When is a Spouse a 'Spouse', Pt 2: Spouse Definitions in Centrelink and Aged Care

Separate, or a couple? For Centrelink and Aged Care, distinctions matter. A lot.

Life doesn’t always fit neatly into legal definitions.

For many people, separation and ongoing living arrangements can blur the line between being considered a spouse and being recognised as single. This is especially true when it comes to superannuation, Centrelink, and aged care.

In this episode, independent financial advisers Jordan Vaka and Nathan Fradley explore Anne’s question about a long-term marriage that ended amicably, but where both partners continued living together in a shared home.

On paper, they were still legally married. In practice, they lived separately under one roof.

How Centrelink Defines Separation

Centrelink doesn’t use a single hard rule to decide if someone is in a couple or single. Instead, they consider five factors:

1. Financial arrangements – how money and bills are managed.

2. The household – whether life is shared or divided.

3. Social aspects – whether the pair still present publicly as a couple.

4. The sexual relationship – whether intimacy is part of the relationship.

5. Commitment – the extent of mutual support and future planning.

Not every box needs to be ticked; Centrelink forms an overall picture.

This flexibility is deliberate, to recognise that life is rarely black and white. But it also means your story - and the evidence you provide - really matters.

The 'Protected Person' Rule in Aged Care

Centrelink isn't the only area where your status as a couple, or otherwise, is crucial. Aged care is another - particularly, as Anne raised, whether the family home would be exempt from aged care means testing.

Here, the concept of a “protected person” is vital.

A home can remain exempt if it is occupied by:

• A spouse,

• A dependent child,

• A family member who has lived there for at least 5 years and qualifies for income support, or

• A carer who has lived there for at least 2 years and qualifies for income support.

In Anne’s case, whether she is classed as a spouse—or alternatively as a family member meeting income support rules—determines whether the home is excluded from the assessment.

Where Complexity Meets Real Life

The conversation also highlights how one decision can ripple across systems.

For example, being considered “separated” may benefit Centrelink entitlements, but could jeopardise superannuation death benefit payments that rely on spouse status.

Power of attorney arrangements add another layer—particularly when an estranged spouse may face conflicts of interest in managing defined benefit income.

The key takeaway: there’s no perfect answer. These definitions interact, overlap, and sometimes clash.

That’s why professional advice matters—to help navigate the trade-offs and protect both financial security and peace of mind.

Because your situation is, in all likelihood, pretty unique. And you may have to decide between 2-3 less-than-perfect options, rather than one easy, no-brainer choice. And professional advice will help you with this.

If you or someone you know is facing similar challenges, remember you don’t have to untangle it alone.

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