Will we have to sell the house?
Four myths about aged care and what every Australian family should actually know before a loved one moves into residential care
When a family first sits down to talk about residential aged care, the conversation is almostnever about care. It’s about the house. The worry that a lifetime spent paying off a home could be undone by a single admission is one of the most common — and most misunderstood — fears we hear.
The reality is that the rules are far more protective of the spouse who stays at home than most people expect. Here are four myths worth clearing up before you make any decisions.
The home and the means test for residential aged care
Who really counts as a “protected person”
Carer Payment vs Carer Allowance, not the same thing
Grandfathering and the Aged Care Act 2024
M Y T H 01
“The government will make me sell my home if my spouse moves into agedcare.”
The Reality
NO, you won’t be forced to sell the family home.
When one member of a couple moves into residential aged care and the other stays in the family home, the home is exempt from the means test for the person entering care — as long as it remains the principal home of a “protected person” (here, the spouse still living there).
This exemption applies no matter what the home is worth. There is no value cap that suddenly triggers a sale.
Why the Myth Persists
Confusion with the Age Pension assets test. That test has its own rules about the home, and they are different from the aged care rules. The two get mixed up constantly.
The accommodation payment. Families hear about Refundable Accommodation Deposits (RADs), which can run into the hundreds of thousands, and assume the home has to be sold to fund one. It doesn’t: the resident can pay a Daily Accommodation Payment (DAP) instead — a rent-like daily fee — or combine a smaller lump sum with a daily payment. The home can stay untouched.
The means-tested care fee. This fee is worked out using both an income test and an assets test —but the family home is not counted as an assessable asset while a protected person lives in it.
M Y T H 02
“A “protected person” just means a husband or wife.”
The Reality
The definition is wider than most people realise.
The home stays exempt if it’s occupied by any of the following:
A spouse or de facto partner
A dependent child
A carer who has lived in the home for at least 2 years and is eligible for an income support payment
A close relative who has lived in the home for at least 5 years and is eligible for an income support payment
M Y T H 03
“Carer Payment and Carer Allowance are basically the same thing.”
The Reality
They’re different. The difference decides whether a live-in carer counts as a
protected person.
Carer Allowance Carer Payment Not an income support payment. Is an income support payment. Does not satisfy the protected person test. Does satisfy the protected person test.
Carer Allowance | Carer Payment |
Not an income support payment. | Is an income support payment. |
Does not satisfy the protected person test. | Does satisfy the protected person test. |
So a family member caring for a resident may or may not keep the home exempt, depending on which payment they receive. It’s worth checking before you assume.
M Y T H 04
“Grandfathering means anyone already in the system just pays the old rates.”
The Reality
Grandfathering is real, but it isn’t all-or-nothing, and the details matter.
The Aged Care Act 2024 took effect on 1 November 2025, alongside the new Support at Home program. It came with a “no worse off” guarantee: people already in the system shouldn’t pay more under the new rules than they would have under the old ones. But how fully you’re protected depends on when you entered care.
Admitted to permanent residential care on or before 31 October 2025? Fully grandfathered — both the accommodation payment and the ongoing contributions stay under the old rules.
Approved for (or receiving) a Home Care Package on or before 12 September 2024, but entering residential care after 1 November 2025? Only partially grandfathered. The resident contributions are protected, but the accommodation payment (the RAD or DAP) follows the new rules.
Why 12 September 2024 matters
That date — when the Act was introduced to Parliament — is the cut-off for Home Care Package grandfathering. Being approved for a package on or before it protects your home-care contribution position under Support at Home. On its own, though, it does not hand you the old residential accommodation rules. It’s an easy distinction to miss, and worth getting right.
C A S E S T U D Y — Doris & Eddy
Doris and Eddy, both 85, own their home in Westleigh. Eddy’s dementia has progressed to the point where Doris can no longer care for him at home, and she plans to move him into residential aged care. Doris loves her garden and intends to stay in the family home as long as she can.
Together they receive the full couple’s Age Pension. They hold $400,000 in an ANZ term deposit, $20,000 in a Westpac pension saver account, and $5,000 in home contents. The facility they’ve chosen has a Refundable Accommodation Deposit (RAD) of $500,000.
Because they don’t have the full $500,000 on hand, they can pay part of the RAD as a lump sum and cover the rest with a Daily Accommodation Payment (DAP) — or use a DAP alone.
Eddy won’t be a grandfathered resident: he’s entering care after 1 November 2025 and didn’t have a Home Care Package approval before 12 September 2024. Even if he had, only his resident contributions would be protected — not the accommodation payment.
Once Eddie Moves Into Permanent Care
For the means test, a couple’s combined assessable assets are split equally. Their $425,000 in assessable assets — everything outside the exempt home — means $212,500 is attributed to Eddy.
They can choose how to fund the accommodation payment: a lump-sum RAD, a periodic DAP, or a mix of both. Selling the home is a choice, never a requirement.
The home is deliberately left exempt, so Doris isn’t uprooted just because Eddy needs full-time care. That’s usually the reassurance families need most. The anxiety is rarely about the numbers — it’s about losing the family home and the security it represents. As Eddy’s spouse, Doris meets the protected person test, and the home stays exempt.
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