When a loved one moves into aged care, it can feel like everything is changing. For many families, one of the biggest concerns is about Centrelink and Aged Care – and what happens to the Pension?
In addition, will the Centrelink Age pension stop? Will it be reduced? Is the family home still exempt? Let’s break it down.
🧓 Does Entering Aged Care Cancel the Age Pension?
No — entering aged care does not automatically stop your loved one’s Age Pension.
But it can change the amount they receive, depending on their:
- Income (including from super, investments, and rent)
- Assets (including cash, shares, property, etc.)
- Living situation (e.g. if someone is still in the family home)
Centrelink will conduct a means test to reassess the individual’s pension eligibility and payment amount.
🏡 What Happens to the Family Home?
Here’s where it gets tricky — but good advice makes all the difference.
In the first place – If a spouse or protected person remains living in the home:
-
The home is exempt from the asset test
-
The Age Pension is usually not affected dramatically
Moreover, if no one remains in the home:
-
The home is exempt for up to 2 years from the date of entry into care
-
After that, it’s counted as an asset (with an assessable cap currently around $197,735, indexed)
💡 Important: If the home is rented out, the rental income is included in the income test — this can reduce the pension or trigger additional aged care fees.
🧮 What If Assets Are Sold to Pay for Care?
Comparatively, if your loved one sells the home, or cashes out investments to fund care:
-
The sale proceeds are counted as assets and may reduce the Age Pension
-
This can also increase the means-tested care fee payable to the aged care provider
That’s why strategic timing and structuring is essential. Acting without advice can unintentionally reduce entitlements or trigger unexpected costs.
💰 Does Centrelink Affect Aged Care Costs Too?
Yes — Centrelink’s income and asset assessment also determines how much your loved one pays in:
- Means-Tested Care Fee
-
Accommodation payments (RAD or DAP)
Your pension isn’t just a source of income — it affects how much you pay for aged care and how much financial support you receive.
📑 What Documents Do I Need to Provide?
To reassess Age Pension and aged care contributions, Centrelink will usually require:
-
Aged Care Calculation of your Cost of Care (SA457)
-
Details of assets and income
-
Copies of bank, investment, and super statements
-
Information about the family home
-
Accommodation agreements with the aged care provider
At Trusted Aged Care Services, we help families prepare and lodge these forms correctly to avoid delays or mistakes.
👩💼 Why Get Help with Centrelink?
Because aged care financial rules are complex, not to mention — the wrong move can be costly. As a matter of fact, our team regularly works with Centrelink and aged care providers to:
- ✅ Preserve pension entitlements
- ✅ Protect family assets (like the home)
- ✅ Reduce means-tested care fees
- ✅ Structure funding for long-term peace of mind
Let’s Get Your Pension Working For You
Again, don’t let confusion around Centrelink and aged care leave your family stressed or underfunded. If you’re worried about Centrelink and Aged Care and what happens to the pension, reach out. Together, with the right guidance, your loved one’s pension can continue to support them — and your family’s financial future can stay secure.
📞 Book your aged care strategy session with Trusted Aged Care Services today.