The Government announced changes to how rental income from the former home will be treated (only for Means Tested Fee purposes), there will be no change to the treatment of rental income for Pension purposes. However this change will only affect NEW residents who move into aged care after 1st January 2016. For those who are already permanent residents in aged care as at 31st December 2015, they will not be affected, by this change.
The current rules allow an aged care resident to retain their home & rent it out, & as long as a part of all of their Accommodation Payment has been paid as a Daily Accommodation Payment (DAP), ie interest charged as a daily rate, then the rental income is not counted as income in the determination of the Means Tested Fee (MTF).
However for those people who become a permanent resident after the 1st January 2016, & who elect to retain & rent the home, they will have 2/3 of the gross rental income counted as income, when calculating the Means Tested Fee, therefore those people will pay a larger means tested fee, than those who became permanent before the 1st January 2017. This may also affect anyone who moves into care before the 1st January 2016, & then leaves aged care for more than 28 days, & later re-enters aged care after this date.
Posted: 20-Sep-2015. Author: Eric Hiam
10-Apr-2018 Eric Hiam
27-Mar-2018 Eric Hiam