Putting together the Aged Care puzzle

Published in Coffs Coast News of the Area on 31 July 2026.

Harry, aged 85, is finding that he needs a walking frame to move around his house. His house requires various renovations, such as a ramp and grab handles in the bathroom if he is to stay there. He cannot afford the renovations.

Harry decides to move in with his daughter. He intends to give his daughter the proceeds of the sale of his home, in return for him living with her.

Harry’s daughter has a mortgage, which Harry intends to discharge. He only has a small amount of savings and is reliant on a Centrelink pension to meet his day-to-day expenses.

Harry sees a solicitor and seeks advice.

Harry is advised that in order to keep his pension entitlements, a granny flat agreement should be considered. Legally, a granny flat interest is an agreement for accommodation for life and is not necessarily a description which applies to a particular type of dwelling.

In addition, he is advised that if Services Australia determines that Harry has paid too much for his granny flat interest, he may be deemed to have deprived himself of an asset by way of a gift and could lose his pension for up to 5 years.

The solicitor advises Harry that, particularly in light of her existing mortgage, if things don’t work out with his daughter, he may have difficulty relocating comfortably.

Harry is advised to consider other options, such as home assistance or downsizing. He is also advised of the possibility of obtaining a reverse mortgage, whether this is through a private lender or through the Home Equity Access Scheme, administered through Services Australia.

In terms of downsizing, Harry is advised to consider obtaining accommodation in a retirement village or a manufactured home park. These options will allow Harry to maintain his financial independence in terms of security of tenure and mitigate the risks of difficulties in realising the return of funds advanced to his daughter.

The solicitor recommends that Harry obtains financial advice in relation to the Services Australia requirements before proceeding, and invites his instructions to draft a compliant granny flat agreement, should he wish to proceed in that direction.

If you have a request for a Hypothetical, call Manny Wood on (02) 66 487 487 or email [email protected].

This fictional column is not legal advice.