11th Feb 2015
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Reducing your assets
Reducing your assets

Doug is considering buying a more expensive home to reduce the number of assets assessable by Centrelink, but will this pay off? 

Q. Doug

Under the assets test your pension can be reduced by varying amounts depending on how much you’re over the threshold. My question is: If you purchase a more expensive home after selling your original one, and therefore bring yourself under the asset limit, would you then have your Age Pension increased?


A.
As the family home is exempt from the asset test, the value of any home you purchase would not be assessed when calculating your Age Pension payment.

However, it is worth noting that your pension payment is calculated using both the income and asset test, and you are paid the lesser amount. Therefore, if your payment under the asset test remains greater than that calculated under the income test, your actual payment may not change.





    COMMENTS

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    Abby
    18th Feb 2015
    8:58pm
    A lot of money would also be wasted with with selling and buying of the properties.
    Perhaps adding an extension onto the existing home may be the cheaper option...this would be definitely the case if you have good neighbours.
    PlanB
    23rd Feb 2015
    1:38pm
    Dead right there Abby the stamp duty would be a lot, buying and selling is not the way to go unless one wants to get out of an area like say Sydney and to a nice quieter and nice place.
    Stof
    21st Feb 2015
    8:59am
    I'm a bit confused by the second paragraph. What does it mean? The question was about decreasing his cash assets by buying a larger house. By doing that it will decrease his cash assets, and the rest is a mathematical exercise around loss of investment potential vs increase in Pension.
    Auction Girl
    23rd Feb 2015
    10:25am
    Isn't this just the type of "millionaire pensioner" rort that we are trying to stop in Australia ?
    Polly Esther
    23rd Feb 2015
    12:19pm
    Exactly !! GREED !! The rotten green eyed monster that is worshipped by the few.
    And the more they can take, the less there is for the battlers.
    We know the problem, but the answer???
    biddi
    23rd Feb 2015
    12:41pm
    Exactly, A. Girl and Willy P. and agreed, Sybilla.
    sybilla
    23rd Feb 2015
    11:49am
    Surely this is greed - half the world is either starving, or living in some form of extreme hardship. I am a part pensioner with a modest home. I feel grateful that our tax payers can still fund my relatively (compared to the rest of the world) lavish life style. I wonder how long they will be able to pay us anything at all, given the state of our economy and our botomless demands.
    particolor
    23rd Feb 2015
    1:04pm
    I Sold the Mansion ! :-) But lost the Money at the Dogs !! :-( OH Dear !! I'll have to Get the Full Pension !! :-)
    mangomick
    23rd Feb 2015
    1:58pm
    Know why you lost . You should only put money on the Dogs who's trainers are live baiting. That's the hard part though, as apparently, non of the Dog trainers actually live bait.
    MICK
    23rd Feb 2015
    3:37pm
    Nobbled!
    particolor
    23rd Feb 2015
    3:59pm
    Backing three legged Dogs !! :-(
    KSS
    23rd Feb 2015
    1:31pm
    This is a prime example of someone clearly having the means to support themselves but feeling 'entitled' to a pension and seeking ways to engineer that goal. Why should I and others in the workforce fund Doug's 'mansion'?

