Elsie Moves in with Her Daughter
Elsie is 75 and recently widowed. She needs some assistance with her daily activities and cannot drive. These were things her husband used to assist her with. She owns her own home, worth $400,000, with contents worth $2,000. She also has $500,000 cash short term deposits earning 4.5%. Elsie is currently eligible to receive $398.00 (20 March 2023) per fortnight or $10,348.00 per annum of age pension.
Elsie wishes to sell her home and move into a new home with her daughter Kate. The value of the new home is expected to be $700,000. If Elsie sells her home and contributes $600,000 to the purchase of the new home in Kate’s name, this is not considered a gift as she has not paid more than the purchase price of the new house – in fact, her daughter has paid $100,000 plus purchasing costs. Elsie will still be treated as a homeowner for age pension purposes because the amount she has paid is greater than $224,500 (20 March 2023) (Lane & Whittaker, 2016).
After covering the cost of her granny flat right Elsie is left with $300,000 in the bank, which will still impact on her pension entitlement, however the impact is less than it would have been if she had stayed at home – plus she gets the support she needs.
|Stay at home||Granny Flat|
|Age pension now||$10,348||p.a.||$25,948||p.a.|
Lane, R., & Whittaker, N. (2016). Aged Care Who Cares? In R. L. Whittaker, Aged Care Who Cares? (p. 16). Noel Whittaker Holdings Pty. Ltd.
Steve Jenkosky trading as Golden Age Advisory is an Authorised Representative of Synchron AFS License No. 243313.
Unless specifically indicated, the information contained in this 'Case Study' is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a financial adviser.