Where a protected person is living in the home, the home is not included as an asset for aged care

I AM 52 years old and am a full-time carer of my mother, who is 76. I live with her and am on a carer’s pension. She is worried if she has a stroke or gets dementia she will have to move into a nursing home. She is concerned that I will be evicted from our unit if this happens. Is this correct? We are both so worried.

There are special exemptions that can apply to the former home for aged care purposes if a “protected person” lives there. The definition of a protected person includes a carer who has been living in the home for at least two years and who is eligible for an Income Support Payment.

Where a protected person is living in the home, the home is not included as an asset for aged care. From a pension perspective, the home may become assessable two years after the pensioner leaves it, so it is important to seek advice to understand the short and longterm consequences of what may happen in the future.

I AM not seeking financial advice, but only seek a clearer picture of what happens when retirement is here and we still have a holiday house and some super and shares.

My wife and I are still working part-time doing consultancy. We own our home worth $850,000, a holiday home worth $900,000, have $500,000 in superannuation and $45,000 in shares.

We have heard that it is best to have all our funds in super to get the best tax advantages. What is your general impression of our situation?

You are certainly doing better than most people, but a major proportion of your assets are tied up in a holiday home, could take advantage of the bring-forward rule and contribute $300,000 each in non-concessional contributions to super and $25,000 each as concessional contributions for which you could claim a tax deduction.

Certainly, superannuation would enable you to hold assets in a zero-tax area while you are both drawing a tax-free pension but you need to make sure you optimise the potential of the assets you hold inside super because the rate of return is the major factor that will determine how long your money will last. I also suggest you work as long as you can provided you are happy doing that – this will help your money to last longer.

Noel Whittaker is the author of Making Money Made Simple and other finance books. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: noel@noelwhittaker.com.au