15th Aug 2018
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How the Pension Loan Scheme works to top up your pay
Author: Olga Galacho
Explained: get a pension top up

Part age pensioners or people who do not receive any income support pension because of the income or assets test are able to borrow instalments from the Government, under the Pension Loans Scheme (PLS).

The fortnightly payments are a top up to the level of a full Age Pension and any combined payments cannot be greater than a full Age Pension. If you already receive the maximum Age Pension, you are not eligible to apply for the PLS.

Known as a reverse equity mortgage, the loan is non-taxable and the term of the loan can be for a short time or an indefinite period. In order to borrow, a pensioner must use their home or other property as security.

A pensioner cannot borrow more than the worth of their house. That is, they cannot leave a debt behind for someone else to pay.

While the loans will be secured against a pensioner’s home, the amounts borrowed do not have to be paid back until the property is sold. However, if a recipient’s circumstances change, they may have to pay the loan back sooner.

The borrowings cannot be a lump sum as funds must be paid with the fortnightly pension. Any costs associated with setting up the loan must be paid by the applicant. An interest rate of 5.25 per cent will be charged. This is one percentage point cheaper than reverse mortgages on the market and considerably less than the lowest interest rate for a personal loan of 7.65 per cent, according to comparison site Canstar.

To be eligible for a PLS loan, you need to meet the following criteria:

  • receive less than the maximum rate of income support pension or no pension, but be notionally assessed under either the income or assets tests at a rate greater than nil
  • be of Age Pension age
  • if you are part of a couple, your partner must receive a rate of payment that is less than the maximum amount or nothing due to either the income or assets test, but not both
  • have sufficient property in Australia that you can offer as security for the loan.

In this year’s Federal Budget 2018, the Government extended the scope of the Pension Loans Scheme (PLS) so that more older Australians would become eligible to borrow through it.

From 1 July next year, Australians of retirement age will be able to top up their entitlements, whether or not they are part or full pension recipients or self-funded retirees.

For more information, visit the Department of Human Services.

Would you consider taking out a pension loan to top up your payments? Would you prefer to continue living frugally so that you can pass on a debt-free home to your children? Do you think that the Federal Government should play the mortgage market this way?

Are you eligible for an Age Pension? Do you know your rights? The RetirePlanner™ tool has all the information you need.

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    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

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    15th Aug 2018
    10:06am
    I can foresee another financial mess in the making for both the government and the individuals taking out such loans
    And a waste of taxpayer money to administer
    MICK
    15th Aug 2018
    10:11am
    Reverse mortgage Olga? You should be ashamed of yourself trying to flog this bad product to retirees. The government may see this as desirable but then the government is all about AVOIDING paying Australians with any assets a pension and getting them to live off now the family home and leave their children and grandchildren nothing.
    There is an election coming and I hope that even the mentally challenged amongst us will remember the many lies, deceit and movement of money into the bank account of the rich....who have zero need of government handouts.
    My advice to anybody thinking about taking up such an offer is AVOID IT. You'll be sorry. If not you your children certainly will.
    Anonymous
    15th Aug 2018
    10:29am
    This is a labor scheme Mick
    Another one of their silly ideas
    You know the ones, right next to removing universal pension and raising pension age to 70
    Cowboy Jim
    15th Aug 2018
    10:30am
    There are most probably a few post codes where that scheme is available like is the case with commercial reverse mortgages. So people in Sydney, Melbourne and Brisbane's more salubrious locations can apply. Try getting one in Dubbo.
    MICK
    15th Aug 2018
    10:48am
    I am unaware who invented it. All I know is that the current crop are flogging it and the reason is as plain as the nose on your face. One only has to look at the ferocity at which this government has come after retirees to see the intent. Disgraceful.
    George
    15th Aug 2018
    1:03pm
    Yes, not sure why this disgusting scheme is AGAIN being promoted, when it is known to be a BAD idea, as most seem to agree here.

    Also, yes, BOTH Labor and Liberal act as a Tag Team - with one introducing an attack on retirees and the other extending it!
    In this case, it is particularly disgusting as the Libs cut pensions by revising the Assets Test in Jan 2017, and now want to profit from the same people they attacked!!!
    Old Man
    15th Aug 2018
    1:13pm
    MICK, it's interesting how you are so quick to condemn the government about the PLS but when you are advised that Labor thought of it, you plead ignorance but still continue to rubbish the government for trying to make it more available to pensioners.

