Are there exemptions for the rural land asset test?

Couple on a farm

A reader wants to know how Centrelink will assess the land he lives on. He doesn’t make any income from the land or plan to, but that’s not the only condition Centrelink has about the amount of land pensioners own.


Q. Bruce

My wife and I live on 2.7 hectares and have been here for three years.

We are both 56 years old and were wondering what we could do to ensure that the land over two hectares (0.4 hectares) would not be counted as an asset once we get to retirement age.

It is a lifestyle block and we can’t imagine ever making money from it.

A. Unfortunately for Bruce, Centrelink has some strict rules about land ownership.

Centrelink uses two tests to determine any payments, the assets test and the income test.

The assets test values your assets and the income test your income from a variety of sources including savings and investments.

The assets test includes items such as vehicles, furniture, collections, such as an art collection, and most pertinent for this reply, land.

Normally, only two hectares of land on the same title as your main home are exempt from the assets test.

There are some exemptions, but they will not cover Bruce’s situation.

Bruce and his wife must meet all the exemption criteria. They are:

Unfortunately, just considering how long Bruce and his wife have lived on the property alone, they will not meet the exemption criteria and when Bruce does in 17 years he will be well over Age Pension age.

Centrelink will make exceptions for the land-use test if the land, as Bruce suggests, is not really suitable for making an income.

However, as he does not meet any of the other criteria, even the small area of land he owns over the exempt two hectares will be assessed as an asset.

Centrelink uses current market value to assess properties, which is different from how councils and state governments value real estate.

Councils often include other taxes in rate notices including fire and ambulance services and water supply payments. This is why your council valuation will be different from your Centrelink valuation.

Centrelink values urban properties every year and vacant land, bush blocks, farms and hobby farms every two years.

Centrelink uses third-party valuers to provide indexed real estate market data by postcode.

If you disagree with the valuation you can contact Centrelink, which may provide an onsite, third-party valuation. This service is free.

You can also hire a private land valuer to provide a report if you wish to contest a valuation.

The only saving grace for Bruce is that such a small, unproductive area of land is likely not to be of much value.

Have you had your land assessed by Centrelink? Were you happy with the valuation? Why not share your experience in the comments section below?

Also read: How will my furniture affect the assets test?

Written by Jan Fisher

Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.

Leave a Reply

GIPHY App Key not set. Please check settings


  1. Thanks Jan, the trick in that example of John and Betty, is that they had lived on the land for more than 20 years. Alas we have only lived on our block for 12 years, so despite us lodging an appeal about not being able to make any money from our bush block, nor even subdivide it, they would not grant a pension. We are currently awaiting a new application a couple of years down the track as our funds are dwindling rapidly, but no doubt they will push the land asset way up over the threshold due to property prices rising. We had no idea about this when we retired and based our move on financial advise only to find out it was wrong. It makes me very upset, to think that many people can received a pension on properties worth way more than ours with the same assets. I’m writing this as a warning to others who yearn to live further out on a bush block. This land assets test is out of date and inequitable. I’ve written to ministers etc, but nobody is willing to challenge the old legislation that was specifically designed for farmers. One size does not fit all.

  2. Hi Jan, you say CentreLink will make exceptions for the land use test, if it’s not really suitable for making an income from. I have found this is not the case. We cannot make an income from our bush block, nor subdivide it, yet they rejected our protest regarding this. We did challenge the decision, but no, they would not budge. Can you explain more about your statement please.

    • Hi Murmur, I could not possibly comment on a Centrelink ruling, I simply do not have all the details or the skillset. However, Services Australia gives this below example on its website that may cover your situation that you may be able to use in an appeal:

      Betty and Jim moved to their 5 hectare, single title rural residential block 21 years ago. The block is scrubby, with no water. There’s not much scope to earn income from it and the council won’t let them subdivide it. This means the whole property is exempt from their assets tests.

      If you do not agree with a Centrelink ruling, you have the right to appeal. There is some advice here. I’m not sure how serious you are about appealing the decision, but if you are, I would get on it soon as there are time limits.

Blood flow restriction may help relieve arthritis

Brain Image of a stroke

Stroke can have a ‘profound’ psychological impact – here’s why emotional support is vital