How does buying a home affect the Age Pension?

Centrelink regards your home as exempt from the asset test when assessing your eligibility for the Age Pension, but selling and buying a house has a YourLifeChoices member confused.


Q. Dorothy

My partner and I are 75 and we are both retired. We get a small part-pension.

I understand that if you sell your principal home to buy another you can take 12 months to do so without affecting the Centrelink asset test?

Ten years ago, we built a home to make living easier as we age. 

Read: How are life insurance policies assessed?

Then the global financial crisis took our business and we did not move but instead had tenants in the home we built.

We are now able to sell the two-storey home we are living in now and move to the one we built.

Unfortunately, after 10 years of tenants, repairs and upgrading are necessary.

From the sale of our home we should be able to have no mortgage and upgrade our new home.

Will Centrelink give us time to get this work done before we are re-assessed?

 A. When you’re receiving a payment or allowance from Centrelink, there are rules that apply if you are selling your home and are planning on buying or building another.

Read: What happens to your Age Pension if you win the lotto?

Any part of the money you receive from the sale that is likely to be used to purchase, renovate or build your new home is disregarded under the assets test for 12 months from the date of exchange of contracts.

However, the exemption can be extended to 24 months in certain circumstances such as the builder has been delayed or council permits have not come through.

You must notify Centrelink as soon as possible if you think you are going to need more than the allowed 12 months.

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