Aged care and the family home is the conversation most families have too late. A parent has a fall, a hospital discharge planner mentions a place, and within a fortnight someone is deciding whether to sell the house. The rules changed on 1 November 2025, and the choices they leave are easier to weigh before the need arrives.
How the home is counted
For the aged care means test, the former home counts at its net value up to a cap: $219,858 from 20 September 2026. Beyond that it is not counted. If a partner or dependent child still lives there, it is not counted at all, and the same applies to some carers and close relatives on income support who have lived there for years.
For the Age Pension, the home stays exempt for two years after entering care. After that it counts as an asset unless a partner still lives there. If it is rented out, the rent counts as income under the normal rules.
Paying for the room
A room can be paid for as a refundable accommodation deposit, a daily payment, or a mix. From 1 July 2026, a home can charge up to $789,686 for a room without special approval. For anyone entering care from 1 November 2025, the home keeps 2 per cent of the deposit each year, for up to five years, and that part is not refunded. The daily payment is set from the room price using a government interest rate that changes each quarter.
Sell, rent or keep
| Choice | What it does |
|---|---|
| Sell | Frees the money for the deposit; the home leaves the family |
| Rent it out | Rent helps pay daily costs; after two years the home counts for the pension |
| Keep it empty | Holds the home for the family; costs continue and nothing comes in |
Ron’s family sold his home six weeks after he entered care, to pay a $650,000 deposit. They sold in a slow month and took the first offer.
Betty and her children had talked it through a year earlier. When she went into care, they paid a daily payment for six months, rented the home, and sold in spring with time on their side.
Before it is needed
The cap and the room price are indexed during the year, but the questions stay the same: who lives in the home, what it would rent for, what the family wants to keep. Asked early, the answers are ready when they are needed.
Nicholas Lockhart
General information only. No advice is given.
Source: Department of Health, Disability and Ageing, schedule of fees and charges for residential care, 20 September 2026; Department of Health, RAD and RAC retention (from 1 November 2025); Social Security Guide 4.6.3.70, Exempting the principal home; My Aged Care, Means assessments for residential aged care.