    "The PLS was first established in 1985 when the Hawke Government re-introduced an assets test for the Age Pension, and other pensions. Take-up of the scheme has always been limited, despite the Keating Government broadening eligibility in 1996."

    It seems that as the election date gets closer, MICK, that you have amped up the pro-Labor rhetoric. Are you a script writer for Labor or do you have access to one? This bit, stated without any proof, is what can be heard any day that Question Time is broadcast: "the many lies, deceit and movement of money into the bank account of the rich....who have zero need of government handouts."
    MICK
    15th Aug 2018
    1:34pm
    I am being 100% honest OM. I don't know whose brain child this policy was and no matter which side of politics it came from I will condemn it.
    The rest of your post is the normal right wing tool of accusing others of what you do. Your government does this all the time. Not too long ago they went Labor about waging a 'class war' when the policies of this lot are what class wars are made of.
    The fact that you start writing this sort of BS is an indication to me that an election is not too far away. The media is already starting to groom the government and restricting and editing Labor comment. Watch 7 or 9 News and then flip over to SBS and ABC to see the same topic with a real comment from Labor. Puts a totally different spin on it.

    For the record accuse all you like. I don't write anything for Labor but will be doing my utmost to ensure that the worst and most dangerous government to democracy in my lifetime is sent out of office in a big way. I have to feel sorry for you as there was a time I considered you are fair and thinking person rather than a tool of this government.
    Old Man
    15th Aug 2018
    3:28pm
    Thanks MICK, you have just confirmed my accusation. A typical Labor response where the question of proof of a comment has been totally ignored and, instead, attack the person who asked for the proof. You claim not to write anything for Labor yet you ask all and sundry to get rid of this government. Blind Freddy can see that the only other alternative to this government is Labor.

    As I have stated here on numerous occasions, all I ask for is the proof to back up ridiculous comments. If that makes me a supporter of a particular side then so be it. What I don't do is go onto personal attacks or name calling or advocating anyone votes for a particular party. I get annoyed with people who tell lies.
    MICK
    15th Aug 2018
    4:51pm
    Actually you constantly demand proof whilst rarely providing any on your own statements. When proof is given you do not respond.
    The only thing confirmed is that you are pushing the right wing agenda and ramping up with an election coming. Always the same. Watch 7 or 9 News in the last 4 weeks of the election campaign and you'll get me gist....as if you are not aware of how the media works at election time.
    As always we'll have to agree to disagree.
    Lark Force
    15th Aug 2018
    10:24am
    Downsizers be aware that if you downsize to a retirement village where you don't have title to the land your unit sits on, you can't use that home as security against the loan.
    Downsize to a more expensive home, that gets rid of some your wealth into a non assessed asset. Putting spare money from downsizing into super increases your assets.
    MICK
    15th Aug 2018
    10:50am
    Better still don't downsize at all. This is a trap for the mentally challenged. Once caught those who partake will spend their money and be wailing about poverty. Guaranteed.
    Rosret
    15th Aug 2018
    11:59am
    That is so true MICK. Downsizing doesn't save very much and it may very mean the loss of a part pension.
    Body corporate fees are huge of course if they intend to live in a fancy more expensive unit with all the bells and whistles - then go for it.
    MICK
    15th Aug 2018
    1:19pm
    The party only lasts for a short time and if inflation again kicks in there goes the money as outgoings rise.
    Reverse mortgages may have been flogged on TV but people need to think long term rather than next week. Sadly many of us cannot do that.
    floss
    15th Aug 2018
    11:12am
    Would have to agree Mick,where did that other fool come from.
    OnlyGenuineRainey
    15th Aug 2018
    11:17am
    Yet more evidence of the utter STUPIDITY of the IDIOTS making policy! Take a loan at over 5% to achieve an adequate income, and leave your heirs only a portion of your home, or UPSIZE and get a higher pension with no repayment liability and no worry about how much of your children's inheritance the government will steal. Which would you choose?

