If you can't afford a nursing home in Australia, you can apply for Financial Hardship Assistance through Services Australia, which can reduce or cover some costs like the basic daily fee, means-tested care fee, and accommodation, with the government potentially paying some or all fees if eligible, though extra services aren't covered. You must have a My Aged Care assessment, meet asset/gifting limits, and complete specific forms, but options like Support at Home or veterans' support might also apply.
To avoid selling your home for nursing home costs in Australia, you can pay using a Daily Accommodation Payment (DAP) instead of a lump-sum Refundable Accommodation Deposit (RAD), use other assets, borrow against the home (like a reverse mortgage), rent out the home, or apply for financial hardship assistance, all while understanding how the home's exemption (for 2 years) impacts pension assessments.
If you are eligible, the Australian Government will pay some or all of your aged care costs. If you are already in care and receiving financial hardship assistance, you don't need to re-apply for it until the current determination expires.
Financial hardship assistance can help you, if for reasons beyond your control, you can't afford your aged care costs. Each case is assessed on an individual basis. If you are eligible, the Australian Government will pay some, or all, of your contributions, fees and accommodation – helping you to get the care you need.
In Australian aged care, how much you can have in the bank depends on your overall assets, but you can keep a certain amount as an "asset-free threshold" (around $63,000 for a single person), with higher limits ($210,555.20) for your home's value before substantial accommodation fees kick in, and your total assets (including bank, investments, and potentially gifted money) determine your contribution level via means-testing, with amounts above these thresholds reducing your government support or increasing your means-tested care fee.
Here are some effective strategies for protecting your assets if your spouse needs to move into a nursing home in Australia.
You will not be entitled to help with the cost of care from your local council if: you have savings worth more than £23,250 – this is called the upper capital limit, or UCL. you own your own property (this only applies if you're moving into a care home)
It's a myth. Whether you choose to keep or sell the family home when you move into aged care is up to you. Selling the home may be the right decision, but there are a few things you should think about first.
There is help available for older adults who have run out of money, if you know where to look. The government has many programs that help with needs like healthcare, housing, food, and energy bills. Your local community offers hubs of information like libraries, city hall, and the parks district.
Hardship payments are for people facing severe, unforeseen financial distress due to events like domestic violence, natural disasters (floods, fires), loss of income, or release from confinement, requiring them to be on income support (like Centrelink in Australia) and have limited liquid assets, with specific rules for different situations, often involving an urgent need to leave home or establish a new one. Eligibility hinges on demonstrating extreme financial need, being unable to get other help, and proving the hardship stems from circumstances beyond your control, with specific criteria varying by the type of payment.
Complete an ACAT assessment
To apply for an assessment by the Aged Care Assessment Team (ACAT), you must register with My Aged Care by completing an online application form or by calling My Aged Care on 1800 200 422. The ACAT assessment is a face-to-face interview about your current circumstances and care needs.
If you sell the home, its value will count towards the Age Pension assets test. If you rent out the home, its value may count towards the Age Pension assets and income test, depending on when you moved into aged care.
Retirement villages or independent living units are not aged care facilities. They offer a range of services for older people who need less care than offered by aged care homes. They are not regulated or subsidised by the Australian Government, but they are regulated by state and territory governments.
Instead of letting costly nursing home expenses threaten your financial security, explore these options to protect your legacy:
There is no specific dollar limit for tax-free gifts in Australia. Personal gifts such as money given between family and friends are generally tax-free, but gifts involving assets may have tax consequences like CGT. Also, gifting large sums might affect government benefits or require reporting.
The decision will probably be led by whoever is paying for the person's care, for example: The person may be paying for their own care. This means there may not be any health or social care professionals involved in the decision. If this is the case, the person's carer, friends or family should decide.
The $1,000 a month rule for retirement is a simple guideline: save $240,000 for every $1,000 you want in monthly income, based on a 5% annual withdrawal rate ($240,000 x 0.05 = $1,000/month). It's a popular tool for estimating total savings needed, but it doesn't fully account for inflation, healthcare, or taxes, so it serves as a starting point rather than a definitive final number for a personalized plan.
Older individuals who lack financial resources often rely on public assistance and state-run services for long-term care. Medicaid is the most popular way to pay for a nursing home for people who have run out of their own money and have a tight income and asset limits.
The biggest retirement mistake is often failing to plan adequately, which includes underestimating expenses (especially healthcare), ignoring inflation's impact on purchasing power, not starting savings early enough to benefit from compound interest, and leaving retirement savings in the wrong place (like not converting super to a tax-free pension), leading to running out of money or living a constrained lifestyle. A lack of a clear budget, not understanding investment options, and neglecting lifestyle/purpose planning also rank high.
You can rent your mum's house to pay for her care. The home will continue to be owned by your mum. She will continue to be assessed as a homeowner for Centrelink Age Care purposes for the initial 2 years of moving into care and her home value will be exempt from Age Pension assessment.
A meta-analysis using pooled data from 12 data sources on older adults found that limitations in 3 or more activities of daily living (ADL), cognitive impairment, and prior nursing home use were the strongest predictors of admission.
In most cases, the estate should belong to the closest blood relative. This means that a surviving child to the deceased automatically inherits the home.
Some contracts may say that the home will accept council contributions as payment in full if/when the elderly person runs out of money. Others will offer a grace period while residents make other arrangements.
Pensioners might need to pay tax on their interest if it's higher than their personal savings tax allowance. You'll need to declare any interest on your self-assessment tax return if you submit one.
A single homeowner with more than $321,500 in assets will start to see a decrease in their Age Pension payments. If their assets reach $714,500, their Age Pension payments will be reduced to $0. For a non-homeowner couple, the maximum assets cut-off is $1,332,000.