The family home can affect residential aged care fees, but the answer is not simply “the whole house counts” or “the house is always exempt”. Special rules apply.
The aged care means assessment and the Age Pension means test are also different systems. A home may be treated one way for aged care fees and another way for the pension.
Do you have to sell the home?
No aged care rule automatically requires a person to sell their home. Families may choose to keep it, rent it, sell it or use another way to fund accommodation. Each choice can affect cash flow, pension entitlements and aged care contributions differently.
How much of the home can be counted?
If the home is retained and no protected person is living there, the aged care means assessment generally includes the lower of:
- the net market value of the home, or
- the government-set capped home value.
As at 20 March 2026, the capped value published by My Aged Care is $214,884. The cap is indexed, so it must be checked at the relevant calculation date.
When can the home be exempt?
The home is not counted in the residential aged care means assessment while it is occupied by a protected person. My Aged Care describes a protected person as:
- the resident’s partner or dependent child;
- an eligible carer who has lived in the home with the resident for at least two years; or
- an eligible close relative who has lived there for at least five years.
The carer or close relative must also meet the relevant Australian Government income-support requirements. It is important to confirm eligibility rather than relying only on the length of time they have lived there.
What happens for a couple?
For a couple, the aged care means assessment generally uses half of the couple’s combined income and assets, regardless of whose name an asset is held in. Health-related separation can still be treated as a couple relationship for assessment purposes.
What if the home is rented?
The property may still be subject to the capped-home rule for aged care asset purposes, while net rental income can be assessable income. The Age Pension treatment can be different, which is why the two calculations should be reviewed together.
What changes if the home is sold?
Once the home is sold, the sale proceeds may become financial assets and be subject to deeming unless another exemption applies. The sale can therefore change both Age Pension entitlements and aged care contributions. It can also change the amount available to pay a RAD.
Questions families should answer before deciding
- Is anyone remaining in the home, and do they meet the protected-person rules?
- What is the current net market value and mortgage balance?
- Would the property be rented, vacant or sold?
- How would each option affect the pension and assessed aged care contributions?
- How will accommodation and ongoing daily fees be funded?
- Are there legal, estate or co-ownership issues?
Need help understanding your figures?
Aged Care Fee Experts provides plain-English fee calculations, accommodation comparisons and practical Services Australia support without recommending financial products or telling families what decision to make.
Book a Complimentary Initial ConsultationOfficial sources used
- My Aged Care – Means assessments for residential aged care
- My Aged Care – Changes to fees and accommodation costs
- My Aged Care – Understanding accommodation costs
Government rates and thresholds change. The source pages should be checked again when a calculation is completed.
General information only: This guide does not provide financial, legal or tax advice. Outcomes depend on individual circumstances, provider agreements and the rules, rates and thresholds applying at the relevant time.