    Honestly, only a blithering IDIOT would borrow when the income increase can be so easily secured by simply upsizing to a more expensive home, with no worries about loan security or interest costs! A

    Why are these MORONS in power being paid so well to make such DUMB policy decisions, when anyone with half a brain and two ounces of common sense can see the simple and obvious solutions, and anyone with half a brain can readily see how to manipulate the system to their own unfair advantage?
    OnlyGenuineRainey
    15th Aug 2018
    11:19am
    On the other hand, alarm bells should be sounding loudly. Why would the government be looking at ways to ensure retirees have adequate income unless it was totally committed to slashing pensions further? Wait for it, friends. It's coming - and Mick, don't fool yourself into thinking Labor will do anything different. Both parties are pursuing the same selfish objectives - transferring wealth to the rich and progressing social engineering to grind the middle and lower classes into increasing hardship and subservience.
    MICK
    15th Aug 2018
    11:22am
    It's a trap OGR. More money taken out of the pension = more money available to hand out to the wealthy who have no need of it other than their own greed. That is what the current government is doing and only the idiots amongst us, few hopefully, would be taken in by the feel good rhetoric.
    As the old saying goes 'a fool and his money are quickly parted'.
    Anonymous
    15th Aug 2018
    11:27am
    Oh for heavens sake stop the scaremongering
    This scheme is for those who are not on a full pension or no pension at all
    If you want extra income - this is an option
    You don’t need to access it
    HS
    15th Aug 2018
    12:35pm
    Has anyone noticed that Old Geezer has disappeared and olbaid taken over the "soap box" ?
    MICK
    15th Aug 2018
    1:21pm
    Yeah HS. I have asked YLC to stop posters changing names before but to no avail.
    You are likely right about olbaid. Not the only one of course.
    Anonymous
    15th Aug 2018
    2:30pm
    Old Geezer is on a fully self funded cruise which is no doubt also filled with mainly OAP's on full pension spending their savings
    MICK
    15th Aug 2018
    4:52pm
    BS! How would you know that. HS has it right.
    OnlyGenuineRainey
    15th Aug 2018
    9:36pm
    Also noticed that olbaid peddles the same LNP propaganda as Old Geezer did? Coincidence?

    Yes Mick. How would he know - unless he IS OG.
    OnlyGenuineRainey
    15th Aug 2018
    9:41pm
    Olbaid, whether or not one has to avail themselves of the scheme is irrelevant. It is yet more evidence of government incompetence and STUPID policy. The OAP system is hopelessly inefficient, uneconomical and inequitable. We don't need yet another STUPID policy to try to excuse the mess. We need the system FIXED by people with INTELLIGENCE AND COMMON SENSE. Sensible Australians will continue to lobby for sensible reform. Only self-opinionated/self-interested fools endorse or excuse policies that are harmful to the nation.
    KB
    15th Aug 2018
    11:18am
    Better to be debt free of t any government loans /Learn to be frugal and live within your means Government will still take out what is legally their money.
    Priscilla
    15th Aug 2018
    11:19am
    Pity we can't get 5.25% interest on our savings at the bank. As usual this scheme is daylight robbery.
    Farside
    17th Aug 2018
    12:47pm
    Government could fund this at little or no cost if it accepted deposits at 50 points below the rate charged.
    john no
    15th Aug 2018
    11:21am
    If the Aged Pension is Well Fare as no one has contributed into a pension fund, a L.N.P. Cabinet members view, What would you call this, If the unions should not be running Superannuation should the Government be lending money?, should not the Finance industries be doing this?
    Cowboy Jim
    15th Aug 2018
    11:39am
    Private Finance is already doing this but only for selected post codes, just have a look at the explanation of the offers. On top of all that you are obliged to keep the place in good repair and you will have inspections like as if you were a tenant. Stupid, should not even be considered by anyone.
    MICK
    15th Aug 2018
    1:22pm
    john no - is that you recycled heemsjerk?
    Rosret
    15th Aug 2018
    11:52am
    No. Reverse mortgage is not a good idea. It can leave spouses homeless, children with no inheritance. They probably would have been better off just helping out their parents when they needed financial assistance.

    Inheritance helps take away the financial burden on the welfare system and is often the saviour of women who have ended up at days end will very little.

