Does living in a granny flat, caravan or boat affect your pension?

I’m often asked about how different living arrangements can affect your Age Pension. Let’s look at some of these different arrangements.

Granny flat interests
If someone buys a bigger house for their children with the intention of living with them, builds a self-contained unit on their children’s land, or gives their children a lump sum and lives in one of their bedrooms, we call this a ‘granny flat interest’.

Granny flat interests are created when you exchange assets, money (or both) to live in someone’s property for the rest of your life.

How you create the interest will also determine if we consider you a homeowner for the purposes of your pension payment, and if we include the value of that interest in your assets test. This may affect both your eligibility for the pension and how much pension you can get.

Granny flat interests can also have significant implications for your possible aged care needs and your estate.

Read more: How Services Australia revalues your market-based investments

I recommend you seek financial and legal advice before you create a granny flat interest. Our free and confidential Financial Information Service can provide information on granny flat interests. Just call 132 300 and say ‘Financial Information Service’ when prompted.

Living in a caravan, mobile home or on a boat
If the home you own is a boat, a caravan, a relocatable or non-relocatable home in a caravan park or lifestyle village and you pay site or mooring fees, you’re assessed differently to a person who owns the home and land.

That’s because you own your home, but not the land it’s on or the boat mooring.

In these cases, your boat, caravan, relocatable or non-relocatable home will be exempt from the assets test and won’t affect your Age Pension. You may be eligible for rent assistance for your site or mooring fees.

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If you own the land (up to two hectares) or mooring as well, it may also be exempt from the assets test and won’t affect your pension. However, in this situation, you won’t be eligible for rent assistance.

We assess retirement villages differently, so it’s important we know whether you live in a retirement village or in a caravan park or lifestyle village.

The best thing for you to do is get in touch with us through your normal payment line so we can help you.

Do you have a question for Hank? Email [email protected] and we’ll aim to get an answer to your question.

Read more: How to access extra financial support

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Written by Hank Jongen

Hank Jongen is the human face of Centrelink, a government agency on behalf of the Department of Human services, responsible for $100 billion in funds, 40,000 staff and 99% of the Australian population at some stage or another