The move into aged care sparks a flurry of financial decisions – none more emotionally charged than what to do with the family home. To preserve their investments (after all, that’s what provides their income) many people sell the home to pay for aged care.

It makes sense, swapping one accommodation for another, until you factor in the negative impact it can have on your pension and aged care costs.

How you choose to pay for aged care matters. The wrong decisions can come at a high price, financially and emotionally

Your home has special treatment for both pension and aged care means tests. When it comes to your pension, your home is an exempt asset for two years after you move into aged care. Any Refundable Accommodation Deposit (RAD) you pay is also exempt.

So, if you keep your home and pay your RAD from your investments, you can get an exemption on both the value of........

© The Sydney Morning Herald