‘Will my mother lose her pension if she moves in with me?’

Mary wants to look after her mother but is worried her mum will lose the pension.

‘Will my mother lose her pension if she moves in with me?’

Mary wants to look after her mother but is worried her mum will lose the pension.


Q. Mary
My mum is on an Age Pension and is thinking of moving in with me so that I can look after her. Friends have advised me that if she leaves her family home – which is in her name – that Centrelink will no longer pay her the Age Pension. Is this correct?

A. There are a number of factors to consider, but, yes, essentially your friends are correct.

If your mother no longer resides in a home that is in her name, it will be included as an asset in the asset test for the Age Pension and, depending on the value of the property (and her other assets), it may result in her pension being cut.

However, depending on your family situation, you can enter into a granny flat interest arrangement, that can be used in these situations, so that your mother can continue to receive the Age Pension if she transfers her property to your name in exchange for being able to live with you for the rest of her life.

Under a granny flat interest arrangement, an individual ‘pays’ for the right to live in accommodation for the rest of their life.

Granny flat interest rules are designed to recognise arrangements made by families to support elderly people and the rules do not have any test on age or relationship, nor do they put a measure on the support provided. The rules do, however, reduce the effect of gifting to make the costs involved in securing the right to live in the accommodation for life less prohibitive.

The value of a granny flat interest is simply the amount paid for that interest, be it $1 or $1 million, as long as the person:

  • transfers the title of their home, or
  • pays for the construction and fit-out of premises, or
  • purchases property, or contributes to the purchase of a property in another person’s name in return for a life interest or the right to live in that accommodation for life.

Your mother may be subject to a reasonableness test if she transfers assets into your name. If the amount of money or value of property exchanged is more than the value of the granny flat interest, the excess is considered to be a deprived asset and, under gifting rules, could affect the amount of pension she is paid.

Human Services also needs to know what was transferred to secure the granny flat right, in order to determine if your mother is depriving herself of assets.

Hopefully, this will help you to determine how your mother’s Age Pension may be affected, but you can also contact Human Services on 13 2300 to discuss your individual circumstances.

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

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    9th Aug 2019
    You haven’t mentioned the 2 year exemption period where someone enters a care situation. Takes the pressure off making a quick decision on the family home
    9th Aug 2019
    I don't suppose the politicians with their fat, undeserved, defined benefit pensions are affected by such rules defined for other people? Of course not, they are privileged!
    Just another example of the many disgusting rules administered by Centrelink at massive taxpayer expense to try and NOT give you the Age Pension. Another reason to scrap all such rules, and have NO tests (other than Age and Residency period) and give Universal Age Pension. Then, all can do what they like with their assets without being penalised, and it is none of the big brother Govt's business.
    9th Aug 2019
    Politicians would be subject to exactly the same rules as everyone else if they were claiming an age pension. Since they, like millions of other Australians, are unlikely to ever be on the age pension from Centrelink, it's a mute point. It is nothing to do with privilege at all. The thousands of people who have self funded their retirement and also not claiming Government assistance are not subjected to these rules either and are far from privileged. If you want Government handouts you accept the rules that govern them whatever they are. It's the price of ensuring the needy not the greedy get help.
    9th Aug 2019
    It’s not the same, KSS, self-funded retirees have saved up and gone without. Government pollies didn’t save up and go without they fleeced taxpayers by awarding themselves huge pensions and perks that no-one else could access.
    In other words they granted themselves privileges through corrupt processes.
    10th Aug 2019
    Politicians no longer receive defined benefit Pensions, haven't since 2010.
    11th Aug 2019
    Complete rubbish, KSS, because the politicians arranged the large untested pension benefits for themselves through their appointees defining their benefits - nothing but corruption. You must be an ex-politician or have one in your family enjoying these fraudulently extracted benefits to justify it. Triss is completely right in her response.
    The Govt did take 7.5% taxes included in the personal income taxes for the duration of employment of all people, hence have an absolute duty to return it in the form of age pensions without harassing recipients by a plethora of rules designed to NOT pay it. Yes, Universal Age Pension for all not on decent defined benefits as I noted is the solution - no excuse to not have it.

    Of course, you & McDaddy would like to play with words - why would Abbott on over $300K, Bronnie Bishop or Ruddock on over $250K, Julie Bishop or Wayne Swan on over $200K, etc, etc, etc (yes, these are Defined Benefits based simply on their salaries, years as MPs (only 18 needed to get maximum), and positions held) - all with NO TESTS, want to even apply for Age Pensions? Of course they would and must get rejected! They don't need it in this life! In fact, Julie just landed 2 new jobs, while her pension would continue being paid as she has NO tests! Corruption as explained! All these pensions should have been stopped from 2004 when the rules changed, however these corrupt people kept their schemes going.
    bay bridge
    9th Aug 2019
    I just wonder why people have such a negative attitude towards Politicians. They are the people that manage our economy and our welfare.
    Put yourself in their situation and see how well you do.
    They work very for the money they get contrary to all the negativity. Someone has to do the job and I admire them.
    9th Aug 2019
    Because many people work just as hard as some of our politicians and do equally as important jobs without the many benefits a politician receives.
    9th Aug 2019
    They manage our economy, bay bridge!!! Tell me again how much debt we’re in and how many of our assets have been sold.
    Play Fairly
    9th Aug 2019
    That is a nice way of seeing things Bay Bridge. However, I am not able to feel a great deal of enthusiasm and high regard for most of our politicians.

