What Happens to My House If I Go Into a Nursing Home?

When considering aged care, one of the most pressing concerns for many Australians is: What happens to my house if I go into a nursing home? For most, the family home is more than just a property; it represents security, legacy, and emotional ties. Understanding how your home is treated in aged care assessments is crucial to making informed decisions and protecting your assets.

In this guide, we’ll explain how entering residential aged care can impact your home, debunk common myths, and outline strategies to safeguard your property.

Understanding How the Family Home is Assessed in Aged Care

When you move into a nursing home, the Australian Government assesses your financial situation to determine how much you’ll pay for your care. This includes an evaluation of your income and assets—and yes, that often includes your home.

However, there are important exemptions and limits:

  • If a protected person (such as a spouse, dependent child, or carer) continues to live in the home, it is generally exempt from the asset assessment.
  • Even when counted, the home’s value is capped at a set amount for aged care fee calculations.

For a detailed explanation of how your assets impact your care costs, refer to our guide on the Means-Tested Care Fee.

Do I Have to Sell My House to Pay for Aged Care?

A common misconception is that moving into aged care forces you to sell your home. In reality, you have several options—keeping, selling, or renting:

  • Keeping the Home

    You can choose to retain ownership. This may be suitable if a family member continues living there, or if you prefer to keep the property as part of your estate. However, holding onto the home could impact your pension and aged care fees depending on rental income and asset thresholds.

  • Selling the Home

    Selling can provide liquidity to cover significant costs like the Accommodation Deposit (RAD). While this might feel like a loss, in some cases it can reduce ongoing financial strain.

  • Renting the Home

    Renting is another strategy, but it’s important to understand how rental income affects both Centrelink entitlements and aged care fees.

Case Study Example

Margaret, aged 82, moved into residential care. Her husband remained in their Sydney home, meaning the property was exempt from the asset test. With tailored advice, they avoided selling the family home and structured their finances to minimise aged care costs.

How the RAD and DAP Affect Your Home

When entering aged care, you’ll likely encounter the RAD—a lump sum payment for accommodation. If you don’t wish (or aren’t able) to pay the full RAD upfront, you can opt for a combination of RAD and Daily Accommodation Payments (DAP).

Many families consider selling the home to cover the RAD, but this isn’t always necessary—or advisable—without professional guidance. The decision can have lasting impacts on your estate and pension eligibility.

Learn more in our comprehensive RAD guide.

Government Assistance and Your Family Home

Navigating government rules is complex, but support is available through services like:

These agencies provide frameworks for aged care assessments, but they don’t offer personalised financial strategies. That’s where professional advice becomes critical.

Strategies to Protect Your Home and Assets

Without careful planning, families can find themselves forced into decisions that could have been avoided. Key strategies include:

  • Understanding Gifting Rules: Giving assets to family members might seem like a solution, but Centrelink’s deprivation rules can penalise such actions.
  • Establishing Trusts or Life Interests: In some cases, structuring ownership differently can offer protection.
  • Reverse Mortgages: While not suitable for everyone, unlocking equity without selling may be an option.

For asset exemptions, review our blog: What Assets Are Exempt from Care Home Fees.

Common Questions About the Family Home and Aged Care

What if my spouse or child still lives in the home?

If a protected person remains in the home, it is generally exempt from aged care asset assessments.

How long is my home exempt from aged care calculations?

The exemption applies as long as a protected person resides there. Once the home is vacant, it may be counted after a grace period.

Can I use a reverse mortgage to fund aged care?

Yes, but it’s essential to understand the long-term implications. Professional advice is strongly recommended before proceeding.

Conclusion

Facing the realities of aged care doesn’t mean surrendering your family home. With the right financial strategies, many Australians can enter residential care while preserving their property and legacy.

Every situation is unique, and seeking personalised advice ensures you make decisions aligned with your financial goals and family needs. Roccaforte offers aged care-specific financial advice and can help you navigate the complex world of aged care fees. Book a free consultation today!