What you need to know about retiring to a mobile home

The Centrelink rules that apply if you have a caravan park address.

What you need to know about retiring to a mobile home

Increasing numbers of older Australians are choosing to live permanently in a mobile home or campervan.

There are a couple of Centrelink rules that apply to retirees accessing the full Age Pension and other benefits if they have a caravan park address.

First, the caravan has to be named as the primary place of residence. If you happen to still own your old home, and your spouse is no longer living there, then that residence will be assessed under the assets test and possibly the income test if you are earning rent money from the property.

Some retirees move to a caravan park and keep their houses because they want to earn rent from them. Others decide their houses are too big for them, so they allow their children to occupy their houses for free, while they downsize to a relocatable home.

In these situations, Centrelink will apply the income test to any rent you are earning and the assets test to the home. As the house is no longer considered the primary place of residence, it becomes an asset and, depending on its value, will likely reduce the amount of Age Pension you receive.

And if you do decide to sell your house and move into a motorhome, think carefully about what you will do with your windfall, because Centrelink will also want to factor in any extra cash into their decision on your Age Pension.

On the positive side, folk who live permanently in caravan parks can receive rent assistance to offset the cost of site hire. They also receive help in managing their money through a Centrepay account.

Essentially, Centrepay is a scheme whereby deductions are made from your payment for accommodation-related costs. These include caravan park fees, such as rental or site costs, electricity bills, vehicle registration and insurance cover for your caravan.

And you can set and forget by using the Electronic Verification of Rent. This is a secure, automated process that lets businesses electronically verify and update your rent amount with Centrelink.

Have you ever considered selling up and moving into a relocatable home? Do you currently enjoy the nomad life on Australia’s roads? Would you recommend it to others? What pitfalls have you discovered?

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    COMMENTS

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    MICK
    8th Aug 2019
    11:26am
    I feel sorry for any Australian forced into this sort of retirement. It tells a story (for most) of a life without sacrifice. Sneaks up and gets you though.
    Before the barage yes I do understand life throws up circumstances for some which prevent them attaining home ownership. My sympathies for those in this position. Sadly for most it is self inflicted and at some time the Piper needs to be paid.
    inextratime
    8th Aug 2019
    1:07pm
    Hi Mick,

    How would you know if most of it is self inflicted ? Sounds a bit pious to me. Maybe you could post a copy of your national survey on the matter.
    inextratime
    8th Aug 2019
    1:07pm
    Hi Mick,

    How would you know if most of it is self inflicted ? Sounds a bit pious to me. Maybe you could post a copy of your national survey on the matter.
    MICK
    8th Aug 2019
    1:15pm
    I knew I was inviting the ire from some posters. You need to read my post in the spirit it was intended.
    There's constant stories and complaints about how life has short changed some. You may want to spend more time on this website to see them.
    I was having a go at no one other than saying many who end up in caravan parks are not there because of circumstances. I've seen that in my time where people have spent their money all of their working lives and then wake up to retirement when the income stream stops. Its not pretty.
    Demanding statistics is an escape to avoid the realities of life inextratime. You may want to go find statistics which prove me wrong. Anecdotal evidence is not always 100% correct but its pretty close. I've been gathering that for 60 years. Sory if that offends you as no offence intended.
    Hope you are not struggling.
    Cheers
    sunnyOz
    8th Aug 2019
    11:27am
    I came across a lady living in a caravan park in her old van that no way could ever be made road worthy for road use. She had done the 'grey nomad' thing with her husband when they were in their late 50's - sold the house, hit the road, found casual jobs, etc. Then in their late 70's when jobs were hard to find, and body/car/caravan growing weary, her husband took ill and passed away within 12 months.
    So she found a caravan park and put down roots. At first was good - but now in her mid 80's, the novelty of going to the communal amenities block 3/4 times during a freezing night has well and truly worn off. Plus now there are young druggies and drunkeds, refugees and those with mental illness living in the park, and she feels extremely unsafe. However, I was appalled to learn that she cannot put her name down for a Housing Commission place as she is regarded as 'owning her own residence'. She is classed as a home owner, so has to stay where she is. Plus - she is constantly scared of the park being sold and new owners getting rid if permanents, as has happened to so many other parks.
    I read and so of so many people selling their home and hitting the road - I personally think they are absolutely mad. To sell an value-increasing asset for a decreasing-value one borders on stupidity and madness. They will never be able to get back into the real estate market.
    I find it bad enough just staying at a caravan park - the thought of actually living in one - no.

    8th Aug 2019
    11:28am
    The major problem with living in a caravan park (some have fancier names) is when the owner decides to change the structure of the park or sells to someone with new ideas. The tenants have very few rights and in a lot of cases can be evicted with little notice. The units are very rarely a simple caravan which can be hooked up and towed to another site but in most cases are relocatable homes which require expensive removal costs.

