Aged Care Fees and the Age Pension: How They Interact
Aged care and age pension: how pension status shapes fees, the means test, the family home, and whether moving into care affects the pension.
Two systems, one means test
Pension status drives fees
Home care and the pension
Residential care and the pension
The family home
Will moving into care affect the pension?
Getting the numbers right
Frequently asked questions
Does the age pension affect aged care fees?
Yes, strongly. Pension status is the biggest signal of what someone pays. Full pensioners generally pay the lowest fees, part pensioners more, and self-funded retirees the most, because aged care fees are based on income and assets.
Will my parent lose their pension if they move into care?
Not automatically. Moving into residential care by itself does not end the pension, and many residents keep receiving it. However, decisions about the family home or a large accommodation payment can change how assets are assessed.
How is the family home treated?
For aged care means testing, the home is counted only up to a capped value, not its full worth, with protections where a spouse still lives there. The pension can treat the home differently, so selling or renting affects both systems.
Where can I get the numbers modelled?
Use the free Financial Information Service through Services Australia to understand the rules, or an accredited aged care financial adviser to model options like paying a lump sum versus a daily fee and their effect on the pension.