Can you access the Pension Loan Scheme in a retirement unit?

Lyn wants to know if her life-long lease prevents her from accessing the PLS.

Can you access the Pension Loan Scheme in a retirement unit?

Lyn wants to know if her life-long lease prevents her from accessing the Pension Loan Scheme (PLS).


Q. Lyn
I had to sell the family home when my husband was put into a nursing home. With the money, I bought into a retirement unit, which means I actually have a life-long lease on the unit, but I do not own the land. Would I be entitled to receive a loan under the Pension Loan Scheme? I paid over $400,000 for the unit as well as for extras (like fence for dog $3800, second air conditioner $2000 and whirlybirds for the roof). Like many in my position who lease these unit, it would be interesting to know if we are entitled to supplementing our income.

A. The Pension Loan Scheme is essentially a form of reverse mortgage that allows older Australians to access the equity in their home and to improve their standard of living in retirement by receiving additional fortnightly payments from Centrelink in the form of a loan.

The loan needs to be adequately secured against a real estate asset to make sure that it can be repaid.

The home that the loan is secured against can be the home you live in or an investment property. If you have more than one property, you can choose which to use as security for the loan.

However, a person must own the property and have their name on the title to be eligible for the loan.

This means that people in a retirement village who have ownership (freehold title) of their premises will be eligible for a loan under the scheme, while those with a leasehold, like yourself, will not be eligible.

Are you eligible for an Age Pension? Do you know your rights? The RetirePlanner™ tool has all the information you need.

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    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.


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    2nd Aug 2019
    Are strata title units eligible?
    2nd Aug 2019
    Yes they are.
    2nd Aug 2019
    Can you please clarify the position of those living in a 'retirement village' where they have a title with their name on it. Although their name is on the title they do not have 100% control of the property, there is a village operator with a registered interest in that title. Any actions in relation to that title cannot happen without the involvement of the operator. This situation is very different to the normal residential property ownership where the title is 100% controlled by the names on the title. Would a village operator give approval for this type of transaction which involves the title for security?

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