    Finding another park which takes permanent residents can be a real problem as there may be none available within the area. Some councils dictate the percentage of permanents, semi-permanents and tourists which is another hurdle to overcome. Whilst the lifestyle appears ideal for some, there is the need to fully investigate the regulations and the tenure should there be a change of plans for the current or new owners.
    Mootnell
    8th Aug 2019
    3:41pm
    Which is why I sold my rental. One should never be dictated to on what you can and cannot do with your investment. If you don’t like the terms of the rental (wherever or whatever type) then don’t go into so typical that people now move in and then demand further rights.
    Not with standing tenants are fully entitled to good prompt maintenance and reasonable rental rates. Just as much as the landlord is entitled to well looked after property.
    MICK
    8th Aug 2019
    4:20pm
    On the money OM. Good we agree on something.
    we've both likely seen the stories where the owners of the park sell out to developers who promptly terminate leases. What the owners of portable homes never understand is they own the structure but no the land underneath it.
    People need to be more careful when they go into such arrangements rather than be unhappy when it ends badly, as it always does in a country with population growth. I often shake my head that people believe their prize spot is permanent. It never is.
    I thank the Lord that we are lucky enough to have a nice home in a majestic region. Likely your story is similar. Cheers
    veepee
    8th Aug 2019
    1:34pm
    There seem to be a variety of ways of living permanently in a caravan park. Some people live in caravans or mobile homes, others live in transportable homes. I believe there has been increased protection for the rights of residents, particularly in the transportable home parks, over the past decade or so. There are a number of benefits from living in these communities. Firstly, buying a transportable home does not involve stamp duty and, depending on how it is sold, no agents commission. Because the transfer is simple the legal costs should be minimal. For those who are eligible, rent assistance should make site fees as affordable as paying rates and other costs associated with owning a freehold or strata titled property. In some 'Lifestyle Parks' the cost of the transportable home is comparable with that of a small house or a unit, with the advantages of a community and the use of facilities such as swimming pools, gymnasiums etc in said park. So Mick, many people now choose this lifestyle rather than being forced into it. They have a manageable house and garden, a vibrant lifestyle and, should they wish to hit the road or go overseas, they have the security of a built in 'neighbourhood watch' with reciprocal arrangements for watering plants etc. It may not be the lifestyle for everyone, but it is a valid and increasingly popular choice.
    veepee
    8th Aug 2019
    1:55pm
    As a P.S to my last post, not all older Australians have had the opportunity to build substantial superannuation nest eggs. Selling their house to top up their retirement funds and downsizing to a Lifestyle Park or similar may be an attractive option. Furthermore, not all Australians have had the opportunity to build personal wealth on the back of massive house price increase. This is particularly the case in Regional towns and cities. It is unfair to criticize those who have possibly paid off a similar sized mortgage over 30 years to their city counterparts, made the same sacrifices and worked just as hard, but not reaped the same property value increases as city people.
    Cheezil61
    8th Aug 2019
    10:33pm
    To add to Veepee's reply, some have had property settlements to deal with after splitting/divorcing from a partner or partners (like me) & maybe cannot afford to pay a mortgage accordingly forever & give in to the "cheaper" ( & this is questionable anyway) option of a caravan/mobile home/campervan etc etc (as I've been considering for quite some time)
    Farside
    9th Aug 2019
    8:28am
    the important thing for people buying into "lifestyle" parks is that they go in with eyes wide open and across the fine print so they understand the entitlements, obligations and risks. Undoubtedly some of the newer parks are kicking goals in providing a good option for part-time nomads but there are also shonky and undercapitalised operators so caveat emptor.
    Cat
    8th Aug 2019
    4:02pm
    About that site hire - My father retired to a mobile home park in the United States, bought the mobile home but had to pay 'lot rent'. The lot rent was cheap at the outset, but over time it increased significantly along with the major hikes in electricity and other goods, but his pension did not. At the time he passed away the site owners increased the lot rent in one go from $200 per month to $250, and a $50 increase is alot for someone living solely off a pension. I didnt realise this until after his passing and when I did the math it became clear that it was an increasingly more difficult position to be over time. The mobile home itself also depreciated significantly in value because of the type of fabrication that does not hold its value like a regular house does.

