How does Centrelink assess caravans or campervans?

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Now that borders are opening around Australia, Brian and his wife are planning to live life on the road but are not sure how their living situation is assessed by Centrelink.

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Q. Brian
My wife and I have always loved travelling around Australia and our plan for retirement has always involved buying a caravan and just driving from place to place, stopping at different locations around the country and chasing the sun. Unfortunately, COVID put those plans on hold this year, but now that border restrictions are starting to ease around the country it is back on our agenda.

We are unclear, however, as to what the pension implications are of living out of a caravan. Could you please explain how Centrelink will assess our living situation?

A. There are a couple of Centrelink rules that apply to retirees accessing the full Age Pension and other benefits if they have a caravan park address.

If you own your current home, what you do with it will matter as it sounds like your caravan will become your place of primary residence. That means that your bricks and mortar home will be assessed under the assets test and possibly the income test if you decide to rent it out while you are on the road.

In these situations, Centrelink will apply the income test to any rent you are earning and the assets test to the home. As the house is no longer considered the primary place of residence, it becomes an asset and, depending on its value, will likely reduce the amount of Age Pension you receive.

If you decide to sell your home to fund your new lifestyle, you will have to think carefully about what you do with the money as Centrelink will factor in any extra cash into their decision on your Age Pension.

The money from the sale of your home will be treated as an asset and, if you invest it, it will also have deeming applied and the rate determined will also be applied in the income test.

Even if you sell your bricks and mortar home and replace it with a caravan, you will still be assessed as a homeowner.

Given the high cost of houses, and the relatively low cost of mobile homes, this means that most people who seek the ‘grey nomad’ lifestyle do have their pension payment rates affected in some way.

Caravanning groups have long campaigned for retirees who own a mobile home as their primary residence to be assessed as non-homeowners, but this has fallen on deaf ears from governments of both persuasions.

Have you ever considered selling up and moving into a relocatable home? Do you currently enjoy the nomad life on Australia’s roads? Would you recommend it to others? What pitfalls have you discovered?

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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.

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36 Comments

Total Comments: 36
  1. 0
    0

    Why is it that retirees are not entitled to enjoy their retirement after working and paying taxes for their entire adult life and yet politicians can cheat the system and retire in absolute comfort and continue to receive handouts until the end of their lives.

    • 0
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      Excellent question. A caravan should not be assessed as an assert. The POLITIANS have to be realistic and stop getting all the extras when retired. This LNP government are corrupt in every way and keep going for retirees.

    • 0
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      Joy Anne – nothing to do with the present Govt. The rules were there before and probably will be under a future ALP administration. A caravan is an asset, same as a fishing boat. A luxury car is an asset so why not a mobile home. Have friends with mobile homes worth more than my unit. Pollies are on a defined pension scheme and have nothing to do with Centrelink.

    • 0
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      Why should not be classed as an asset? It can be sold for cash just like a car. There is no difference!

    • 0
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      For the same reason that people who have had money through there lives and spent it instead of saving for retirement do get a pension. Apart from the gifting rules, it is all about current ability to support yourself. That is the problem with a one size fits all means test.

  2. 0
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    Not just the LNP…Labour had the opportunity to address this but failed to do so…as stated in the article.
    Blame the lot of them rather than expose your selective bias.

  3. 0
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    NO MORE ASSETS TEST FOR THE PENSION
    GET RID OFF ALL CENTER LINK INTERFERENCE
    Call your MP and the PM to kill off this expensive bureaucratic pension monster

    • 0
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      Agree with you Gray, heard you long and loud for a long time but things will never change till we can accept a universal pension scheme with ATO involvement. A lot of people would not like the new system either as the exemption of the family home would be a thing of the past. So when we keep mentioning the overseas pension schemes we have to keep that in mind. Property over there is part of their assets and taxable to a certain extent.

    • 0
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      I would be interested be interesting to know whether the cost of the bureaucracy is worth it ie what is the cost of administering the assets test compared to all the amounts of pension that the assets test reduces it by

  4. 0
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    I agree politicians should be governed by the same rules as everybody else regarding super/pensions but if people think it’s such a great lurk being a politician maybe you should consider running sometime rather than just bleating “oh woe is me” all the time.

