days if she moves into residential aged care or if she sells or rents out her home.

Centrelink will not count your mother’s home in the pension assets test for two years. The two years starts from the date she moves out of her home and into residential care.

After two years in care, Centrelink will count her former home as an asset and her pension may be reduced as a result.

If she decides to earn rental income from her former home, the net rental income counts in the pension income test and her pension may be reduced as a result. 

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Join YourLifeChoices today
and get this free eBook!

By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy


Centrelink Q&A: How does upsizing affect the Age Pension?

John wants to sell his home and move to a larger property. How will it affect his pension?

Why is there a residence rule for the Age Pension?

John wants to know why he needs to move back to Australia to claim the Age Pension.

Can you restart a super fund after you have retired?

John has taken all the money out of his super but fears he may have made a mistake.

Written by Ben


Total Comments: 7
  1. 0

    Just to note I am a different George.
    “After two years in care, Centrelink will count her former home as an asset and her pension may be reduced as a result.

    If she decides to earn rental income from her former home, the net rental income counts in the pension income test and her pension may be reduced as a result. “

    I don’t suppose Politicians have to worry about such rules for getting their pensions? Also, this week we heard of Chris Pyne landing a job which uses his knowledge and contacts of the Ministry he managed in Govt – sound like corruption to me. Besides that, hey guess what – he is also ENTITLED to a big fat pension for life unaffected by any Assets, Income or Couple Combined tests. So new job + Pension.
    Time Morrison acted to cancel these rorts – the “quiet Australians” demand it. Politicians MUST be subject to the same tests as all Australians – no exceptions!

  2. 0

    Isn’t income from investment treated differently than income from work? I would like clarification on that. Income from interest earned from cash investment is not treated the same as work income, so how is income from rent treated? In what way is it assessed against the pension? The article should have stated that otherwise you’re still in the dark about that.

  3. 0

    With a house of that value the mother would be expected to fund part of her aged care costs i.e. sell the home It is called an RAD it is100% refundable when she leaves or passes away. The RAD varies from $250000 to $500000+ depending on the facility. Would need to talk to Centre Link & My Aged Care about the rules.

    • 0

      Yes i believe this to be orrect also (facility keep the money as a holding deposit (from house sale) invested & get to keep/use the earnings/interest off the investment, unless the person going to Aged Care facility has a spouse who continues to live in the house (or until circumstances change)! I’m told (by Manager at my dad’s govt care facility) that the amount is refunded on death of the person in care (& possibly the same if circumstances change).

    • 0

      Howver those who have not worked & saved hard all their lives (& are on a pension/don’t own their own home) & need such care still get exactly the same care; is this fair? So i wonder if it would be wise to think ahead & sell the family home 5yrs prior to meeding Aged Care Facility & pass this money on to the kids/grandkids/wherever while still working & not have to forfeit it via deeming rules etc??

  4. 0

    I will never move to age care place I prefer to live on the street and die there …. may way without been punch and shake and/or treated like shit ….. no thanks My Death My way … maybe I die overseas while travelling around ….. Happy and Free and treated with respect



continue reading


Types of polyps and what to do about them

Polyps are clumps of cells that grow inside your body. While most polyps aren't dangerous, some can develop into cancer....


How SMSFs invested in 2020 - and what this means for 2021

The size of the self managed super fund (SMSF) market now represents one-quarter of the Australian superannuation industry and sits...

Technology News

Would you let AI choose your partner?

David Tuffley, Griffith University It could be argued that artificial intelligence (AI) is already the indispensable tool of the 21st...

Food and Recipes

How to spice up hummus

Few things are as universally loved as hummus. A blend of chickpeas, lemon, tahini, garlic, olive oil and cumin, whizzed...


Intensive care during COVID like a 'delirium factory', study finds

An international study of COVID-19 treatments has found patients admitted to intensive care early in the pandemic were treated by...


The surprising health and fitness benefits of golf

Recently, many have had to rely on walking or virtual fitness classes to keep going with their favourite sports and...


Five smart moves for empty nesters

So, the kids have moved out, your home is finally yours again and you have ascended to the rank of...


Why you turn down the radio when you're trying to park your car?

When you're looking for a destination, you might need to cut down the volume. Shutterstock Simon Lilburn, University of Melbourne...