Centrelink Q&A: How will home sales affect Age Pension?

Age pensioners Kevin and his partner have bought a house together. What now?

How will home sales affect pension?

Kevin and his partner are in the process of selling their homes and moving in together. What will this mean for their Age Pension payments?

Q. Kevin
I have sold my home and have bought another house with my partner. She has also sold her unit and, after settlement, will move to our new address. At that point, we will advise Centrelink that we will be living together at the same address in a house we jointly own.

We are both full single pensioners at this time and understand that we will be transferred to the couple rate once we begin to live together. After settlement, our combined savings will amount to about $170,000. Will this mean a reduction in our pensions?

A. Centrelink assesses your eligibility for the Age Pension by applying the rules of the income and assets tests, and then paying the lower resulting amount of the two calculations.

When you advise Centrelink that you are living as a couple, you will be assessed as such. The maximum base rate per fortnight for a single age pensioner is $814 and for each member of a couple $613.60.

For a homeowner couple to receive full Age Pensions, they must have no more than a maximum of $380,500 in assets combined and no more than $837,000 to receive part-Age Pensions. Your Age Pension is reduced by $3 for every $1000 you exceed the asset limit.

You and your partner should make an appointment to see a Centrelink Financial Information Services officer to discuss your situation.

If you have a Centrelink question, please send it to newsletters@yourlifechoices.com.au and we’ll do our best to answer it for you.

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    COMMENTS

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    Ian
    18th Jun 2018
    11:46am
    "Your Age Pension is reduced by $3 for every $1000 you exceed the asset limit." That is wrong but also right what is not included is the deeming rate 3.25% so for every $1000 Now you have an earning of $32.5 per $1000 so now you loss $3 per $1000 plus some for the income
    Greg
    19th Jun 2018
    11:29pm
    You lost me Ian - pension is reduced by $3 for every $1000 over the asset limit (currently $380500), the deeming rate has nothing to do with it unless the income from work/deeming means a lower pension amount THEN the pension is calculated on the Income Limits.

    So in fact YLC is correct.
    HarrysOpinion
    18th Jun 2018
    12:46pm
    If you were a single homeowner (without the $170,000) your pension will be $908 per fortnight (pf).
    The same as above but with $170,000 in bank. Your pension will be $887 pf.
    Couple home owner with $170,000 in bank will reduce your pension to $684 pf each.
    Rule of thumb-Anything over $157,000 will be subject to Deeming Income Rule-
    Andy
    18th Jun 2018
    1:09pm
    interesting I live in Thailand, and I just sold my house in Aust. it was a 5acre property I have just lost one leg. but what I have found very interesting is I tried to open a new bank account in Australia guess what you can not you have to return to Australia but here is the big one according to the banks I am paid $5,000 a year under the poverty line yes that is right, so the government know this and are keeping quiet about it, I think it only right that the gov. rise our pay these are the figures I am paid $20,000 a year bank poverty line is $25.000 what makes that you cannot open a credit card account if you earn under $25.000 in Australia.
    Cowboy Jim
    18th Jun 2018
    2:24pm
    There is a difference between a bank account and a credit card account. Try to get a savings account with an international debit card which I have currently. Costs a bit of money; if I wanted a credit card now I would not get it, only have one because I had one most of my working life. Pensioners - do not give away your credit card account because of the fees, you might not qualify for a new one!!
    MD
    18th Jun 2018
    2:42pm
    Sorry to hear about the leg Andy. Thailand must be interesting indeed to pass up the opportunity of Oz residence and you're being "paid" for the privilege to boot. Didn't sale of the house nett some return ? What do you mean by "paid"- do you realize income from another source, or does this refer to a social benefit ?

    Regardless of which, whether technically you are in fact "under the poverty line" or not, why in heavens name would you further exacerbate your problems by applying for a credit card ?
    You're either presently living comfortably over there or you're struggling to make ends meet in which case a credit card is unlikely to be a boon for you.
    Cowboy Jim
    18th Jun 2018
    3:48pm
    When it comes to a couple you might be considered a couple but you might not be in fact - you are better off staying as a single and share the digs. I know people doing exactly that, they were a couple for many years but in old age they are better off declaring themselves to be single: the difference in pension is roughly $5000 each. Only one claims rent assistance and it is quite OK. Do not know whether that is the way C'Link sees it but that is the way things are working.
    patti
    18th Jun 2018
    4:48pm
    Obviously it costs more for one person to live independently. It costs the same to have the light on however many people are in the room. I have found that the only real saving is on food costs - everything else costs the same as when I had my partner living here.
    Cowboy Jim
    18th Jun 2018
    6:13pm
    Patti - you and your partner might always be in the same room, the two us us are not; after 10 pm yes maybe, as we share a bedroom but during the day we are hardly in the same spot. Also I go out to my places and she does to hers, we might meet for lunch. Might save on cooking but only electric costs, we both still have a good appetite and 2 pieces of salmon are still twice that of one.
    Your way of looking at things would have applied to my Mom and Dad, the TV on, the old man having a beer and Mom a cup of tea and the lights on in one room. Times DO have changed.