The largest asset for most retirees continues to be their residential home.

Debt free and capital gains tax exempted, the home will continue to provide critical lifestyle options.

Whilst the residential property continues to be asset test exempted for the Centrelink pension entitlements, it certainly appears on the radar when entering residential aged care facilities such as nursing homes.

The world of retirement living and aged care is indeed a very complicated one as all of us with elderly parents and relatives know. Unfortunately, for most elderly needing to be placed into a care facility, there typically isn’t much time for considering or planning the options available. The fact that there is a very limited supply of accommodation, a very confusing set of rules governing entry and carer cost, all compounds the anxiety of such an emotional decision.

There are a number of, both government and non for profit organizations (one such organization is Benetas-Aged Care. www.benetas.com.au) which provide comprehensive and up to date advice. However, it is most difficult to gain general advice or specific instructions which can be applied across the board as every case will need to be assessed on its own merits and the appropriate accommodation will be determined on both the applicant criteria (health, assets, income) and the geographical availability of suitable accommodation.

For those seeking supported residential accommodation, and that should be anybody entitled to Centrelink pension, they should consider seeking an asset assessment (www.agedcareaustrali.gov.au/assest/assesment) prior to approaching any likely accommodation facility. This is not required for respite care.

The government has provided a range of measures to assist retirees in maintaining their independence whilst staying at home, in granny flats or independent retirement villages (www.agedcareaustralia.gov.au/independent+living+units).

Independent living and retirement villages present a whole new range of contractual and legal jargon that one needs to be aware of and understand before signing up.

In relation to retirement villages; both my mother and aunty reside in this type of accommodation, and as a general observation from my own experiences I can share that these are independent living villas or apartments and can either be rented, in which case you will be entitled to rent assistance from Centrelink, or “purchased” as a residence.

The rental arrangement is relatively straight forward and can be terminated if desired.

A purchased [leased/owned] arrangement involves a complicated agreement which is subject to a whole range of exit penalties and resale restrictions. This in fact is the most common arrangement with retirement villages and can lead to a significant amount of frustration and disappointment when one tries to move on or sell their villa. On the other hand, if you take the time to understand what you are entering into from the beginning, it can be a very pleasant and rewarding lifestyle.

My best advice is to consider your retirement living requirements at your earliest opportunity as the benefits are the greatest for long term residents.

My mother has been a happy independent resident for over 10 years and many of our clients have enjoyed the same experience. There is a significant choice of such accommodation in the current market and the vendors are most negotiable on price and conditions of your purchase and tenure.

Unfortunately too many entrants leave their decision until they are in fact too old to benefit from the independent living arrangements and the average period of occupancy is somewhere between 3 and 5 years before they move into nursing homes.

In both instances of supported and independent living arrangements there are significant matters of financial, estate and Centrelink planning to be considered, before you make the final decision.

If you are in a position to do so, give yourself time and start asking the questions.