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Example - transfer to new rules advantageous
Thomas is a single pensioner who recently paid an $80,000 entry contribution to move into a hostel. Prior to his move, he lived in a home worth $350,000.
Because of the high value of his home, Thomas was better off under the old nursing home assessment rules whereby his former home is an exempt asset for two years. However, under these rules the entry contribution he has paid is assessed as a loan and is deemed.
From 1 October 1997, it would be to Thomas's advantage to have the entry contribution he has paid assessed as an accommodation bond.
As an accommodation bond, the entry contribution will not be deemed and he can still have his former home exempt as an asset for two years