    I would however like one of those little houses you have in the photograph!
    MICK
    15th Aug 2018
    1:24pm
    Agree Rosret but people these days have become self obsessed. You see it on Facebook and you hear it in the media. So leaving nix for the next generation does not come up. What a bunch many of us have become. Makes me ashamed to admit I am a boomer some days.

    15th Aug 2018
    12:58pm
    You know Mick, the rest of us are so lucky that we have access to your insightfulness, wisdom, and ability for seeing all life's problems as manifestations of the evils of the conservatives! God bless you, old son - the rest of us are so indebted!
    MICK
    15th Aug 2018
    1:25pm
    Conceited little snot aren't you Small Al. Go do your dirty work and good luck to you. Maybe tell readers who is paying your bills.
    Anonymous
    15th Aug 2018
    1:56pm
    Go ahead Mick, apply the smear - you Lefties are so good at that! Just like your beloved Juliar - call a bloke with a wife, 3 daughters and female chief of staff a misogynist - never mind the total inaccuracy of the label, as long as you get the smear right! And you call me 'Small"!!
    MICK
    15th Aug 2018
    4:57pm
    Smear? Ever watched Turnbull talking? Accusations against Shorten. That is both hatred and smear on steroids.
    Look up Emma Hussar. Read about her supposed crime. Then look at Darryn McGuire.
    Compare the two and tell me who got the airtime leading up to Super Saturday? Yes....Hussar almost every night whilst McGuire got 2 nights? Who had the real sin against the country????
    Obvious dear Watson. Spin it as you like but the facts are the facts.
    roy
    16th Aug 2018
    10:49am
    What an odious little man that MICK is.
    Triss
    15th Aug 2018
    1:16pm
    Call me cynical but if the government is offering something that it insists is beneficial for pensioners...run the other way. Learn from history, pensioners are the government's personal piggy bank.

    15th Aug 2018
    1:25pm
    Old Man, you forgot to mention that anyone who disagrees with Mick gets labelled a 'Troll" - whatever that is!
    MICK
    15th Aug 2018
    1:27pm
    YOU are. One only has to read your posts which are glowing advertisements for a crooked government which is heading out of office.
    Write what you will but I'll call out propaganda. Tough bickies if that offends you but no offence intended even if given.
    Old Man
    15th Aug 2018
    3:34pm
    Yes, you're right. MICK is quite the expert at labelling people. I have been called lots of things by MICK, so much so that I wonder if he was a member of the CFMEU. They too are expert at bullying.
    Aussiefrog
    15th Aug 2018
    4:34pm
    Neither labor or liberal will get a majority at the next election, ultra conservatives will hold the balance of power and will run the show.
    MICK
    15th Aug 2018
    5:00pm
    Remember about "smear" OM? You are doing a good job and I can see how similar your post is to some posters with other names. How many you got?
    Bullying? Watch Turnbull and Morrison in action in the parliament or being interviewed with the hard questions. Now that's bullying.
    Cheezil61
    15th Aug 2018
    1:56pm
    "Top Up Your Retirement Income: VERY MISLEADING - this is not income, its a loan!! Disgraceful! Just as others have said below!

    15th Aug 2018
    2:53pm
    Trust labor to come up with these schemes which are to the detriment of retirees
    First they remove Universal pension
    Then they try and get retirees to take loans out against their principal residence.
    Now they want to raise OAP eligibility age to 70
    AND not allow franking credits to retirees

    What's next?
    Bazza13
    15th Aug 2018
    4:32pm
    If you aren't on a pension or are on a part pension you have assets ( income stream, investments ) to live on, why would you need to top up you income this is just a waste of time. it is including the family home as an asset by stealth.
    MICK
    15th Aug 2018
    5:04pm
    It fits perfectly with this government's repeated attempts to get retirees to sell their homes and live off the funds.
    Not one coalition MP would ever consider this for themselves. It would be offensive to even suggest such a thing to them. That is how the rich and its government think though and for anybody else it is painted as acceptable. What it is is an attempt to defraud retirees doing it tough and take their homes away from them.

