4.4

What do I need for the income and assets test?

The combined income and assets assessment requires you to provide details of your personal financial situation to work out whether you should be able to contribute to the costs of your care and accommodation and, if so, how much.

 

 

 

  • The assessment wants to know:
  • If you are single or part of a couple
  • If you own your own home and who lives in that home
  • Details of all your income 
  • Details of all your financial assets


See below for details about how each of these elements is viewed and assessed by the government.


Single or couple

Each person seeking to move to an aged care home (nursing home) needs to complete their own combined income and assets assessment.

  • If you are part of a couple and both of you are seeking to move to an aged care home (nursing home), you will both need to complete an assessment form.
  • If you are part of a couple but you are the only one moving to an aged care home (nursing home) (the other person is remaining in your home or elsewhere), then only you will need to complete the form.

 

If you are part of a couple, the value of your income and the value of your assets will be assessed as half the combined value of each.

You will be considered to be a member of a couple:

 

 

 

  • If you are legally married or in a relationship registered under a state or territory law (unless you are living separately or permanently apart from the other person*)
  • If you are living in a de facto relationship.
  • Regardless of the gender of each member of the couple.


*For aged care purposes, if you are permanently living apart for health-related reasons, you are still considered to be a member of the couple.

  

If you are a couple it is important to plan the future for both of you before you complete the income and assets test because it commits you both in terms of assets and cash.

Kate Golder, Director,
Affinity Aged Care Financial Services

 

Do you own your home?  Who lives there?

For the combined income and assets assessment, the family home is counted as an asset unless there is someone else living in it, such as: 

 

 

 

  • Your partner
  • A dependent child (children)
  • A close relative who is eligible for an income support payment from the Australian Government and has been living there for at least five years
  • A carer who is eligible for an income support payment from the Australian Government and has been living in the home for at least two years

However, the combined income and assets assessment does NOT include the full value of your home.   See Details of your financial assets below to see how your family home is treated under the combined income and assets assessment.


Details of all your income

For the combined income and assets assessment, your income includes: 

1. Income support payments from the Australian Government 

For example:  

  • the Age Pension 
  • a Service Pension 
  • an Income Support Supplement


2. Deemed* (not actual) income from financial investments


For example:

 

 

 

  • bank, building society and credit union accounts 
  • cash
  • term deposits
  • cheque accounts
  • friendly society bonds
  • managed investments
  • listed shares and securities
  • loans and debentures
  • shares in unlisted public companies
  • gold and other bullion
  • account-based income streams from 1 January 2015.
  • Net income from rental property
  • This refers to the rental income from a property minus the expenses incurred on that property e.g. insurance, maintenance, interest on loans, management fees.
  • War Widow or Widower Pensions and some disability pensions
  • Net income from businesses including sole trading and farms
  • This is the income earned less the costs of earning that income
  • Superannuation income
  • This refers to any income received from all super funds. If you have not withdrawn any amounts from the separation fund, you should record the balance of your superannuation account under ‘financial assets’ (see below).
  • Overseas pensions, and income from income stream products such as annuities and allocated pensions  
  • Family trust distributions or dividends from private company shares
  • This refers to gross income received from private trusts, family trusts and private companies. If you receive an Australian Government income support payment, you already must include the amount of income you receive from family and private trusts and private companies for Centrelink.
  • Deemed* income from excess gifting.
  • The Department of Human Services has rules around gifting your income and assets to family members or others, including limits on allowable amounts.  See the Department of Human Services website at this link for details of the gifting rules


Note: * ‘Deemed’ income refers to a nominal, assumed rate of income earned from bank accounts and other financial investments – as opposed to the actual earnings -  that the Department of Human Services uses when assessing your income.  This means that if you ‘actually’ earn more than the ‘deemed income’, the extra amount is ignored.


Current deeming rates are also provided on the Schedule of Residential Fees and Charges.


Note: On 1 January 2016, there was a change to what is included in your assessed income. If you enter an aged care home (nursing home) on or after 1 January 2016 and you are renting out your former home, the rental income will count in the same way as any other type of income.  Prior to 1 January 2016, this rental income was not included in your assessed income if you paid for some of your care costs by periodic payments such as the rental-type ‘daily accommodation payment’.   Now that rental income is included as assessed income in all instances.  

  

You have to provide full detail of all your financial matters such as all bank balances and account details, credit car numbers and balances, loans and government support such as carers supplement.  The detail will be checked electronically by the government.

Kate Golder, Director,
Affinity Aged Care Financial Services

 Details of all your financial assets

For the combined income and assets assessment, your financial assets include:

Financial investments

 

 

 

  • bank, building society and credit union accounts
  • cash
  • term deposits
  • cheque accounts
  • friendly society bonds
  • managed investments
  • listed shares and securities
  • loans and debentures
  • shares in unlisted public companies
  • gold and other bullion.


Household contents and personal effects

  • These are typically valued at $10,000


Foreign assets

  • Including investments, business interests and real estate


Investment property

  • The value of any real estate, apart from your principal home, is included in your assets test, whether it is wholly or jointly owned by you and your partner, privately or within a business structure.


Special collections of value

  • Such as stamps, art works or antiques


Superannuation balances

  • You must include the value of your superannuation balance if you are over the qualifying age for the age pension but have not drawn an income stream from your superannuation.  
  • Do not include your superannuation assets if you are over the qualifying age for the age pension and have started receiving an income stream. In that case, you need to record the income received in superannuation under your INCOME.  The balance of your superannuation account should be recorded under ‘Other Assets’. 
  • Do not include your superannuation account balance if you are below the qualifying age for the age pension.


Private trusts, family trusts and private companies

  • If you control a private trust or private company, the assets (as well as the income) of that trust or company are included.


Net retirement village entry contributions

  • The amount of entry contribution you pay to live in a retirement village affects whether you are considered to be a home owner and if the amount will be included in your assets assessment.


Refundable accommodation deposits (RADs)

  • Paid for accommodation in an aged care home (nursing home)


Gifts

  • If you have gifted away any assets over the allowable limit of $10,000 in a single financial year or $30,000 over five financial years, they must be included your assets assessment. Include only the amount over these limits.


Your family home

  • For the combined income and assets assessment, the family home is counted as an asset unless there is someone else living in it, such as: 
  • Your partner
  • A dependent child (children)
  • A close relative who is eligible for an income support payment from the Australian Government and has been living there for at least five years
  • A carer who is eligible for an income support payment from the Australian Government and has been living in the home for at least two years

The family home is assessed differently to other assets. See details at 4.5 amount that can be included in the assessment is capped by the government

  

 

The level of detail you must declare includes such items as the value of car trailors and prepaid funeral expenses, with backup documentation.

Kate Golder, Director,
Affinity Aged Care Financial Services

 

 

Go to next step: 4.5 Assessing the family home


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