Centrelink Q&A: How does upsizing affect the Age Pension?

John wants to sell his home and move to a larger property. How will it affect his pension?

Centrelink Q&A: How does upsizing affect the Age Pension?

John wants to sell his home of 48 years and move to a larger property. How will it affect his pension application?

•••

Q. John
My wife and I are applying for the Age Pension. We want to sell our current home of 48 years and move to a larger property of 21.5 hectares. How much pension will we lose if we go ahead with this decision.

A. How much your land purchase will affect your pension depends on the value of the land you are purchasing.

Normally, only two hectares of land on the same title as your main home are exempt from the assets test, although all the land on the title may be exempt if you or your partner:

  • have reached age pension age
  • are getting an Age Pension, Carer Payment or Pension Bonus Bereavement Payment from Centrelink, or a service pension from the Department of Veterans’ Affairs
  • have lived there for the past 20 years in a row
  • pass the land use test.

To meet the extended land-use test, you need to be using the land to make an income, if possible. This could mean:

  • you or a family member are running a farming business on the land
  • you are leasing the land to someone else for a commercial rate of return
  • have little or no scope to earn income from the land.

As you are looking to purchase the property now and haven’t lived on the property for 20 years, it will most likely mean that you will not gain an exemption for the extra land outside of the two hectares afforded by the regulations.

This means that 19.5 hectares of the land will be included in the asset test. If this land takes you and your wife’s combined assets over $853,000, you will not be eligible to receive an Age Pension. You can view the full asset test limits here.

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

RELATED ARTICLES

    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.





    COMMENTS

    To make a comment, please register or login
    Cowboy Jim
    3rd Jun 2019
    10:38am
    Cannot really understand why an elderly couple wants to get into such a large property apart from possibly divesting themselves of cash and other asset investments by getting into a asset exempt owner-occupied property. Should possibly have been done a while back since it will be regarded as a rort, me thinks.
    Eddy
    3rd Jun 2019
    9:38pm
    Cowboy Jim, why would you assume a couple in their mid sixties are physically incapable of looking after a small property of 21 acres. In any case why stereotype this couple as elderly, I suspect I am about 10 years older than they and I object to being classified as elderly. If this the lifestyle they want and they can afford it why should you suggest they are somehow incapable. In any case do as SFR suggests and talk to Centrelink. My brother and his wife have 10 acres and they still get the full pension.
    Cowboy Jim
    4th Jun 2019
    9:43am
    Get your point Eddy. I am a bit biased since three of my friends have done exactly that - moving out of town to places with no services. One lost his licence because of health reasons, no public transport. Another just found that he could not manage his big place, although he thought he could before moving, and yet another found that his wife missed the daily interaction with her grandchildren, the distance was just too far.
    No insult was intended about the age of the people, may they have been lucky not to have had brushes with health issues. So good luck to them.
    OlderandWiser
    3rd Jun 2019
    12:05pm
    Doesn't make any sense to me at all. Centrelink will have a field day with the extra 19.5 hectares to ensure they get no pension. They don't say if it's a farm, hobby farm or just bush but I would think that no pension will be in the mail.
    Best to talk to a centrelink financial officer with their plans before going ahead.
    tams
    3rd Jun 2019
    12:10pm
    It doesn't mean they will lose any pension. If their total assets plus 19.5 hectares is valued less than $387,500 there is no reduction to the full pension. More information is required
    tams
    3rd Jun 2019
    12:10pm
    It doesn't mean they will lose any pension. If their total assets plus 19.5 hectares is valued less than $387,500 there is no reduction to the full pension. More information is required
    roy
    3rd Jun 2019
    3:30pm
    MICK will have all the answers, just wait.
    Cowboy Jim
    3rd Jun 2019
    3:34pm
    Yes come in Mick - good rort to get ahead if you have kids to hand it to. Like to hear your input.
    roy
    3rd Jun 2019
    8:50pm
    MICK, where are you my hero?
    roy
    3rd Jun 2019
    9:08pm
    A friend of mine has just come back from a holiday in Jerusalem but couldn't get near the wailing wall because of all the ALP voters.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles