Battle over family home highlights struggle to foot aged care bill
Home is where the heart is? That certainly wasn’t the case in the article in the Herald Sun I read this week about a 91-year-old husband and his 83-year-old wife fighting it out in the Federal Circuit Court.
The full story
‘The pensioners married 62 years ago, four years after meeting in 1950 when she was 17 and he was 25, and have four children aged between 56 and 60.
The pair separated in 1986 but are not divorced and have never had a property settlement.
“Ms Scott” — a pseudonym used by the Federal Circuit Court — applied for a property settlement after being cut from her former husband’s will.
“Mr Scott” who lived in the $620,000 marital home until recently needs to sell the house to pay a $235,000 refundable deposit on his new accommodation at an aged care facility.
Although the couple split three decades before Ms Scott often returned to the marital home over the years to garden and clean.
Ms Scott even helped Mr Scott around the home when he broke his hip in 2000; cleaned, shopped and did his laundry in 2007 and 2008 when he was ill; and continued to mow the lawns until 2009.
Judge Janet Terry found Ms Scott had, however, repeatedly pressed her claim, giving uncontested evidence that she told her husband many times, “Sell the house, I want my half”, but was consistently told to wait and assured she would get her fair share.’
A fight to the end
It’s a strange scenario, but it’s one we may see played out more often as families try to meet the costs of aged care for elderly parents.
Leading aged care accountants StewartBrown tell us the average refundable accommodation deposit (RAD) now sits around $285,000 and the figure is usually well over $300,000. It’s a considerable sum to fork out in one hit[1].
That’s not including the daily care fee, the means-tested fee and fees for extra services that also need to be paid when someone enters aged care.
A difficult – and costly – decision
Even if families opt for the other payment option, which is the daily accommodation payment (DAP), they often rely on the family home to cover costs. Generally the decision to sell, rent out or borrow against the home is made in a rush, after a parent suddenly falls ill or becomes no longer able to care for themselves.
In this case, the couple’s children became concerned about their father’s health at the same time the settlement was filed back in 2014 and he moved into aged care. This left the NSW Public Trustee, which takes a sizeable chunk of any settlement in their fees, to manage his affairs.
The final decision
In the end, the judge found the house should be sold immediately and the profits split 50-50 only last week. She said this would let the husband pay his bond and the wife “maintain a reasonable standard of living and enjoy some luxuries like an overseas trip”.
The court also gave Ms Scott permission to pick up her sewing machine, a table and chairs once owned by her mother, “cooking gadgets” and other belongings she had left behind more than 30 years ago – “if they are still there”.
The lesson here seems obvious to me: educate yourself on the costs of aged care and plan ahead now to avoid any family dramas down the track.