Moving in with a family member can have many benefits for an elderly person seeking companionship or extra help with daily activities; however, without the proper planning, these arrangements can cause significant heartache for all involved.

The Australian Institute for Health and Welfare released a report on 17 April 2013 revealing that over 90% of older Australians intend to remain in their own home rather than downsizing or moving into aged care. This study confirms the prevailing attitude in our community that most people wish to avoid institutional aged care for as long as possible. Of those who do move out of their own homes, poor health and a desire to be closer to family were strong motivators.

Families are becoming creative in how they can accommodate and care for the needs of elderly relatives. Common solutions involve an adult child moving into the family home to care for their parent or an elderly person selling their home to move in with a family member, often contributing to the cost of renovations or construction of a granny flat.

Consider This

Deciding to move in with a family member can and will result in a major change to both your personal and financial circumstances.

You should seek financial advice before you move in so you understand how the proposed arrangement will affect your current or future entitlements to Centrelink and whether there will be any tax implications for you or the family member involved.

It is a good idea to discuss your decision with all family members to ensure everyone is aware of their respective rights and obligations. Hurt feelings can arise if others feel that they are being treated unfairly or left out of the planning process. You should be clear about whether any financial contribution by you to the family member’s property is a loan or a gift.  Although it might seem trivial at first, you should be specific about what kind of care you expect to receive (e.g. meals and cleaning) and who is responsible for outgoings such as utility expenses or maintenance on the property. Proper planning and discussion will reduce the potential for misunderstandings.

What can go wrong?

There are a number of reasons that a family care arrangement will come to an end. The realities of living with family members may be different from expected and parties can quickly recognise that they would be happier living separately. Sometimes the situation may become unworkable through no fault of the parties. Examples include:

• Divorce or insolvency of your child/family member which may result in the property being sold;
• Death or illness of your child/family member or their partner; or
• The need for you to access a higher level of care.

A family agreement can deal with what happens in the event that the arrangement comes to an end. Without deciding the process at the start, parties can be left in a difficult position.

Taking the time to discuss your expectations with your family and seeking professional advice about your options will go a long way towards ensuring a happy arrangement that is workable for all family members.