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A: Both the Centrelink assessment and aged care asset test will need to be considered here and will likely have an impact on your client's aged care circumstances.
For Centrelink purposes the home can be exempt for up to two years after a person leaves to enter a care situation, irrespective of whether the person intends to return to their home. A care situation is where a person leaves the home to receive or to provide care for at least 14 consecutive days. A care situation can include entering residential aged care.
Where one member of a couple enters a care situation and the other person in the couple remains in the home, the couple are determined to remain homeowners. So in this case the home continues to be exempt.
If the partner living at home dies, the 2-year home exemption will apply to the surviving partner in the care situation from the date of their partner's passing.
In your client's case, if the former home is not sold, its net market value will be assessed under Centrelink's asset test from 1 September 2023 (two years after your client's wife's death) and your client in care will become a non-homeowner.
Aged care assessment
For aged care asset test, the net market value, up to the home exemption cap, will be assessed if no protected person lives in the home. The home exemption cap is currently $175,239.20 as of 20 September 2021.
If a protected person lives in the home, the home is exempt from the aged care asset test. Once the protected person vacates the home, the net market value of the home is immediately assessable up to the home exemption cap. A protected person includes:
In this client's case, while the wife, a protected person, lived in the home it was exempt from the aged care asset test. The net market value of the home up to the home exemption cap will be assessed for the aged care asset test from the date of her death, 1 September 2021. The assessment of the home may impact your client's aged care fees.
If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.
The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.