    I hope retirees remember this bad government when they vote. I will be.
    Anonymous
    15th Aug 2018
    5:17pm
    Mick , I repeat - this is a labor scheme AND it was labor that introduced the asset test
    MICK
    15th Aug 2018
    8:18pm
    I do not remember Labor coming after retirees when it was in government. I do not remember Labor lowering the assets test to catch the middle class. I do not remember Labor trying to include the family home in the assets test or wanting retirees to sell their homes and live off the proceeds.
    These are all from the current government. Please provide proof if I have this wrong.
    Greg
    15th Aug 2018
    10:21pm
    olbaid - this gov has been in for 5 years, never tried to stop the PLS and have now extended it further to 150%.
    Rae
    16th Aug 2018
    8:07am
    MICK Labor voted with the ALP and the Greens to pass the Legislation that slammed self funded retirees. It was so blatantly just an anti union ideology and nasty work not needed as it saved very little.

    All parties are infiltrated now by the Carpetbaggers and union haters and enemies of the Working family.

    We need a new party with genuine politicians not out for what they can get or working for huge banking organisations.
    Fliss
    15th Aug 2018
    6:26pm
    Sounds like an incredibly terrible idea.
    Hope no one ever does this!
    GrayComputing
    15th Aug 2018
    7:02pm
    It is time for all of us (that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    Does your MP really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

    We all need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    Also contact opposition and independent MPs (today) who could help us to get a fair deal on pensions

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    Cowboy Jim
    15th Aug 2018
    7:42pm
    I just would like retired pollies filling in their forms at C/L like the rest of us and tell them of all their investments, accounts etc. And then have an asset test. With those fantastic salaries they will surely have saved quite a bundle and so we could just give them the Senior Pension Card and no money. There might be fewer interested in future pre-selections for seats. And the ones finally getting in could be supporters of GrayComputings' ideas. Let's live in hope.
    MICK
    15th Aug 2018
    8:22pm
    GrayComputing - you are so right that paying a pension is small change when compared to giving rich people tax cuts or handing big business the same.
    The current government is owned by wealthy Australians and their business interests doing what its benefactors demand: give them more money. This is being funded by US. All of us. We need to get angry.
    Fliss
    15th Aug 2018
    8:31pm
    GrayComputing, everything you say is spot on!!

    Especially the costs incurred by CentreLink processing & checking pensioners' incomes & assets. Just give everyone the pension & save millions. Everyone has paid their taxes over their working lives - they are entitled to an "aged pension".
    tams
    15th Aug 2018
    8:07pm
    To Cowboy Jim,
    I know of at least 3 reverse mortgages available in Dubbo.

    To Rosret, sorry about your statement but when spouses are on title or co-borrowers, they have life tenancy

    For all the other negative comments about the Pension Loan Scheme and Reverse Mortgages.-

    The Government and the private market are NOT making older Australians access their equity to improve their lifestyle.

    Reading between the lines, the aged care industry and consumer bodies have been asking for a lower priced reverse mortgage better suited to all older Australians for some time. The reason they have sought this revised product is the supply of Home Care Packages and providing the resource whereby the consumer can contribute to the cost of care.
    MICK
    15th Aug 2018
    8:24pm
    If you have no kin then fine tams. If you do then shame.
    Most boomers received an inheritance. Your children deserve the same.
    Cowboy Jim
    15th Aug 2018
    8:56pm
    Agree with Mick, I have no kids and can spend the dough the way I see fit, inheritance has not arrived and I am past 70.
    Rae
    16th Aug 2018
    8:15am
    The aged care industry needs to pull it's head in and stop trying to make billionaires of the owners perhaps.

    Actually we need a disrupter. If Uber and AirB&B work then so would people teaming up to hire carers outside the current over priced institutions.

    Pay staff directly and cut out the middle men.

    A group of my friends have decided to build cabins on a small acreage and employ our own care staff. It will be much cheaper than paying $600 000 bonds and $128 a day board to the billionaire owner of a hostel.

    And our kids end up with a holiday camp they own together.
    Fliss
    16th Aug 2018
    8:28am
    You are sooooo right Rae.
    This year I helped my Dad move into Aged Care - huge RAD paid & then $108 per day. Crazy!
    The truely crazy part is that it would have been $90 per day (still huge .... $630 per week), but after asset testing it was increased by another $16 per day. This is because the RAD is counted as an asset - even though my Dad didn’t have enough funds to pay it & I PAID IT FOR HIM!
    tams
    16th Aug 2018
    8:31am
    To Rae,

    I will explain my comments o you are better informed.