    • 0
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      Those in Government are not making applications for the age pension. So why would the rules of the age pension apply to them? They don’t apply to anyone not wanting an age pension.

  5. 0
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    Ducky, you may well ask!!
    They propose the legislation and they pass the legislation that allows these wonderful perks for themselves.
    Meanwhile, you or I now need to keep up with the current rules regulations and changes regarding the Aged Pension. Who said retirement was carefree!
    Time for the Aged Pension to be called what it is….A workers RIGHT and not classed as welfare. Time for this RIGHT to be undisputed and available to all ex workers 65 and over who wish to claim their right to be supported in retirement at a time when their bodies are registering the signs of ageing and loss of ability to perform work in order to support themselves. (Yes, at age 65 and not 67).
    Think of the necessary paperwork, cross checking, assessing and investigation, and time presently required to process Pension Applications. Those processes would no longer be necessary to the same extent.
    Am I expecting too much from today’s society?

    • 0
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      Yes. And it was the ALP bringing in the asset and income test for age pensions (used to be called old age pension). Now it is welfare, not workers RIGHT like we were told when I started work in the 60s. Kevin Rudd (ALP) topped it up with the extra 2 years. Just to remind all these ALP people who constantly blame the current Govt on this site. Not wedded to either side and reckon they are both similar. GST was never rolled back under Kevin either despite Beasley’s promises when GST came in year 2000. Learn to live with them!

    • 0
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      “Learn to live with them”……To whom do you refer, Mariner?
      If you mean politicians, we have no other option.
      What we CAN do is to amalgamate and speak out openly about unfairness. Sometimes the powers that be need to be shamed into action.
      The other suggestion I make is that perhaps Politicians should also be made to wait until they turn 67 to collect their Pensions, and be subject to the Assets Test.
      Don’t you think that is fair?

    • 0
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      That would be fair but it will not happen because politicians have nothing to do with Centrelink. I presume their pensions are taxable because most of them have extra income anyway. Waiting to age 67 is a good idea, I grant you that, fewer would retire early if they had to wait like us!! Wish you luck to see that happen.

    • 0
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      Perhaps Politicians should be made to have their Pensions administered by Centrelink, then perhaps they could experience first hand the frustration we all experience when we need to contact Centrelink.

      If people accept things as they are, and don’t openly speak out about double standards through the available options we have, then nothing will ever change. How many times have we been told one thing pre-Election, only to see the elected government do a backflip once they are in power; e.g “There will be no GST” Although we are a democracy and we vote in Elections, we should have a Referendum on what the People of Australia expect from their government.

    • 0
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      Play Fairly – come from a country with referenda, about 15 every year, normally bound together in 3 to vote on. That is why they do not have 65 retirement for age pension for females, they still retire on full pension at 64. Govt wants to ask us every year to make us equal but the blokes do not want the missus to work longer and the women want to retire as early as possible. Here, the PM makes an announcement and that’s the way it’s going to be, like Rudd with his 67 years.
      Aussies would find referenda a nuisance, I think. The referendum kept us out of the EU, Govt wanted to join them years ago – maybe not so much any more, Muslim migration maybe??

  6. 0
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    What ever you do, do NOT sell your home and head off! Do a test run first. I have seen far too many people do this, only to realise they made a huge mistake – thr dream did not live up to reality. There are so many motorhomes and luxury caravans for sale in my area. I love walking and often get talking to people – so interesting to hear their story. Some sold their home, put the money into an expensive rig, then regretted it. Now staying at a friends or kids place trying to sell their gear. One chap paid $85,000 for top of the range car, and had custom built caravan made for $96,000. He cannot sell, less than 12 months old, done less than 3,000kms, and best offer for van he has had was $63,000. Within 2 weeks of the send off, he and his wife realised it was not for them.
    Then there are some others who rented out house, but due to COVID had, now not only can they not travel, but cannot move back into house till lease is up.
    I did own a van and enjoyed the few small trips, but living doing it permanently? No, not for me.

