YOURLifeChoices subscriber, Annemarie is not only unsure whether to switch to the Age Pension from Disability Support Pension(DSP) but also how the proceeds from the sale of her home will affect her Centrelink payments.
I am 64 this year so I will have the option to move from the DSP to the Age Pension. My only asset is the proceeds from the sale of my home in a retirement savings account. When I find a suitable house I will use this money to replace my home. I have just found out I need to do this by my birthday in November this year.
Can I ask Centrelink for an extension of time with my DSP and its 'unlimited' asset value? I may not be able to replace my home before the end of this year, with the current shortage in real estate.
Also, can you suggest to whom I can speak to arrange to remain on the DSP benefit with the 'unlimited' value for my home purchase money?
A. Provided by Centrelink
Centrelink writes to all DSP recipients prior to them turning Age Pension age and gives them the option of transferring to Age Pension, or remaining on the DSP. The letter provides information on the possible benefits or disadvantages of transferring.
If you are in receipt of an income support payment and you have sold your principal home, the portion of the proceeds that will be used for the new principal home may be exempt from the assets test for up to 12 months. This exemption may be extended for up to an additional 12 months if you are experiencing delays beyond your control.
This exemption is not affected by the type of income support payment you receive, therefore the portion of proceeds from sale of your principal residence will be treated the same way under the Age Pension and the Disability Support Pension. For more information, try our simple shortcut to Centrelink’s Exempt Asset page.
Keep in mind that while the principal home sale proceeds may be exempt from the asset test, they will be deemed to be earning interest and this amount will be included under the income test. For more information, try our simple shortcut to Centrelink's Deeming page
If the proceeds of your principal home sale are exempt, you are considered to be a homeowner and the homeowners’ assets test will apply to the remainder of your assessable assets. The usual income test will be applied. These tests are the same for Disability Support Pension and Age Pension. You can find out by clicking our simple shortcuts to Centrelink’s pages on Income test for pensioners and Asset test for pensioners.
If you feel you still need to talk to a ‘real’ person, why not make an appointment to see a Financial Information Service officer. To make an appointment, call 13 2300.
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