Selling Your Home in Australia How to Avoid Selling Your Home to Pay for Aged Care
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Aged care costs can be expensive, and many people believe that the only way to cover those costs is by selling their family home. However, what if you don’t want to sell your home? Are there other options available? In this article, we will explore various ways to avoid selling your home to pay for aged care while still being able to afford the necessary fees.
Do I Need to Sell My Home to Pay for Aged Care?
The short answer is no, you do not need to sell your home to pay for nursing home fees. Your home belongs to you, and you should never feel pressured to sell it. In fact, there are advantages to retaining your home when moving into aged care, especially if you have loved ones who will continue to live in it. However, it is important to note that aged care nursing home costs can be expensive, and selling your home may be the only option if you don’t have sufficient funds elsewhere.
Ways to Avoid Selling Your Home to Pay for Aged Care
Here are five ways you can avoid selling your home to cover aged care costs in Australia:
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Sell Other Available Assets: Instead of selling your family home, consider using other assets that are not favorably assessed for Centrelink and aged care purposes. This could include bank savings, shares, or superannuation. By utilizing these assets first, you can minimize aged care fees and potentially increase your Age Pension entitlements.
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Pay Less Towards the RAD: The Refundable Accommodation Deposit (RAD) is a lump sum bond that nursing homes require upon moving into care. However, you do not have to pay the full RAD amount upfront. You can choose to contribute nothing towards the RAD upon entry and make a payment towards it at a later date. Keep in mind that any unpaid RAD amount will accrue interest.
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Borrow Funds from Family: If you want to retain your family home for sentimental or financial reasons, consider borrowing funds from family members to help cover aged care costs. However, this arrangement should be done carefully to avoid estate planning issues or family conflicts. Seeking professional financial and legal advice is highly recommended in this situation.
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Borrow Against Your Home: If your home is unencumbered, you may be eligible for a reverse mortgage or the Government’s Home Equity Access Scheme. These options allow you to borrow against the equity in your home to fund aged care costs without having to sell your home. It is important to understand the risks and implications associated with these arrangements and seek professional advice.
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Move into a Different Aged Care Home: If the nursing home you have chosen has a high RAD amount and additional services fees, you may feel pressured to sell your home. However, you can explore other aged care homes with lower RAD amounts and little or no additional services fees. This way, you can avoid selling your home and still afford the necessary care.
Reduce Assessable Assets and Income
In addition to the above options, there are numerous aged care strategies available to reduce Centrelink and aged care assessment of your income and assets. By structuring your income and assets in a more favorable way, you can lower aged care costs and potentially increase your Age Pension or DVA entitlements. Seeking professional advice is crucial in implementing these strategies effectively.
Should You Sell Your Home to Pay for Aged Care?
It is important to carefully consider all the implications before making a decision about selling your home. Rushing into a decision without seeking professional advice can result in higher aged care fees, lower Age Pension entitlements, and regret over losing your home. Remember, advice from nursing home staff, placement consultants, or Centrelink representatives should not be considered professional advice, as they may not be qualified to provide personalized guidance and may have a conflict of interest. At Core Value Aged Care Advice, we can help you navigate the complexities of aged care and find the best financial solutions for your family. If you have any questions or concerns, please reach out to us for expert guidance.
