Real Estate and Financial Assets

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Real Estate and Financial Assets

Dear AgedCare101,
Thanks for your wealth of knowledge. I've been reading your website all day. 
My Mum has been in residential care for one year. She is on full age pension with no savings but owns her home.
I currently live in her home as I was a protected person due to Carer Payment which ceased last October.
We will be selling her home next year under the two year rule (Approximately worth $800K) to pay the full RAD of $495K therefore leaving her approximately $300K residual assets.
My siblings and I have been thinking to purchase a unit with most of Mum's residual funds for $250K in Mum's name and me live there as it is very close to the aged care home as I visit there daily and also volunteer there otherwise I will have to move back into my own unit which is an hour's drive away.
I wouldn't be paying her any rent but would be paying all of the bills as it will still belong to her and my siblings are in agreement with this as I've been her full time Carer for the last 5 years.
The balance of approximately $50K would remain in the bank to pay the daily means tested fees and the RAD is paid in full.
From my research and understanding, I believe Mum's age pension would most likely be reduced considerably and that she would also have to pay a means test daily fee on top of the basic daily fee, would this be correct? and if so, approximately how much pension would she receive and how much means test fee is payable?
I've attempted this via the online estimator on myagedcare and it appears that it would equate to approximately $400 per fortnight means test fee but does not indicate anything about the age pension payment.
Your advice would be much appreciated as I've now got a headache.
Kindest regards Dee
 

JeniferWilliams

I hope you will get your proper answer. 

agedcare101

Hi Dee,

Thank you for your lovely remarks about the education material on the site.  We spend a lot of time making sure we cover everthing while trying to keep it as easy to understand as possible.  Finance is always a really trick pary of the journey as it is very complex and different for everyone.

The wonderful Robert Craven from Affinity Aged Care Financial Service has been able to help us out with this one as it is a complex question with a number of unknown variables.  The strongest advise we can say is that in this case, we really advise that you work closely with a specialist aged care adviser.

You stated that you were a protected person at the time your mother entered care.  Under this scenario, the home would have been an excluded/non-assessable asset.  As such, from the limited information provided, we suspect that your mother would have been assessed as a supported resident.  If so, she will always remain a supported resident, regardless of her future altered circumstances and the facility will not be permitted to accept a RAD.  Additional financial assets will have a significant impact on both your mother’s age pension entitlements as well as her means tested care fees and her DAC.

You mentioned that your mother has been in care for one year but her Carer Payment only ceased last October.  Were any overpayments ‘clawed back’ and, if so, were you actually a protected person on the date that her mother transitioned to permanent residential care?  It may be possible to appeal the original assessment but you would need to understand the financial implications before going down this path.

If the family sells the home and purchases a unit, the unit should not be assessed as a former principal place of residence and your mother should then be assessed as a non-homeowner.  This is a complex case and would need to be closely monitored to ensure that pension entitlements and means tested care fees are correctly assessed.

For this case especially we really do advise you to work with an Aged Care Adviser.  Sorry that I can’t be more specific but I hope this helps.  

Thanks

The agedcare101 team

dsilver1929@outlook.com

Dear 101 and Robert,

Thank you for the advice and yes, I intend to seek financial advice. You are correct in that Mum was assessed as a supported resident however if I remain in her home indefinitely and not do anything, doesn't her principal place of residence become assessable after 2 years from date of entry to permanent aged care?

agedcare101

Hi again Dee,

Yes you're right, after 2 years your mum's home will be included in the Income and Assets assessment, but the house will only be valused up to a capped value which currently is $165,271.20.

Hope this helps,
the agedcare101 team

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