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