Accommodation bonds charged by nursing homes are said to have breached the million-dollar mark in some parts of Sydney and Melbourne, underlining the need to do what you can to minimise care costs and maximise Centrelink benefits.

Aged-care facilities, such as standard-care nursing homes and hostels, require potential residents to pay an upfront bond to secure a place. High-care facilities aren't allowed to charge bonds, though there have been calls for them to be permitted to do so.

The nursing home or hostel retains the accommodation bond, earning interest on the money and slicing off a monthly "retention" amount, which the Federal Government currently caps at $299 (indexed annually). There are also a variety of daily care fees.

RBS Reverse Mortgages, which markets special loans for accommodation bonds, says bonds now range from $130,000 in regional areas to as much as $1 million in the two biggest cities. Most commonly, they come to about $300,000.

However, walk up to the reception desk of a nursing home and ask how much you - or your elderly parent - will pay and you won't get a straight answer, the national manager of technical services for Australian Unity Financial Planning, Craig Meldrum, says.

"Generally you can't just rock up and get a price," he says. Instead, you'll undergo a rigorous financial examination before the aged-care facility puts a final figure on the table.

"There's no set price and it can be as much as they like," Meldrum says, as long as the resident is left with a government-mandated $36,000 to their name.

If that leaves you thinking you'll have to sell the house, financial advisers hasten to say there are ways to make the best of what appears to be a bad lot - and to keep the family home.

They also urge people to get advice before they knock on their first nursing home door, so their finances are arranged in the best way to lower care costs and maximise government support.

It's possible to obtain specific advice in this area from an aged-care financial planning specialist, with a plan costing anywhere between $500 and, say, $2000, depending on the complexity.

"The current generation of senior citizens often have their entire wealth wrapped up in the family home," the national manager for advice strategy at Ipac Securities, John Dani, says. "It then becomes a case of finding the bond.

"Often the first response is, 'We'll just have to sell the home.' That's certainly an option but it has fairly big consequences."

The family home is exempt from the Centrelink assets test for at least two years. If you sell, you're converting some of it - what's left over after the bond - into an asset that's no longer exempt, which can mean a lower age pension.

And in many cases there's a surviving spouse who still needs a home.

One solution might be to find a nursing home that accepts the bond in partial payments, Dani says. Bear in mind, though, that the unpaid portion will attract interest.

Meldrum says not many people realise that if you're paying all or some of an accommodation bond via periodic payments, rent generated by the family home is exempt from the Centrelink income test. That way you can maintain the age pension plus generate funds to help meet those daily care fees.

"But it's certainly not a simple matter of it being better one way or the other," he says. "Some people are better off if they sell [and pay a lump sum bond], others are better off if they retain and rent the home."

The calculations might include factors such as the house needing costly renovations if it's to attract tenants.

Another possibility is one or more adult children stumping up the bond but that can cause problems in distribution of the estate.

Reverse mortgages or similarly structured accommodation bond loans are a third option for those who can't or won't sell the family home, Dani says.

But the parent and the adult children need to go into such an arrangement understanding that the interest on the loan will be capitalised - in other words, added back on to the loan rather than paid at the time - and this will be costly.

"It needs to be done with the family in mind and the kids need to be aware of the fact that there's this debt building up that will need to paid off" through the eventual sale of the home, he says. He notes that lenders generally guarantee you won't go into negative equity, where the debt exceeds the property value.

A technical services manager with ING, Mark Gleeson, says families also need to consider ways to minimise what's known as the "daily income-tested fee". Most aged-care residents pay a basic daily care fee of about $37 but others also pay an additional daily fee of up to $60 (capped by the government and indexed annually) if they cross income thresholds. "Anything you can do to reduce your social security assessable income will reduce your income-tested fee," Gleeson says.

One strategy is to put investment money into an insurance bond and hold it in a private trust.

With insurance bonds, if there are no withdrawals during their 10-year life there's no assessable income. Held outside a trust, the deeming rules would apply - ascribing a set rate of return regardless of whether that's achieved or not - but this doesn't happen inside a trust.

"You can have a very reduced or even nil income-tested fee by placing a certain level of assets into these insurance bonds," Gleeson says.

However, that saving has to be weighed against the fact that insurance bond earnings are taxed at 30 per cent, when most aged-care residents would pay little or no personal tax.

Meldrum says the legal and accounting fees involved in operating a family trust should also be considered.

With all these strategies, the calculations have to be worked through for each individual's circumstances.

Key points

Nursing home accommodation bonds range from $150,000 to $1 million.

Selling the family home to fund the bond may not be the best option.

The family home is exempt from the assets test for at least two years.

Rent is exempt from the income test if the bond is paid by periodic payments.

There are also ways to minimise income-tested fees for care.