If your mother or father is moving into aged care, & wants to keep their home, then they better get in quick before the rules change in January 2017.

Currently it is quite possible to move into an aged care facility, keep your home, rent it out & retain your Age Pension (in fact your pension could even increase) if you get the right advice, & contrary to popular opinion this can be the case beyond the 2-year limit, that most people are aware of. In fact, we have been helping thousands of our clients do this for 15 years, & saved them thousands of dollars in the process.

But, the Government has brought about a change to the treatment of the home (for Pension purposes) for those who move into an aged care facility AFTER the 1st January 2017. Part of the Ominbus legislation which received royal assent in September, will from January onwards count the home as an asset 2 years after moving into care, & any rental income will be counted & consequently this will reduce the pension entitlement for some, & others will lose their pension completely. The “Spin” attached to this change was to make it fairer. However, if your mother moved into care on 31st December 2016 & her sister moved into care on the 1st January 2017, & both wished to retain their home, then your mother’s pension would be retained, & your aunts pension would be reduced, & then after 2 years her pension would be lost, how can this be fair.

The people moving into aged care now, were mostly young couples just after the 2nd world war, they were encouraged by the Government of the day to buy or build their own homes, & the great Australian dream of home ownership became the norm. Their home was their castle & many of them built the home themselves & have their blood sweat & tears in that home. That generation of people highly value the idea of passing down their home to family. Now that they are moving into aged care, this Government change is going to force more of them to have to sell their home (taking away any hope of ever going home again) or if not selling reducing their assets to fund their aged care.

If they elect to sell the home, & use the sale proceeds to pay their Accommodation Payment as a Lump Sum (RAD), & invest the remainder of the proceeds, then the surplus proceeds will have a negative impact on pensions, & all this at a time when interest rates are historically low, so with very low interest rates & less Age Pension being paid, all this reduces the value of their estate & consequently your inheritance.

It is understandable that the Government have to reign in expenditure, & increase revenues to bring the budget back into line, but why is it always pensioners & the elderly that they seem to attack, is it because the elderly is a soft touch, & won’t fight back? There have been around 8 changes to pensions & aged care in the last 2 years, & all of those changes were beneficial to the Government at the expense of the pensioner or elderly. Yet multinational companies can transfer profits out of the country & avoid paying tax in Australia, under the guise of being a large employer of people (collectively small business employs many more people than multinational companies) & we must pay our tax (as we should) but they get away with it. Why wont the Government make a stand to increase taxes from multinationals & leave our pensioners & elderly alone?