Off-setting rental income

Font Size:

Judith is considering moving closer to family for medical care and assistance. As she has not been able to sell her home, she would like to know what are the implications on her Age Pension of any rental income she receives.

Q. Judith

Due to chronic illness and disability, my husband and I have been trying to sell our home in a rural town for two years to move closer to family, medical care, and assistance. Despite trying for 12 months, we have been unable to sell our home and have been advised by some to rent out the house. However, I am told that rental income will affect our part-pension payment. This will be counted as income, even though this ‘gain’ would be more than offset by the higher we rental would have to pay in the location to which we would need to move.  
Can you offer clarification please?  In the current financial climate there must be many others in similar positions.

A. Provided by Centrelink.

The rent paid on the new house is not allowed as a deduction against the rental income received from the previous home under either taxation or social security law.

What can be deducted from the rental income are the usual expenses such as rates and taxes, maintenance etc. Before considering a move, it would be worthwhile to discuss your situation with a Centrelink Financial Services officer. You can make an appointment by calling 13 23 00.

Join YourLifeChoices today
and get this free eBook!

By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy


Total Comments: 6
  1. 0

    What Centrelink neglects to inform you is that, not only are you not allowed to cover any of your own outgoing rental expenses with your rental income, but you will not be entitled to any rent assistance because “you own your own home”. While the maximum rent assistance is just $60 a week for a single person it is actually worth $120 to you (per week) as you lose 50 cents in the dollar of your rental income it takes $120 to replace it. Also the $60 rent assistance is not taxable but the $120 you need to replace it with is!!! I am in the same situation, I am allowed a third of the rental income as expenses. But it is an old house that brings in a very small rent and is in constant need of repairs. A third of the income doesn’t come close to covering my annual outgoings. I get to keep $100 a week which has to cover all the wear and tear of the tenants plus any repairs and maintenance. I have to pay my own rental expenses in full without any rental assistance. I am worse off than someone that hasn’t aspired to own anything.

  2. 0

    Judith, is there any chance that you can sell your home to a member of the family, at a slightly more “favourable” price than on the open market and allow them to maybe negatively gear that property themselves. This will “resolve” all of those rental issues that are so disadvantageous and with the price that you get, will give you a nice nest egg and entitlement to the rental assistance.
    It sounds as if the price of your home would not significantly affect your pension under the assets test. Frankly, at your age and with that chronic illness and disability, the LAST thing that you want is to become a landlady!!
    Alternatively, would reducing your asking price facilitate the sale? Sometimes it is best to take the best reasonable price on offer and to walk away leaving all of those problems behind you and enable you to get on with your life. Don’t let emotion cloud your thoughts when it comes to selling your home. Those extra few dollars are simply not worth it in the end. Talk to your local Accountant before you do anything else.

  3. 0

    Disgusted, You are allowed rent assistance if you own your own home but only if you are not renting your home and that you have been away from it for 12 months.
    We have been on the road for over 2 years and have no trouble getting rent assistance and have family looking after our home.

  4. 0

    Judith, I have heard economists and property advisors say recently that house prices are going to start going up in the near future. Maybe if you can hang on a while longer your property will sell, especially if you can drop the price to a bit below market price. Unfortunately, one can never predict accurately how these things will really go. That said, the trends are always moving one way or another so everything eventually comes your way.

    A few words of wisdom from a life-time renter, do not use an agent unless you really need to. They do not really do anything except collect the rent and should never be trusted to make decisions about repairs and maintenance. Too often the jobs go to family and friends regardless of the price. Always rent to an older couple with no children and no pets. Although I have brought up three children and many pets in rental accommodation nearly every owner has told me they wished I was staying because I was so unique a tenant in that I treated their houses as my own. Most people these days have no care or responsibility towards other people’s property. And lastly, try to rent to low income people if you can find some with good references which of course you must check thoroughly. These people have a lot of trouble finding decent accommodation at a price they can afford and know the value of a good landlord. The prejudice against low income earners and people on benefits is often and possibly most of the time unwarranted. Their appreciation of another’s property can be much greater than to some who have everything the need AND want.

  5. 0

    I used to own properties etc and also lived in the best suburbs……however when changes came with my marriage I wasnt left enough to start again on my own buying another house…I also have been renting now for some years and have excellent credentials and references for the two houses I rented both over a period of 7 years each one…The landlords were more than pleased with me and in keeping my rent the same..yes the same for those 7 years in each one…indeed those houses were in a much better state of repair than when I moved into them…one daughter really had the jitters me moving into the second home as she called is sitting in a sandpit..however with a little tlc and know how I soon restored garden and house into something very well worthwhile…The second house was advertised as an English Country Cottage and sold very quickly to a very happy person, the neighbour next door…..I will agree though that some renters arent so careful etc… girls owned a beautiful extra unit in another lovely suburb and there wasnt trouble with the tenants…it was a council oon Body Corporate who caused us the grief…ringing my girl and saying loud parties were occurring (not true) and other silly things so to end it all the place was sold…..and forgotten…I would have moved in myself and not pay only a token rent to keep the value going but with a body corporate Council of elderlie ladies I couldnt possiobly see myself putting up with such silliness……lolololol

    • 0

      I do agree not all families have to live with these things but now I feel living where I am extremely lucky although there have been the skirmishes over the years 11yrs) and again older people behaving as if they never had such a beautiful place to live in before(maybe they hadnt) but as was said on the TV news tonight some of these Govt tenants are something to be dealt with unfortunately…we had a letter sent here to each tenant to calm down, behave ourselves (I wasn t involved myself and a few others out of 22) or action would be taken for the removal of said tenants…indeed some of these loud sparks owned luxury caravans, holidays overseas and collecting in more than one senior pension……and could well afford private rentals…believe me there is always something to find in the way of rental if you have good credentials……



continue reading


How to … fall back asleep

Waking up at night and struggling to get back to sleep can be stressful and exhausting. According to WebMB, around...


Curing the incurable: Why some patients make astounding recoveries

As a GP and someone who works in the holistic health field, Dr Jerry Thompson has long been interested in...


The 'ism' that's rife and no, it's not okay

Ageism, like all 'isms', creates a social hierarchy and disadvantages people based on an aspect of their diversity. Compared to...


When conversations become a competition

Australia has a well-deserved reputation for being a very competitive nation on the world stage. Perhaps it dates back to...


Wakey wakey - a history of alarm clocks

Matthew S. Champion, Australian Catholic University Australians are returning to our normal rhythms. The first beats of the day are...


The top-selling-souvenir from every country in the world

Do you buy souvenirs to remember your overseas holidays? If so, we imagine you have been looking at these very...


ACCC to keep a keen eye on travel issues this year

Australia's consumer watchdog expects to have its hands busy dealing with COVID-affected travel complaints this year. In his annual address...


Cruisers turn to superyachts to satisfy their cruise cravings

Typically, Australia is one of, if not, the biggest cruise market in the world. It wasn't so long ago that...