Granny Flat Arrangements - A New Way to Consider Aged Care
Many elderly Australians struggle with the idea of simply selling up their family home and moving into a completely new environment, away from their family and the comforts they have become accustomed to. Not everyone is suited to an Aged Care facility, and more and more Australian families are now realising the benefits of ‘granny flat arrangements’.
On top of the emotional discomfort, the cost of moving into an Aged Care facility can be daunting. Although Age Care providers don’t want to admit it, the demand for space in nicer facilities is high, and often the best rooms/units end up going to the individual who can provide the total accommodation costs upfront as a lump sum now. This means those who don’t have access to liquid cash struggle to find a suitable home for their retirement journey, or are forced to endure in an uncomfortable environment, which is not in their best interests, or good for their mental health.
Fortunately there is a way to look after your loved ones, and ensure their peace of mind without having to move into to an Aged Care facility. This is where a ‘Granny Flat Arrangement’ comes into play.
Granny flats aren’t just the old flats out the back of your friends house. Rather they are a housing structure which is recognised by Centrelink as a viable alternative option to an Aged Care facility; one which is afforded the same asset test ‘assessability’ rules, to ensure Age Pensions are not lost entirely.
Instead of an elderly parent or relative selling up their family home and using the proceeds to buy into a life tenancy agreement in an Aged Care home, they can transfer the proceeds from the sale of their family home to their children or relatives - who in consideration - provide the elderly family member the right to reside with them for the remainder of their life.
The proceeds of the sale of the family home are ‘exempted’ from Centrelink assessment the same way they would be if the proceeds were used to provide a Refundable Accommodation Deposit (RAD) to an Aged Care provider. Instead of house proceeds flowing to a third party, they can remain inside the family unit, where they can be used to make modifications to the family home (such as support rails, or ramps) or can be used to fund an extension of the home to provide extra space for the elderly parent/loved one to live.
There is of course limits to how much can be exempted as Centrelink ‘assessable’, which is defined by a reasonableness test. Humble Goode can work with you to help calculate this test limits for a Granny Flat Arrangement, and can assist with all paperwork required to implement this unique strategy.
We are Aged Care experts and have successfully enabled many elderly South Australian’s to move in with their loved ones, or into a home closer by to them (which can still be considered a Granny Flat Arrangement). You can even transfer the title of a property between family members as valid consideration, to avoid sale costs on the home.
Why not give us a call to learn more about protecting your loved ones in a time of uncertainty and worry.