War widow/widower pensions

November 24, 2025

🎖️ War Widow/Widower Pensions: Meaning and Use in Aged Care

War widow/widower pensions are government payments provided to individuals whose partner died as a result of their war service or defense service. These payments acknowledge the sacrifice made by the deceased veteran and offer ongoing financial support to the surviving partner. This assistance is especially important when considering the financial aspects of entering the aged care system.

What is a War Widow/Widower Pension?

A war widow/widower pension is a non-taxable income support payment. In Australia, these pensions are administered through the Department of Veterans' Affairs (DVA). Eligibility usually depends on the deceased veteran's service history and the cause of death being accepted as service-related. The payment is designed to help the recipient maintain a reasonable standard of living.

Unlike standard income support payments, the war widow/widower pension often receives special consideration when assessing an individual's financial situation for other purposes, particularly aged care.

How War Pensions Affect Aged Care Fees

When an individual needs residential aged care or home care services, their ability to pay for those services is usually assessed through an income and asset test. This assessment determines the level of government subsidy the individual will receive and how much they will be required to pay in means-tested care fees.

For aged care financial assessments, a war widow/widower pension is treated differently than ordinary income. This difference is a significant benefit for recipients seeking aged care services.

Residential Aged Care Fees

Residential aged care involves several different charges: the basic daily fee, accommodation costs, and means-tested care fees.

The basic daily fee is a set rate, usually based on a percentage of the single Age Pension.
The accommodation cost is based on the individual's assets.
The means-tested care fee is based on both income and assets.

Crucially, the entire amount of the war widow/widower pension is generally excluded from the income assessment used to calculate the means-tested care fee. This exclusion means that the pension does not count as income, resulting in a lower assessed income. A lower assessed income leads to a lower means-tested care fee, potentially saving the recipient thousands of dollars annually in aged care costs.

If a person’s only significant income is their war pension, they may be assessed as having no assessable income for aged care purposes, minimizing their means-tested care fee obligation.

Home Care Package Subsidies

Home care packages (HCPs) provide funding for services that help older Australians remain in their homes. Recipients of an HCP may be asked to pay an income-tested care fee. Similar to residential care, the Department of Veterans' Affairs war widow/widower pension is not counted as income in the income assessment for the home care package income-tested care fee.

This exception helps recipients afford necessary home care services by reducing or removing the income-tested fee component.

Financial Planning Considerations

Recipients of these pensions should be mindful of how these payments interact with other government supports. Although the pension itself is usually exempt from aged care income testing, the capitalised value of certain DVA payments, such as a DVA Gold Card, can sometimes affect asset testing, though this is less common and depends on specific rules.

It is always advised that individuals receiving a war widow/widower pension seek financial advice when planning entry into aged care. Understanding exactly how the DVA payment is treated by the Department of Social Services (which handles aged care assessments) is key to accurately planning finances and understanding fee obligations.

The policy to exempt these pensions reflects a recognition by the government of the unique circumstances and sacrifices related to military service. This policy ensures that the financial aid provided to the surviving partner does not negatively impact their access to or affordability of necessary aged care services later in life. This treatment stands as an important support mechanism within Australia's aged care funding model.

❓ Frequently Asked Questions (FAQs)

1. Is the war widow/widower pension taxed?

No, the war widow/widower pension paid by the Department of Veterans' Affairs is generally not taxable income.

2. Does the war widow/widower pension count towards the aged care means test?

For the purpose of calculating the means-tested care fee in residential care or the income-tested care fee in home care, the war widow/widower pension is usually excluded from the income assessment.

3. Who administers the war widow/widower pension?

The war widow/widower pension is administered by the Department of Veterans' Affairs (DVA) in Australia.

4. If I receive a war widow/widower pension, am I exempt from all aged care fees?

No. While the pension is excluded from the income test, you are still required to pay the basic daily fee and any agreed-upon accommodation costs, depending on your assets. The exemption only reduces the means-tested care fee.

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