    Home Care Packages provide services to older Australians so they can remain independent in their home.
    In funding those services, the Government contributes 96.3% of the cost of those services.
    That is unsustainable and, in providing the PLS, it will allow recipients to make a small contribution, so that existing funding can go further, especially to those who will not be required to contribute.
    tams
    16th Aug 2018
    8:36am
    To Fliss,

    With advice you might have considered paying daily. It seems from your comments that Dad did have some funding available. Nobody has to pay a lump sum.
    Fliss
    16th Aug 2018
    12:00pm
    Thanks tams, but no, definitely not better off paying the outstanding RAD amount per day - that would have been even more dollars.
    {I was a maths teacher - did all the maths before deciding what to do ;) }
    If you don't pay the full RAD then the outstanding amount is paid, as you say, as an extra daily amount. I don't recall right now the exact percentage charged but it is about 5.6%. So for example, if you don't pay the remaining $200,000 of a RAD, then your daily fee will increase by just over $30 per day. Where as by paying that extra $200,000 owing on the RAD, the assets test will increase the daily fee by $20 per day.
    tams
    16th Aug 2018
    2:29pm
    Agree with that Fliss, but it is offset by a lower/no means tested care fee.

    There are many options for aged care, from selling assets, borrowing to a mix of RADs DAP, and combination.

    As I have mentioned earlier, one day in the next 5-7 years, we will transition to everyone paying daily
    Fliss
    16th Aug 2018
    7:10pm
    tams, Dad is in a private Aged Care facility - we looked at about 8 places to choose this one - soooo much better than most - the daily fees are set - i.e. gvt amount (about $50) & "extra services" (about 40), totally $90 per day. If he didn't pay a RAD he would then be paying a huge extra daily fee, by paying the full RAD, daily fee only increased by $16.
    An interesting scenario - I asked CentreLink about a situation where someone was entering Aged Care & had no funds to pay a RAD needed of $800,000. But each of his 4 children loaned their father $200,000 each to cover the RAD. As crazy as it seems, in such a situation the person in care is deemed to have $800,000 in assets & their daily fee would increase by $29 per day, even though the RAD was a loan.
    tams
    16th Aug 2018
    7:47pm
    Fliss,
    We had a meeting with the Minister 18 months ago to raise the subject. We believe he understood but the Department refused to accept the concept of a liability against an asset - as with all other aspects of Australian rules. We believe this would have reduced the means tested care fee revenue.
    The Department so incorrectly forecast the revenue from means testing in 2014 and any further reduction would have affected their Budget. This may seemed absolutely stupid, but sometimes we arranged an aged care loan so that residents then have the asset position to enter the facility of their choice.

    Here is an important point for all associated with aged care.
    Two weeks ago the Government finally came out and advised providers they could only charge residents for extra/additional services for which residents are capable of and actually receiving. An itemised account must also be provided normally on a monthly basis).

    Hope this helps a lot of families
    Fliss
    16th Aug 2018
    9:49pm
    Hi tam. It most certainly would have reduced the means tested fee revenue for sure.

    That is really interesting that you say the gvt has advised providers that they can only charge residents for extra services that they are actually receiving. Wonder when they will start actually implementing it? Extra services usually includes things such as daily newspaper, magazines, beer or wine with meal, etc. A large number of these services are not taken up by many residents . . . . . wonder when it will be announced? Is there anywhere I can find this in writing on a gvt site that you know? Thanks Tam. :)
    tams
    16th Aug 2018
    10:16pm
    Hi Fliss

    This is what you are looking for

    The department will be working with industry and consumer peak bodies to review the additional service fees arrangements, improve clarity and understanding by residents and providers, and consider how additional services can best meet the needs of residents and providers now and in the future.

    In the interim, providers should continue to refer to the guidance available on the department’s website. These requirements will continue to apply while this work is underway.

    Providers should continue to only charge fees for additional services:
    • that provide a direct benefit to the resident, or
    • where the resident can take up or make use of the service.

