Aged care and the Age Pension

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.

Related articles:
How upsizing affects the pension
Reason for two-year residence rule
Is it too late to start a super fund?

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.

Written by Ben

RELATED LINKS

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.



SPONSORED LINKS

LOADING MORE ARTICLE...