    • 0
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      That’s good advice. You see that a lot, people don’t realise your basically living in a box in all weather. Ok for short stints,,,but long term shuffling around in a cramped ,stuffy & cluttered space loses its apppeal.
      Problem is , people accumulate “stuff” and limited space to put it. You can’t park anywhere,,people end up parking on the outskirts of town & call a taxi to cart them around.
      Once your set up , it’s fun for a while , but there are drawbacks.
      Wait till you see the fuel mileage dragging that thing around.

    • 0
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      Lived in one of those for 3 weeks, enough. These days, traveling means a reasonably priced motel (no swim pool, Pay TV etc) at about $90 to $115 a night and no caravan towing, trips to the amenity block etc. Might cost slightly more than the van but it is stress free.

    • 0
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      Excellent advice. Better to upgrade your car to something that can tow a modest caravan and do a test run for 3 or 4 months – or pack a luxury tent. You may find it more worthwhile to profit regularly from low cost flights and modest motels or holiday rentals and rent a car at destination as Mariner suggests. It’s easier to rough it on a short holiday if you know you have the house to go back to. Be sure to do a detailed multi-year budget to compare various possibilities. Always have a disaster plan and a disaster fund. Do you want to find yourself convalescing from an op in a camper van? I don’t want to rain on the feast, but at our time of life it is plan for the worst, hope for the best.

      BTW, if you live on your boat and have no house, Centrelink pays a portion of the mooring fees as rental assistance – but in fact mooring fees are the least of your worries with a boat!!!

  7. 0
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    Sorry people don’t you realise the Libs are in power not Labor so place the blame where it should be.

  8. 0
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    How can you not like living in a motorhome full time! Been traveling Australia for 8 years and many others more than twice that! Never been so well off!

    • 0
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      Most probably doing in on your own, Hillbilly. Cannot do it with the missus, or rarely. They need their creature comforts. Mind you I like those comforts as well, at my age especially.

  9. 0
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    This is not my work but by another forum commenter of this site a while back.
    Apologies to that person as I did not take note of your name but the work was so good I kept a copy.
    It says it all ! Do as I say …not as I do. Numbers may have changed a little but you get the drift.

    Retired Politicians Perks

    Salaries of RETIRED Prime Ministers and Politicians
    Office
    Additional salary (%)
    Salary as of 1 July 2015
    Prime Minister
    160
    $ 507,338
    Deputy Prime Minister
    105
    $ 400,016
    Treasurer
    87.5
    $ 365,868
    Leader of the Opposition
    85.0
    $ 360,990
    House of Reps Speaker
    75.0
    $ 341,477
    Leader of the House
    75.0
    $ 341,477
    Minister in Cabinet
    72.5
    $ 336,599
    Parliamentary secretary
    25.0
    $ 243,912
    Other ministers
    57.5
    $ 307,329
    Shadow minister
    25.0
    $ 243,912

    Source: Remuneration Tribunal.

    TOTAL annual wages for the 150 seats in the Parliament were:

    Prime Minister
    $ 507,338
    Deputy Prime Minister
    $ 400,016
    Treasurer
    $ 365,868
    Leader of the Opposition
    $ 360,990
    House of Reps Speaker
    $ 341,477
    Leader of the House
    $ 341,477
    Minister in Cabinet
    $ 336,599
    Parliamentary secretary
    $ 243,912
    Other ministers*
    $ 307,329 x 71 = $ 21,820,359
    Shadow ministers*
    $ 243,912 x 71 = $ 17,317,752

    The TOTAL ANNUAL SALARIES for 150 seats = $ 41,694,311 (Yes, that’s nearly 42 MILLION DOLLARS PER YEAR)
    (And that’s just the Federal Politicians, no one else!)

    Politicians are paid ‘lifetime’ salaries the same as their last working year;

    After retiring, the average politician’s life expectancy is an additional 20 years (which is not unreasonable).

    This EXCLUDES all their other perks.