    The services and fees must be agreed beforehand and residents must be given an itemised account.
    Department of Health
    OnlyGenuineRainey
    17th Aug 2018
    8:30pm
    Fliss, the nonsense situation you quote of someone paying more because a loan is treated as an asset denied a loved one the care her family wanted her to have in old age. The family were more than willing to extend loans to enable her to have better accommodation and care, but doing so not only resulted in her being assessed as having additional assets - and therefore able to pay more - but also meant the family lost income from investments but were still deemed by Centrelink to have the asset, as a loan is an asset. The result was that they simply could not afford to extend the loan their loved one needed. In other words, a cruel and grossly unfair system that double-counted money loaned to a loved one meant that the loved one was denied care and comfort in her final years. What a disgraceful system we have when government is that greedy!
    Fliss
    17th Aug 2018
    8:39pm
    Thanks tams . . . . :)

    And yes, OnlyGenuineRainey, you are right. It is a disgraceful system. When I suggested my fictitious scenario to the person at CentreLink, all they could do was agree with me that it was crazy, but that it is indeed the case. They suggested I make my concerns known to my local member of parliament. And a lady at DVA said to me "Please do. I will back you". But the system of Aged Care & all it entails has been stressful enough, & I don't have the energy.
    It is a disgraceful & broken system that needs a HUGE overhaul!
    Sundays
    15th Aug 2018
    8:15pm
    This Scheme only pays people fortnightly, no lump sum. It won’t help anyone who needs money for repairs and maintenance. A dreadful scheme which takes away security for those who worked hard to pay off the mortgage, and now have to draw down to have a few extra dollars.
    MICK
    15th Aug 2018
    8:25pm
    It is reprehensible and the government has no soul to implement such a scheme. Of course this does not affect any MPs in this government. Why am I not surprised.
    Anonymous
    15th Aug 2018
    8:26pm
    It was implemented by LABOR
    Cowboy Jim
    15th Aug 2018
    8:59pm
    Shorten will not change it either Mick, remember roll back just does not happen. Right it won't affect Govt MPs but neither does it the Opposition's MPs. If it's in we are stuck with it.
    tams
    15th Aug 2018
    9:55pm
    Please excuse me but I find most of the comments illogical, just presented by political opinions of "die in the wool" voters who have no competence to fully understand the ramification of their comments.

    Stop blaming politicians of either side and start looking for the betterment of the nation and its population.
    Greg
    15th Aug 2018
    10:23pm
    olbaid - and extended by the current government
    Dragrush
    15th Aug 2018
    11:41pm
    I think Olga has done a very good job in continuing to provide us with information on the changes to the PLS and I hope she continues to do . I would like to seen her comment on the ASIC calculator and how to get financial advice without paying an arm and a leg. However I am fed up with reading the comments from the same old whingers and regular knockers like Old Geezer Rayney ....surely he must be the biggest dope to add his drivel to these important forum topics as he clearly lacks understanding and has no ability to provide any worthwhile advice or solutions to the asset-rich --cash poor problem a lot of us have. If he and the other critics had bothered to make a few enquiries they would soon learn that the banking world does not give a rat's backside about what is good for an old person seeking how best to tap into the equity of their house which they are only doing because they need the money.
    I would say to people like OGR , Mick George and the others.....if you are all so bloody clever how about putting your hand up and lead us out of this dilemma we are facing and offer to organise or set up an anti- government vote to reinstate the asset levels to what they were before the change last year . Alas..... I suspect like most time wasters and tyre kickers they just like to waffle on but can offer us nothing because they dont have the intellectual capacity to think deeply enough about pensioners problems. Lets hope a pensioner messiah came to toiure aid soon.
    Dragrush
    15th Aug 2018
    11:53pm
    Sorry Mick....didnt mean to put your name in my rant. I like the way you approach this topic and would encourage you to keep on with it.
    OnlyGenuineRainey
    16th Aug 2018
    2:52pm
    Dragush, I have written countless letters to politicians and newspapers and lobby groups suggesting more sensible approaches to pension system reform. Sadly, nobody in power WANTS to fix a flawed system that benefits the wealthy manipulators and wins them the votes of the ignorant. Accusing me of 'tyre kicking' and 'waffle' is patently unfair and rude, because there is simply no way for the average citizen to make themselves heard above the roar of the self-interested powerful. The two-party system has us all screwed.

