Does capital gain from selling a property affect the pension?

Font Size:

Sanchez’s mother is selling an investment property and is worried about her pension.


Q. Sanchez
My mum receives the Age pension, around $850 per fortnight or $22k annually. She also works two shifts per fortnight as a nursing assistant and earnt around $11k last financial year. She has been within the Age Pension thresholds to date and hence qualifies and has qualified for several years.

This past tax year she had a capital gain tax event when she sold an investment property that she owned 20 per cent of. The end result was a $20k capital gain. Her tax return will show a $53k annual income and now we are wondering if this will cause her any issues with her Age Pension?

It was a one-off event, so her income for FY2021 will no doubt be back to just the Age Pension as she has decided the retire within the next few months. Any guidance on her position would be great.

A. The money from the sale of the investment property is not included in the income test but, if it is worth more upon the sale of the property than it was adjudged to have been worth, it could change her assessment under the assets test as she will now hold more money in assets.

While the income from the sale of the investment property is not included in the income test, what your mother does with that money could still have an impact on the income test.

If she puts the money into a deposit account, it will be deemed to be earning a certain amount of interest. This income is then assessed as part of the income test and will ultimately determine whether or not your mother continues to receive an Age Pension.

If the deemed income from the amount your mother has invested is higher than the income she was receiving in rent from the property, there may be some effect on the pension that she receives.

It could be beneficial to discuss the situation with a Centrelink Financial Information Services officer who will be able to provide you with more information about this situation and how it will affect your mother.

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Join YourLifeChoices today
and get this free eBook!

By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy


What are the differences between concession cards?

Are the Pensioner Concession Card and the Commonwealth Seniors Health Card different?

Government and community support you should know about

Support payments, Age Pension updates, Robo-debt refunds, free travel and more.

Pension Supplement: What is it for and how much should you get?

The Pension Supplement has been paid to those on certain pensions since September 2009.

Written by Ben


Total Comments: 1
  1. 0

    IFS from Centrelink is definitely the way to go, they did help us a lot and with all the rules changing at whim it is the safest bet. Good advice Ben.



continue reading

Health news

Australians want to die at home - but do we achieve that goal?

How do you want to die? More than 70 per cent of Australians want the end to come at home,...


Rise in 'grey divorces' sparks warning from legal experts

More Australians are divorcing later in life, leading to "unique, confusing and overwhelming" challenges for couples aged over 50. The...


Friday Funnies: Short jokes for the shortest month

February flies by too fast, just like these short but sharp jokes. What is the recipe for Honeymoon Salad?Lettuce alone...


The four types of hearing loss explained

Research indicates that one in six Australians has some form of hearing loss.  Hearing loss refers to reduced hearing, which...


Fabulous Fish Pie

It should go without saying that a fish pie needs to have lots of big chunks of fish in it,...


Succulent Spice-Roasted Salmon

These little salmon bites are something I've made time and time again over the years and this method of roasting...


How to take great pictures of gardens

If you've never been too good at taking pictures of your beautiful blooms, now's the time to brush up on...

Aged Care

Paid on par with cleaners: the broader issue affecting aged care

Paid on par with cleaners: the broader issue affecting the quality of aged care Ben Farr-Wharton, Edith Cowan University; Matthew...