    20 years ‘lifetime’ payment (EXCLUDING wages paid while a Parliamentarian):

    Prime Minister ………………………$ 507,338 X 20 = $ 10,146,760
    Deputy Prime Minister ……………$ 400,016 X 20 = $ 8,000,320
    Treasurer ………………………………5,868 X 20 = $ 7,317,360
    House of Reps Speaker ……………$ 341,477 X 20 = $ 6,829,540
    Leader of the House …………$ 341,477 X 20 = $ 6,829,540
    Minister in Cabinet ……………………$ 336,599 X 20 = $ 6,731,980
    Parliamentary Secretary ………………$ 243,912 X 20 = $ 4,782,240
    Other ministers** $ 307,329 X 20 = $ 6,146,580 x 71 = $ 436,407,180
    Shadow ministers** $ 243,912 X 20= $ 4,878,240 x 71= $ 346,355,040

    Conclusions:

    TOTAL ‘life time’ (20 year) payments, (excluding wages paid while in parliament) is OVER EIGHT HUNDRED MILLION DOLLARS.

    Julia Gillard, Kevin Rudd, John Howard, Paul Keating, Malcolm Fraser, Bob Hawke, et al, ad nauseuare receiving $10 MILLION + EXTRAS, at OUR EXPENSE, after leaving Parliament.

    Should an elected PM serve 4 years and then decide to retire, each of the 4 years will have cost taxpayers an EXTRA 2½ million bucks per year, i.e. $2,536,690 per annum X 4 years = $ 10,146,760.

    A 2-year retirement payment cut-off will SAVE our Aussie bottom line $ 792,201,909 – NEARLY $ 800 MILLION.

    There are 150 seats in House, minus the 8 above = 142 seats, divided equally for example = 71 each for both shadow and elected ministers.

    150 seats – 20-year payment of $ 833,886,220 less annual salary x 2 years of $ 83,388,622. [$ 41,694,311 x 2]

    • 0
      0

      Now do the same with the top 150 CEOs salry and pension packages and you will find polititians are paid way under the average CEO and with a great deal more responsibility and social media flak coming thier way! COnsider the last CEO of Australia Post for a start even though she was paid considerably less than her predecessor.

    • 0
      0

      Ricken, methinks your pension entitlements are somewhat overstated however you do indicate how much our politicians, and ex-politicians, may be costing the public purse. You could apply the same to other people on the public payroll , how about policemen, we could cut them back and save hundreds of millions a year, or teachers, or firefighters, public servants, especially those who process social security payments, judges we wouldn’t miss too much, military, we are not currently fighting a war, well not a big war anyway. The list may be endless.
      While you may consider all our politicians, from all sides of the political spectrum, do not deserve the salaries they receive, consider the jobs they do, on call 24/7, having to listen sympathetically to whinging constituents, always being criticised, specially about their salaries, having to re-apply for their jobs every 4 years. I may like to have their salaries but I would not like their job.
      I do not think serving members of parliament are overpaid, but I do think, between Federal and State parliaments there are too many of them. There is one more thing, if you pay peanuts all you will get is monkeys.

    • 0
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      Thanks McDaddy, this confirms my understanding on pollies pensions but I was unmotivated to find out the actual figures.

    • 0
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      Great info Ricken. Similar comments re CEOs and their colleagues level as well !! Also pollies get nearly $200- per day meal allowance and nursing home residence gets about $6- per day meal allowance !!

  10. 0
    0

    I do not object to politicians being paid for their day job but I do object to them receiving such HUGE benefits AFTER they leave office.

    CEOs in private enterprise are none of my business. I wouldn’t have turned down a Cartier watch nor complained about getting one! She has paid the price for her largesse when she was just probably sharing the perks with the lower echelons.

    The shareholders should take it up with them if they are dissatisfied but the politicians are paid from the public purse. Snouts in troughs.

    A person who has worked his whole life paying taxes cannot even take a caravan on an extended trip without government having a say in the matter……
    And should you venture overseas for a period of more than 6 weeks they are at it again.

    Once a person has got the pension by qualifying to government requisites they should be left alone to enjoy the few years they have left.

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