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