Do I have to sell the family home to pay for residential aged care?

Do I have to sell the family home to pay for residential aged care?

No. You are not legally required to sell the family home when you enter residential aged care.

The home may affect the amount you are assessed to pay, but you can usually choose how to meet your accommodation costs.

How can accommodation be paid?

Depending on your means assessment, you may be asked to pay some or all of your accommodation costs.

Payment options can include:

• a refundable lump sum

• a daily accommodation payment

• a combination of a smaller lump sum and daily payments.

A person paying the full agreed room price may pay a Refundable Accommodation Deposit, or RAD.

A person receiving government assistance with accommodation may instead pay a Refundable Accommodation Contribution, or RAC, a daily contribution, or a combination.

You should not feel pressured to sell the home immediately to pay a lump sum. Daily payments can generally be used instead, although they may be expensive over time and should be carefully compared with other options.

Is the home counted in the means assessment?

It depends on who continues living there.

The home may be excluded from the residential aged care means assessment if it is occupied by a protected person, such as:

• your partner

• a dependent child

• an eligible carer who has lived there for the required period

• an eligible close relative who has lived there for the required period.

Services Australia may ask the person living in the home to complete an assessment or provide evidence confirming that they meet the protected-person rules.

If no protected person lives in the home, a capped amount of its value may be included in the residential aged care means assessment. The entire market value is not necessarily counted.

The means assessment determines:

• whether the government contributes towards your accommodation

• whether you pay an accommodation contribution or the full room price

• what other means-tested residential care contributions may apply.

What if my partner still lives in the home?

The home is generally excluded from the residential aged care means assessment while your partner continues to live there.

This means one partner can usually remain in the family home while the other enters residential aged care. Selling the home is not required to secure an aged care place.

The couple’s other income and assets may still be assessed under the applicable couple rules.

Can I keep and rent out the home?

Potentially, yes.

Some families retain the home and use rental income to help pay:

• daily accommodation payments

• the Basic Daily Fee

• other residential aged care contributions.

However, renting the home can change how rental income, the property and the Age Pension are assessed. The financial result depends on the person’s entry date, pension status, ownership arrangements and other assets.

This is an area where independent aged care financial advice is sensible before making a decision. My Aged Care also recommends seeking independent advice when planning how to meet aged care costs.

Is a lump sum refundable?

A RAD or RAC is described as refundable, but for residents under the accommodation arrangements applying from 1 November 2025, legislated retention amounts may be deducted over time.

The remaining refundable balance must generally be returned when the resident leaves the home or dies, subject to the applicable rules and any valid outstanding amounts.

This means a RAD should not be described as completely untouched or fully refundable in every case under the current rules.

Can an aged care home force me to pay a lump sum?

An aged care home cannot require you to sell your home merely because you are entering care.

Everyone entering care agrees on a published or negotiated room price, but how much the person actually contributes depends on their means assessment. The agreed room price cannot be higher than the home’s published price, although a lower price may be negotiated.

Before agreeing to accommodation, ask the home to show you:

• the agreed room price

• the lump-sum option

• the equivalent daily-payment option

• any combination-payment options

• how daily payments are calculated and indexed

• whether RAD or RAC retention applies

• when the refundable balance will be returned.

What if I cannot afford the costs?

Government assistance may cover some or all accommodation costs for people with lower financial means.

Financial hardship assistance may also be available where aged care costs cannot reasonably be met because of circumstances beyond the person’s control. The government may pay some or all eligible fees, contributions or accommodation costs following an individual assessment.

Practical example

Suppose a person enters residential aged care while their spouse remains in the family home.

In that situation:

• the spouse does not generally have to move

• the home is generally excluded from the aged care property assessment while the spouse lives there

• the resident may still have other assessed fees based on the couple’s income and remaining assets

• any accommodation amount can be considered using lump-sum, daily-payment or combined options.

If the person lives alone and nobody protected remains in the home, they may still keep it. However, part of its value may be included in the means assessment, and the person will need another way to meet any accommodation costs.

The practical answer is:

You do not have to sell the family home. You can keep it, rent it or sell it, depending on your circumstances. Before deciding, complete the Services Australia means assessment and compare the long-term cost of a lump sum, daily payments and retaining the property.

What should I do next?

Confirm the details with My Aged Care or the relevant provider, write down your questions and ask for important information in writing before making a decision.

Helpful Local Home Help resources

• Start with Liz

• How much does Support at Home cost?

• More articles about aged care costs