Vacation of home to enter care situation (INH) reviews 110-02090000

If a customer vacates their principal home to enter a care situation, the former principal home is exempt from the assets test for 2 years. After the 2 year exemption, if the customer has not returned to their principal home:

• the customer is treated as a non-homeowner, and
• the principal home is an assessable asset, unless the customer’s partner is residing in the principal home

If the partner still lives in the home, the customer remains a homeowner and their former home is exempt from the assets test. No review is set.

Renting out former principal home

If the customer entered aged care on or after 1 January 2017, the net rental income from their former home is assessed as ordinary income from the date it commenced. This may affect the customer’s rate of income support payments.

For Aged Care Means Test assessments, if the customer is receiving rental income from their former principal home, see Aged Care means assessment - Rental income from principal home.

When a customer vacates the principal home to enter a care situation on or after 1 January 2017, the former principal home remains exempt from the assets test for 2 years from the date they entered care. An automatic review generates 98 weeks from the date the principal home was vacated to enter the care situation.

After the 2 year exemption, if the customer and/or partner both entered care at the same time and have not returned to their principal home:

• the customer (and partner) is treated as a non-homeowner, and
• the principal home is an assessable asset

When a homeowner vacates their principal home due to illness, the home is normally exempt from the assets test for 2 years. This 2 year exemption applies whether or not they intend to return.

If the customer has entered care and their partner is still living in the principal home, the customer remains a homeowner and their former home is exempt from the assets test. No review is set.

If the partner vacates the home at a later date to enter a care situation, a 2 year exemption applies from the date the last member of the couple living in the property vacated the residence.

If the partner who was still living in the principal residence passes away, a 2 year exemption for the surviving partner starts from the date of their partner's death.

If the former principal home is sold in the 2 year exemption period:

• if the customer is single, or both customer and partner are in a care situation, they will be assessed as non-homeowners and the proceeds of sale are assessed as an asset and are subject to deeming from the date of sale
• if the partner not in care intends purchasing a new principal home, both remain homeowners and the proceeds of the sale they intend using to purchase the new residence are exempt from the income and assets test, but subject to deeming for up to 12 months

See Sale of principal home.

An escalation for a Vacation of home to enter care review may be required:

• when a customer provides requested information
• when the customer requests more time to provide requested information
• to restore suspension due to non-compliance with a home vacation review (including when care recipient has passed away)
• if the partner of a customer in a care situation has passed away

Suspension of payment

If the customer’s payment is suspended due to non-compliance with a vacation of home review, only HVR processing are to restore payment. An escalation to vacation of home review processing is required, as the review must be completed before the payment is restored.

If the care recipient has passed away when the payment is suspended, HVR processing will restore payment from the date payment was suspended and finalise the review activity. Service Officers in a service centre or Smart Centre can then proceed with DEA action.