    You are offensive and inaccurate claiming I lack intellectual capacity to think deeply enough about pensioners' problems. I have advanced detailed proposals that would dramatically improve things for both ALL retirees and for taxpayers, and in particular improve conditions for pensioners. I don't lack ability to formulate solutions. I lack the POWER to have them considered, merely because the powerful have vested interests in NOT allowing consideration of real solutions.

    16th Aug 2018
    1:04am
    Don’t know what’s so hard to understand
    It’s a cheap option for those who want to use it
    If you don’t want it , don’t
    This government is making it more accessible and cheaper than labor did
    Instead of being appreciative , the knockers either simply don’t understand or choose not to
    Dragrush
    16th Aug 2018
    1:51am
    Olbaid....... the PLS is only suitable if you have enough equity in real estate (either an investment property or your main home ) to fund a compounding interest loan for possibly up to 20 years. My gripe is with having an asset that cannot be realised into cash unless it is by sale or a split ownership and so the PLS and Reverse Mortgage scheme by banks are the only 2 options currently on offer..... The Bendigo Bank has a home equity scheme that offers cash now in return for an agreed % share of the final sale price of your home but it is only available in inner Sydney or inner Melbourne. This is because of the larger house price changes in those areas.
    I would like to know why the government cannot come up with a similar workable scheme along the same lines regardless of where the security property is located. Is it because the dollars of profit made on sale wont be enough for the Government. There is plenty of stored cash from super funds that could be used to fund the type of government support but it all seems to hard and as pointed out the Liberals do not want to help old people keep their
    hard earned assets and it is almost a certainty that they will try and include the family home in the asset test next budget time.
    I do not think any one would quibble about agreeing to selling an agreed share of your home in advance if there was no compounding interest problem to worry about. If you think this would be a better way write to your local member and ask him to raise it with the Prime Minister.
    tams
    16th Aug 2018
    8:22am
    Hi Dragrush,

    The PLS will have limited appeal as it is currently designed as an income stream, and does not include a lump sum or Line of Credit option, which is taken up in 96% of reverse mortgage applications.

    It is very interesting to note that the interest reverse mortgages has almost doubled since the PLS announcement.


    I note the comment about Bendigo Bank equity release offering. It is only available in Sydney and Melbourne as it meets the requirement for an annual growth greater than 5% over long periods.

    It is also to be noted that, if the amount paid back at the end of 10 years was calculated as a principle and interest repayment, the interest rate would represent a rate of 9.5% - far higher than the PLS and reverse mortgages.
    OnlyGenuineRainey
    16th Aug 2018
    2:47pm
    Olbaid, I'll say it again! The STUPID government is offering a choice between hocking your assets and paying interest well above the rate most of us can earn, or getting the same income free of interest and without offering security merely by spending up big or buying a bigger house. That's what's WRONG with the IDIOTIC proposal you endorse. Nothing to do with whether or not people have to take advantage of it. It's all about offering a choice that rewards manipulators at taxpayer expense and, again, punishes the honest and responsible.
    Anonymous
    16th Aug 2018
    2:56pm
    Sorry Rainey - you're not making sense as usual.
    This scheme is for those who are self funded or on part pension

    Its designed to be useful for those who want to draw down their equity without leaving their home

    Its just an option made available to everyone. This government is making the scheme fairer by extending its scope to allow self funded retirees the same access as OAP's.
    The original scheme by labor is baltantly unfair. LnP has made it "universal"
    OnlyGenuineRainey
    16th Aug 2018
    6:09pm
    olbaid, you have a comprehension problem - big time! I know who the scheme is for and it's objective, but the alternative of upgrading the family home or taking an expensive cruise nets the same increase in income as the loan offers, WITHOUT hocking your assets and with no interest costs. THAT'S EVIDENCE OF AN INEPT GOVERNMENT. It doesn't matter which party is responsible. Creating it was dumb. Extending it is dumber. It would make far more sense to reform the pension system to make it efficient, economical, and fair.
    GrayComputing
    16th Aug 2018
    5:57pm
    It is time for all of us (that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    Does your MP really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

    We all need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    Also contact opposition and independent MPs (today) who could help us to get a fair deal on pensions

    NO ASSET TEST FOR A PENSION EVER AGAIN!


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