Can my daughter continue to live in my house if I go into care in Australia?

Oct 22, 2025 3 min read •

Legal and Financial Aged Care Australia Family Living Arrangements

According to Services Australia, your family home may be exempt from the aged care means assessment if a 'protected person' continues to live there. This means that in certain circumstances, your daughter can continue to live in your house if you go into care in Australia, but it depends on her eligibility and your financial arrangements.

Quick Summary

The ability for a daughter to remain in her parent's home after they enter aged care hinges on her qualifying as a 'protected person' under Australian law, which impacts the parent's aged care means assessment. Eligibility rules vary depending on the daughter's relationship to the parent, living arrangements, and income support status. It is important to understand the criteria to avoid affecting the parent's fees.

Key Points

Protected Person Status: Your daughter's eligibility as a 'protected person' is key to exempting your home from the aged care means test. Criteria include being a dependent child or a close relative receiving a Centrelink benefit and living with you for a specific duration.
Impact on Aged Care Fees: If your daughter doesn't meet the 'protected person' requirements, the capped value of your family home will be included in the means test, potentially increasing your aged care fees.
Granny Flat Arrangements: Establishing a 'granny flat interest' provides your daughter with a legal right to reside in the property for life, which can have implications for tax and Centrelink assessments.
Document Your Agreement: A formal legal document is essential to clearly define the living arrangement and residency rights, providing security for both you and your daughter.
Seek Professional Advice: Given the complexities of aged care means testing and associated legal and financial matters, obtaining professional advice specific to your circumstances is strongly recommended.
Check Eligibility: Confirming if your daughter meets the 'protected person' criteria is the initial step to understanding how her residency will affect your aged care finances.
Selling the Home: Selling the property converts the asset into cash, which is fully assessed under the means test, potentially leading to higher aged care fees than if a protected person occupied the home.

Can your daughter be a 'protected person'?

When you enter permanent residential aged care in Australia, your family home is usually part of the assets test for the Means Tested Care Fee. However, the home can be exempt if a 'protected person' resides there. Your daughter's eligibility depends on her specific situation.

Conditions for a daughter to qualify

To be a 'protected person', your daughter must meet one of these criteria:

Be your dependent child or student.
Be a close relative who has lived with you for at least five years and receives a Centrelink income support benefit on the day you enter care.

If she does not meet these conditions, the home will be an assessable asset for your aged care fees.

Financial implications if your daughter does not qualify

If your daughter doesn't qualify as a 'protected person', the value of your home (up to a capped amount) will be included in your means test. This will likely increase your aged care fees.

Example financial scenarios

Below is a comparison of how your daughter's status affects the home's assessment.


Scenario	Daughter's Status	Home Asset Assessment	Impact on Aged Care Fees
Scenario 1	A 'protected person' remains living in the home.	The home is fully exempt.	Fees are calculated based on other income and assets only.
Scenario 2	No 'protected person' remains living in the home.	The home's value is assessed up to a capped amount (as of Sep 2025, approx. $210,555.20).	Fees increase due to the home's value being included in the means test.

Selling the home means the proceeds are counted as a financial asset, potentially further increasing fees.

Considering a 'granny flat arrangement'

A 'granny flat arrangement' is a legal agreement granting someone the right to occupy a property for life. This can secure your daughter's right to live in the house and formalise financial arrangements.

How granny flat arrangements can work for you and your daughter

This can involve transferring property title while retaining a life interest, or contributing funds for a lifetime right of accommodation. A non-commercial arrangement can be exempt from Capital Gains Tax (CGT). Written documentation is essential, and a 'Reasonableness Test' may apply for Centrelink. Legal and financial advice is strongly recommended.

The importance of a legal agreement

A written agreement clarifies expectations and residency rights for both parties. Without one, an adult child is generally considered a licensee, meaning permission to reside can be revoked. A formal agreement provides security and clarity.

What to do if the situation is not straightforward

If your daughter doesn't meet the protected person criteria and increased fees are a concern, seek professional advice. An aged care financial planner or elder law lawyer can explore options like government assistance or other financial strategies. Specific rules may apply if your daughter has been your full-time carer.

Conclusion

Your daughter's ability to remain in your home in Australia while you are in aged care depends significantly on her eligibility as a 'protected person'. While exemptions exist, they have strict criteria. Formalising arrangements through a legal agreement, like a granny flat interest, is recommended. Professional financial and legal advice is crucial to navigate these complex rules.

Note: For the most current information, verify details with Services Australia or consult a professional. You can find details on income and means assessments on the {Link: My Aged Care website https://www.myagedcare.gov.au/income-and-means-assessments}.

Frequently Asked Questions

A 'protected person' is someone who, by residing in the family home, allows that property to be exempt from the aged care asset test when the owner enters care. This status applies to specific individuals, such as spouses, dependent children, certain carers, or close relatives meeting residency and income support criteria.

No, an adult daughter must meet specific conditions to be considered a 'protected person.' These include criteria related to dependency, student status, or being a close relative with a qualifying residency period and Centrelink income support payment.

When a qualifying 'protected person' lives in your home, its value is excluded from your aged care means assessment, which can help reduce your means-tested care fee. Without a protected person, the home's assessed value (up to a cap) contributes to the means test, likely increasing your fees.

A 'granny flat interest' is a formal agreement establishing a lifetime right to occupy a property, often in exchange for assets or funds. It provides legal certainty for your daughter's residency and can have implications for Centrelink means testing and Capital Gains Tax.

If the family home is sold after you move into aged care, the sale proceeds become a financial asset that is fully assessed for the means test. This can result in higher means-tested care fees compared to the capped assessment applied if the home is retained with no protected person, or the exemption if a protected person resides there.

In the absence of a formal agreement, an adult child living in your home is generally considered a licensee, meaning permission to stay can be withdrawn. A formal written agreement is advisable to establish clear legal rights and terms for both parties.

If there is no protected person living in your home, the home may still be exempt from the aged care asset test for up to two years after you enter permanent residential aged care. This exemption period allows time to decide on the future of the property without it immediately impacting your means assessment.

References

Medical Disclaimer

This content is for informational purposes only and should not replace professional medical advice. Always consult a qualified healthcare provider regarding personal health decisions.