    It is a blatant rort and should be stopped. Better yet, make 'Doug' downsize to realise more liquid assets to fund his retirement.
    particolor
    23rd Feb 2015
    1:47pm
    Do You KSS think this was put here to Stir the Already Stirred ?? :-)
    KSS
    23rd Feb 2015
    1:54pm
    ;-} particolor
    MICK
    23rd Feb 2015
    3:39pm
    Don't worry, the family home will not be immune forever. When the poo hits the fan with out failed trade position I suggest it will be a done deal. Just give it time. The same goes for estate duties....coming to a neighbourhood near you!
    GreyViper
    23rd Feb 2015
    1:57pm
    UNBELIEVABLE! This is exactly why the government is going to have to include the family home into assets when making assessment for the aged pension. This attitude is deplorable! The pension is NOT A RIGHT! It is there to provide a modest lifestyle for those who are unable to provide for themselves. If you have assets you should be using them to provide for yourself, not looking for ways to offload them so you can suck on the teat of government welfare! I live in a modest home and am a self funded retiree who has put a bit aside every week for forty years so I WOULD NOT become a burden to society. This sort of attitude makes me ill!
    mangomick
    23rd Feb 2015
    2:04pm
    Who in their right mind would really buy a bigger house just to get the pension when they could do better than the pension by investing that same amount of money.What do they do,buy a big house when investment returns are crap then sell it and downsize and then invest the extra cash when the markets and interest rates turn around. Better off living the high life for a few years until the cash is gone then going cap in hand for the pension if that's their mentality.
    particolor
    23rd Feb 2015
    2:32pm
    YEP !! You only Live ONCE !! Enjoy Your Cash While Your Here !! :-)
    "Look what the Old Basket left Me !! I'm going to Disney Land !!" :-)
    MICK
    23rd Feb 2015
    3:40pm
    Be careful what you wish for mangomick.
    mangomick
    23rd Feb 2015
    5:22pm
    Mick...I was talking about "Dougie" in the article above. I'm still working and bringing in a good salary but if I was to retire tomorrow, I'm in a position now ,where I will never see a Government pension. Like I said, i can't see why anyone would buy a large home they don't really need just so they can get a pension when they could live in a modest home and be getting an income from the money saved by investing it in a rental property or shares which will bring in a retirement income.
    Radish
    24th Feb 2015
    10:28am
    BUT they do do it mangomick. Seen it first hand. Where I live there are lots of canals and when on a recent cruise around the area the Captain pointed out that a great many of the homes are occupied by one or two elderly people. Buy the big home to get the pension and struggle to pay the rates and outgoings but, they get the pension and concession card which is their right ;)
    almost midnight
    23rd Feb 2015
    2:20pm
    cost of selling/buying - and often there are more costs in living in a more expensive house if it is larger
    Gra
    23rd Feb 2015
    2:26pm
    Forget the bigger house Doug, go and get that brain looked at - if they can find it.
    particolor
    23rd Feb 2015
    2:45pm
    But don't get the Cat Scan in America !! Its 4,423 Bucks !! YOW !! :-(
    MICK
    23rd Feb 2015
    3:53pm
    That's why it is called a catscan.
    particolor
    23rd Feb 2015
    4:09pm
    It should be called a CatScam !! Mick When I looked it up the Real Price of a Scan was $250 .. But in America its what I said up there ! And Abbott wants that here ??
    Fready
    24th Feb 2015
    7:18pm
    The comments on this blog are somewhat at odds with those for the blog titled "Millionaire Pension Payments" elsewhere on this site, and many of the comments are from the same people.!!On the other blog there are several comments to the effect that everyone is "entitled" to a pension.
    Anyone who has been to a Retirement Seminar lately would be aware that financial planners are telling people to put aside some $250,000 (for a couple) to invest and then spend the rest on a house in order to qualify for a full pension. The investment can bring in up to $284 per fortnight without affecting the pension. The value of the house is expected to go up (with no penalty) in the current climate. The home owner can downsize if they start running out of money. Legal but immoral.
    Fair Go
    18th Mar 2015
    10:37pm
    Agree with you Auction Girl, if people like that with probably enough extra cash stopped trying to rort the system, maybe us who have nothing but the pension to live on would get an increase? Ha Ha! Like the $5.90 per fortnight we are getting on 20/3, that will go a long way towards all the increases in my bills.
    particolor
    19th Mar 2015
    8:19am
    Don't get upset ! Tony said You can pay Your own Bills ! As long as You pay His Too !! :-)
    Mellanby
    14th Jul 2017
    5:48pm
    Fully support Doug. As a retiree would you not want to get out of overcrowded/over populated/anonymous cities to somewhere where you can benefit a local community....and, heaven forbid, leave something decent for your children
    particolor
    14th Jul 2017
    7:17pm
    Good Thinking !! :-) :-)


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