How does Centrelink assess overseas income?

Helen has an unusual asset overseas and wants to know how it will affect her pension application.

Q. Helen
I have been looking for answers on the Centrelink website, however there are some unclear areas I would like to understand.

I will retire when I turn 67 in June 2024. I have been a permanent resident in Australia since 2010 and I receive an age pension from the Czech Republic. However, I live in Australia and believe I may be eligible for a part pension once I reach retirement age.

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Firstly, will my Czech pension have an impact on me claiming the Age Pension in Australia? The second question I have is regarding my assets overseas. I am not the owner of property overseas, but I do own a share in a housing company, which is the owner of a title on the land register.

This arrangement works when a member sells his or her share in an apartment for the market value to another person. The buyer of the share becomes a member and pays some fees for his or her membership after confirmation by the company. The company then has a voting committee and operates on a similar principal to maintain the building with apartments and the common property. The point is that I don’t own the property, just shares in the management of it.

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In addition, my son lives in the apartment and it is not my investment making money. He pays these expenses. I own a one-bedroom unit in the community titles scheme in Australia, which is my main residency.

My plan is to sell the share before submitting my claim for the Age Pension. However, if I sell the share after I submit a claim for the Age Pension, how can I value that share for the assets test? There are the real estate agents who provide valuations of the market value (usually for free) or there are the professionals (not for free) overseas.

If I do not sell the share, because of a lack of interest, will the share still be included in the assets test?

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A. When working out your Australian pension entitlement, any income you receive from any source – including overseas income – is taken into consideration. This means that your Czech pension may affect how much Australian pension you receive as well as any income you receive from you share in the housing company you mention.

If you are receiving a foreign pension, this may affect the amount of Age Pension you receive. Centrelink uses a commercial exchange rate to work this out.

With regards to valuing your share of the housing company, the real estate agents who provide valuations of this for free should be sufficient when you are filling out your application for the Age Pension.

However, Centrelink may also provide their own valuation for the share in the company as it does sound like quite a complicated arrangement.

If you choose not to sell your interest in that share of the housing company, it does need to be included as an asset in the assets test regardless of the level of interest in the current market conditions, although this means it could have a lower value than what you originally paid for it.

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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 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 Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by Ben

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