This article concludes our series debunking some of the urban myths about Aged Care decisions made by or for those in need of such care. Debunking more Aged Care myths, we deal with those suggesting that –
- the requirement to sell the family home; and
- means-tested care fee is a simple one-size fits all calculation.
Sale of the family home as a default
It is often the case that clients come to this conclusion following preliminary discussions with a residential aged care provider. ‘By default’ means that the client assumes that by going into a residential facility, they must sell their home. It is unclear where this myth starts, whether by urban understanding or misinterpretation of information received.
The decision to sell the family home is a significant financial one. It is a course of action that is often accompanied by stress and anxiety. And it is actually, not a requirement per se. It is not the default option. Like most substantial financial decisions, there are usually alternative options to consider. Individuals should make financial decisions based on their prevailing personal circumstances, which will vary from person to person.
The funds arising from the sale of the home will result in a better financial outcome for some residents. For others, time may be available for them to move into the residential facility before finalising the decision to sell.
Means tested care fees
At this stage of life, cashflow budgeting is often a critical exercise. In this process, the assessor calculates the Means Tested Care Fee (MTCF). Many High Net Worth residents commonly misunderstand the annual cap and daily cap. They mistakenly believe that dividing the annual cap by the number of days in a year determines the MTCF. At its simplest, that would result in a daily fee of around $91 – whereas the actual calculation is based on a means tested cap, divided by the days. This method could potentially result in a daily fee in excess of $365. This is a complex calculation: see the elements on this government Aged Care website page.
The daily fee is payable until the annual cap is reached. That cycle will repeat until the lifetime cap has been met. As at the date of this article being drafted the caps were set as follows:
Caps on means tested care fees – Residential care*
| Means tested care fee caps | Rate |
| Lifetime cap | $79,942.44 |
| Annual cap | $33,309.29 |
*These rates were determined as at 20 March 2024, to take effect from 1 July 2024
Source: Australian government Department of Health and Aged Care website.
The government has deferred the Aged Care reform legislation, originally due to take effect from 1 July 2025, to 1 November 2025. You should monitor the above website for updates to these rates.
Getting Aged Care financial decisions right
The Continuum Financial Planners experienced advice team can work with you to help you make financial decisions in your best interests. Our Accredited Aged Care Adviser can help you with all financial aspects in evaluating your aged care arrangements. To arrange an appointment with our team –
- phone our office on 07-34213456, or
- at your convenience, use the linked Book A Meeting facility.
You may wish to refresh your understanding of the earlier matters we published in this series: they are available on our website: Aged Care myths debunked – RADs; and Debunking Aged Care myths. For more information about our Aged Care service, go to this Page on the website.
(This article was first posted by us in May 2024. We occasionally refresh/ update it, most recently in July 2025.)
