Centrelink asset classes

Maureen is contemplating a move to over 50s accommodation.

Centrelink asset classes

YOURLifeChoices subscriber Maureen is contemplating a move to over 50s accommodation but is concerned about how Centrelink will view this asset.

Q. Maureen
I am a little confused in regards to what Centrelink classes as an asset etc.

I am selling my home to then buy into an over 50s lifestyle village. The cost of the house is approx $350,000 with rent etc being $128.50 per fortnight, with no certificate of title on the land etc. I have no other investments and only have approx $6,500 in savings, no Super. I may have $20,000 left out of the sale of my current home after expenses.

I will not qualify for the pension for another 18 months, have a part-time job (3 days), and wish to continue working part-time in the future for quite some time.

My question is, in these economic times, if I am unable to remain employed, I know I can go on Newstart. However, when my home sells and I buy into the over 50s this year, when I do reach pension age, if no job, how will the property affect my pension. The complex is such that pensioners do receive rent assistance but would I be penalised in the future, counting my new residence as an asset? Just have a fear in moving in case I stuff my future up, and need reassurance that Centrelink can be of assistance should things go wrong.

A. Provided by Centrelink
If you decide to take up residence in a retirement or lifestyle village, Centrelink will assess your eligibility for payments by considering what you have paid and what kind of accommodation you have bought into.

Some kinds of accommodation are assessed differently so it's important to contact Centrelink directly to discuss your individual circumstances.

When you are assessed under the assets test your home ownership status is determined by the amount of entry contribution you have paid. This entry contribution is the initial amount you must pay when moving in to a retirement or lifestyle village and does not include ongoing costs such as general service or maintenance fees which are payable on a regular basis. The entry contribution is not subject to deeming provisions.
The entry contribution is compared with an amount called the ‘extra allowable amount’ that is the difference between the assets level for a homeowner and non-homeowner. The current extra allowable amount is $131,500.

If the entry contribution you have paid is greater than the extra allowable amount, you are considered to be a homeowner and are therefore not eligible for Rent Assistance. In this case the amount you pay as an entry contribution is not included as an asset under the assets test.

If the entry contribution you have paid is equal to or less than the extra allowable amount, you are considered to be a non-homeowner and the amount paid is classed as an asset. You may be eligible for Rent Assistance.

For more information and to discuss your individual circumstances, contact Centrelink on 13 2300.





    COMMENTS

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    fifi
    22nd May 2012
    10:01pm
    Hi Maureen, I feel I want to wave a large red warning flag to your plan to pay $350,000 for leasing into an over fifties lifestyle village. It certainly puts you out of range for rent assistance. Even if the 'extra allowable' rises you are locked in at the original decision. Aside from the $'s issue is the bigger picture of village life. My 8 yrs experience says you need to think through very carefully (over a lengthy period of time) and discuss with people who have lived the 'lifestyle.' Good luck.
    Golfer
    23rd Mar 2014
    12:51pm
    Hi Maureen, FIFO is quite right. Recently, about 12 months ago, friends sold their home and moved into an over 50s environment in a distant locality.
    They were excited and their friends were excited for them only to discover that whilst their new abode was wonderful there were residents in the estate that gained pleasure out of making lives miserable for other residents.
    It has got to the point where they want out (they have for nearly 6 months), they're locked in and absolutely hate where they live and generally hate life. They miss friends terribly and are terrified where they live.
    The moral of the story is to ensure you investigate everything before signing up. And that means speaking to several owners in the estate, reviewing minutes of body corporate meeting and whatever else it takes to ensure you don't get stuck with neighbors from hell.
    Anonymous
    12th Jul 2014
    12:00pm
    In the USA they'd just go get a gun......
    Golfer
    23rd Mar 2014
    12:53pm
    Pardon me Fifi I misspelt your name.
    MILA
    4th Sep 2015
    11:50am
    Retirement villages in Australia are plentiful and also EXPENSIVE. Moreoever, if one trys to "sell" the unit - apartment etc: not only has to be done via the ones who sold it to you who actually take a substantial PROFIT. You also got to pay for having the unit/flat painted + new carpets, etc. I visit some local Retirement Villages where I live and, yes, they are clean, well presented and suitable for .....I would say ......elders. I also have lunch with some friends from time to time and the food is far from good and bland: they have told me that they never get beef , steaks ....ec. Finally, check on the Management:many pretty unfriendly too1 They charge nicely for "the services they rendered": I do wonder what one really gets for those exhorbitant prices.Say no more!
    MILA
    4th Sep 2015
    11:52am
    Forgot to say.....IF one passes away.....: again, read the small print and ask first as your dear ones have to wait for a long time befoe any financial benefit come to their hands. $$$$$$$$$ makes the world go round....and Greed is everywhere. Good luck dear Maureen.