The simple answer is yes but be careful of the financial consequences.
The rules around gifting for aged care are in line with pension rules around gifting (deprived assets). Any gift you make in excess of $10,000 in a financial year and $30,000 in the five years prior to entering aged care will be assessed as an asset and deemed to earn income.
This assessment will impact the calculation of:
– Your pension entitlement
– Determining if you are eligible to be a low-means resident
– The amount of accommodation payment you can be asked to pay
– The amount of means-tested care fee you will be charged.
-Entitlement to apply for Hardship down the track.
You are expected to use your own resources to look after yourselves and gifts will reduce your available resources. Therefore, the government limits how much you can give. Amounts gifted above the allowable limits are “deprived assets” and assessed as financial assets. This excess is included in the assets test and income test (under deeming rules) for five years from the date of the gift.
In a typical scenario, Rosa gifted $20,000 on 01 May to her daughter.
This reduced her bank account by $20,000 but $10,000 is added back as a deprived asset for five years.
Caution should be advised before gifting any money using a Power of Attorney document or when the capacity of the donor is in any question.
If you have any questions, consulting with an Aged Care Expert is a great way to learn more about your best options. Get in touch with one of our Aged Experts for a discussion.