Christina Grant is described as “nearly blind” and has “mild dementia”, which would make it difficult for her to live alone.
After she made a “common mistake” with her visa application, her family said they were ordered to send her back to Scotland.
She moved to New South Wales to stay with her son, Allan, and daughter-in-law, Diane, after her elder son, Robert, who had looked after her in Scotland, died two years ago.
The pensioner, originally from Dulnain Bridge, Strathspey, thought she was complying with the terms of her visa.
Speaking earlier this week, Diane Grant said: “They have not officially ‘kicked her out’ but left us with no option and the threat of doing so if she is not on plane by the 26th (of July).”
According to Mail Online, a spokesman for the Department of Immigration said this was not the case and urged the Grant family to contact them.
He said: “We have no plans to remove Christine Grant and we are willing to resolve her situation.
“She is currently an unlawful citizen because her existing visa has expired.
“She needs to put a visa application in so that we can consider all of her circumstances.
“It’s true that she has been told she can’t remain in Australia on her current expired visa but we are happy to work with her and her family.
“The family is understandably confused in their thinking because they are speaking through the media instead of directly to us.
“One option could be that she applies for a visa and we can then grant her a bridging visa that will keep her lawful whilst her visa application is being considered.
“Yes, health is a consideration but there is no law saying that a 96-year-old cannot apply for a visa. Also, if she is unfit to fly we cannot force her to fly or deport her by any other means.”
He added: “We urge the family to speak to us directly through the Australian Immigration Department in the UK so we can glean the full facts and work with the family to resolve Christine Grant’s visa status.
“There are no plans to deport her and its incorrect to say she will be refused a visa because of her health. Health is only one of a number of considerations but we can’t know her exact circumstances until she applies for a new visa.”
Mrs Grant had originally claimed that her mother-in-law was being deported because of a mistake with her paperwork.
A stipulation in the elderly woman’s visa said she had to leave the country once a year for it to be continued.
She recently went on a cruise to Vanuatu. However, the trip did not count because it was a “round trip cruise”.