    I don't know what the mobile home parks are like here in Oz in terms of this but the RTA has confirmed to me that in the regular rental market there are no rules limiting the frequency or amount of rent price increases. If people are considering going into a mobile home situation they need to make sure there is some kind of solid contract limiting the increases of the site hire so they don't get into a position where their pension is being eaten up by it. Even that would concern me because increases could be imposed another way such as with maintence fees etc. There is always the option of buying a small house in a cheaper area even if it needs inprovements at least your money is being used for your own gain. Although there are downsides like inconvenient location and no gated security but some of the mobile home parks don't offer gayed security anyway, and in some of the smaller towns there is better policing than in the city and metro areas.
    gerry
    8th Aug 2019
    4:18pm
    I was working for myself and asked if I could start super and was told I couldn't and was advised to take out allocated pension scheme ,I signed up with a firm and got a good return every year ,then it was taken over by Mercantile Mutual, then ING ,I wasn't told even tho a manager was taking fees,they lost 50% of my investment so I contacted acc they said I had a good chance but when all this bank enquiry started they washed their hands of me ,An employee with them told me they were so busy that they had to get rid of the minnows

    I have seen neighbours having BBqs and beer all the time,travelling overseas then Easter on Frazer with their giant SUV and boat, giant curved Tvs,PCs in every room,.phone for each member of the family,dogs that ate and had medical attention equal to the family
    Don't blame the government
    Go to most countries and there is no dole ,pensioners and dolies pick up paper and polish windscreens at the lights ,which I am prepared to do if I go over 90
    Cut out takeaways,internet deliveries and sell half the stuff you never use
    I, ll have to go outside ,there are 3 large trucks jammed in next doors drive trying to deliver 3 small Amazon parcels
    gerry
    8th Aug 2019
    4:18pm
    I was working for myself and asked if I could start super and was told I couldn't and was advised to take out allocated pension scheme ,I signed up with a firm and got a good return every year ,then it was taken over by Mercantile Mutual, then ING ,I wasn't told even tho a manager was taking fees,they lost 50% of my investment so I contacted acc they said I had a good chance but when all this bank enquiry started they washed their hands of me ,An employee with them told me they were so busy that they had to get rid of the minnows

    I have seen neighbours having BBqs and beer all the time,travelling overseas then Easter on Frazer with their giant SUV and boat, giant curved Tvs,PCs in every room,.phone for each member of the family,dogs that ate and had medical attention equal to the family
    Don't blame the government
    Go to most countries and there is no dole ,pensioners and dolies pick up paper and polish windscreens at the lights ,which I am prepared to do if I go over 90
    Cut out takeaways,internet deliveries and sell half the stuff you never use
    I, ll have to go outside ,there are 3 large trucks jammed in next doors drive trying to deliver 3 small Amazon parcels
    Triss
    8th Aug 2019
    4:36pm
    With the number of people, just on this loop, it seems to me that we need to be getting hold of the over 50s Australians. Many of them will be struggling to live like many of us have done and need to to be informed how they’re going to live after 65 and, if it’s not very well, they need to be looking at the pollies who have put them there.
    Kee
    8th Aug 2019
    6:30pm
    My husband and I deliberately chose to live in a van park,I did a lot of research to prepare us, we bought a place we could renovate and we have a 22foot caravan which is the kitchen and fully functional bathroom toilet and washing machine. We have in the fixed annexe a full sized lounge, bedroom and another room which is a godsend as it gives us more space than we need. We have all the mod cons and are the envy of a lot of our friends. It is like a community here, and we all get on with each other. Plus we also have a garden, very happy don't knock it until you try it, not for everybody. Also the park owners are more than accomodating, there is no nonsense tolerated and we live in the over 55s section
    Watto
    9th Aug 2019
    12:09am
    Kee Your missing the point old girl. Your " paradise " could change in an instant if the owner was bought out by a sleezy developer and you were given 4 weeks to get out.
    veepee
    9th Aug 2019
    10:28am
    Watto I remember that happening on a number of occasions in NSW some years back and it resulted in increased regulations for operators to protect residents. I think Queensland has increased protection for residents too. Pensioner Advocate Groups also seem to keep an eye on these operators, so hopefully the residents of most parks are secure. A lot of quite large parks now have a residential section because it provides them with an income in what for many is a very seasonal industry.
    Crimmo
    9th Aug 2019
    3:12pm
    If you don't rent your house out, it can continue to be treated as your principle place of residence for up to six years for tax purposes. This can be indefinite.
    Crimmo
    9th Aug 2019
    3:12pm
    If you don't rent your house out, it can continue to be treated as your principle place of residence for up to six years for tax purposes. This can be indefinite.
    Fair Dinkum
    9th Aug 2019
    4:23pm
    we lived in a van for about 6 years when first married and traveled extensively around this great country. this was great until the children started school then we stopped continuously travelling but kept the van for holidays . since the kids left home in a more modern van with toilet and shower we started travelling again and continue to do so . this is a great life but certainly would not swap my home for a mobile unit while in my approaching 80s.
    Fair Dinkum
    9th Aug 2019
    4:23pm
    we lived in a van for about 6 years when first married and traveled extensively around this great country. this was great until the children started school then we stopped continuously travelling but kept the van for holidays . since the kids left home in a more modern van with toilet and shower we started travelling again and continue to do so . this is a great life but certainly would not swap my home for a mobile unit while in my approaching 80s.