    They have to forget about delivering a Surplus at any cost. The country, its economy, its workers, its youth, its aged, its unemployed, its disabled, its pensioners are all struggling to make ends meet. Living costs are rapidly increasing and people's income has been deliberately held down.

    Still nobody in government seems to be listening to the advice of the Reserve Bank, or heed the advice of many financial institutions. The government wants their Surplus, and nothing else matters to them.
    11th Aug 2019
    bay bridge, besides the several good comments from others above, maybe you haven't understood that these self-centred leeches (called politicians who arranged all benefits for themselves) have taken a very resource-rich country, handed over the massive wealth to foreigners (and continue to do so), and then cry poor when it comes to arranging benefits for the people resulting in this being the meanest country in the OECD when it comes to dealing with their own aged people who paid massive taxes through their life. If you still don't get it, don't bother, and I won't waste my breath or my time.
    9th Aug 2019
    What would happen if she needed to go into permanent care? do the recipients of the property need to pay for her age care?
    9th Aug 2019
    Again, this hasn't been mentioned. But surely it would be the case?
    10th Aug 2019
    No, if she has transferred assets to her child and created a granny flat right, then she doesn't have assets for Aged Care, 85% of her Pension will be used to provide her with daily care, but she won't pay for her accommodation etc.
    9th Aug 2019
    Daughter would be better of moving in with mum. Obviously don't know the housing situation, and location, but this would be an option, particularly if mum is in the family home that is now too big for her.
    9th Aug 2019
    So bloody complex. Our money is not ours anymore once on pension. Not fair as the proceeds of paying off a house came from our hard earnt wages which is taxed. We should not be compromised.
    Play Fairly
    9th Aug 2019
    This is criminal.  

    About time a politician with some common decency and common sense did something to put an end to this rot.

    How dare anyone stop any elderly person's Aged Pension if they move in to spend some of their remaining years with one of their children.  In this case, it gives someone the opportunity to give back to their mother some of the TLC that their Mother once lavished on them throughout their childhood.  

    In the example/question asked in this article,  I believe government legislation is totally wrong to stop the mother's Aged Pension because she is moving in with a family member who wants to care for her. 

    To retain receipt of the Aged Pension, the government's ruling that the mother must gift over the family home in return for accommodation has the potential to cause major problems within families.

    For goodness sake,  this puts much hardship on an elderly person just knowing  that a simple change of address has the potential to stop their Pension (or to create much upset with other family members in the event of their demise).    Don't politicians have any idea of life in the real world?  You can bet your sweet life that politicians don't have to choose between losing their Pensions or disposing of their family home when they are old. 

    Stop doing this to Aged Pensioners.  
    Stop looking for ways to complicate people's lives.
    10th Aug 2019
    The Mother's house won't be an asset until after 2 years of her moving in with Daughter if she is receiving care. During that time they can decide hat to do with it, the sky isn't falling in, nobody is kicking people off the Pension etc.
    Play Fairly
    11th Aug 2019
    Big Deal McDaddy. So the Mother's house won't be classed as an asset until after 2 years of moving in with her daughter. The fact is, an Aged Pensioner's home, or the proceeds from the sale of their own home, shouldn't have any bearing on eligibility to receive the Aged Pension. A lifetime of work, raising a family, paying taxes, making mortgage payments, Council Rates, Fees, Permits, State Government Levies, etc etc. is why the family home should never be included as an Asset.

    In the case of someone selling their family home for millions, I have yet to hear of anyone still wanting to collect a Pension. Most people are happy to be free from the requirement to keep up with the ever shifting government goalposts regarding their entitlements.
    11th Aug 2019
    I agree with your sentiment about not getting the Pension when she has $1million dollars in the bank. I also think 2 years is more than adequate to decide what to do. I don't agree with you about being entitled to receive a Pension just because someone paid tax all their lives, we all pay it, we all pay Council charges, Fees Permits, too bad so sad. Even you have the means to support yourself, then do it. This crap about not using some of your own money to fund part of your retirement is costing the country Billions in welfare handouts.
    Play Fairly
    11th Aug 2019
    Thanks McDaddy. I think a lot of people refuse to see that today's Aged Pensioners contributed towards the previous generation's Pensions. Now it is time for today's Pensioners to receive their due, it seems many are saying that the Aged Pension is not a Worker's Entitlement, but it is Welfare.

    I have heard that the Old Aged Pension is a right under our Constitution.

    With the increase in the Eligibility Age to receive the Pension, and all the complications and delays people experience in applying for the Pension, surely it would be a huge saving in Centrelink's operational and running costs if Australians automatically became eligible for the Aged Pension at retirement age. Pretty soon you would see it turning into a "Status Symbol" by those who were fortunate enough to not have to draw on their entitlement. Most people who receive the Aged Pension would be quite happy if they didn't need to do so.
    12th Aug 2019
    Unfortunately, Play Fairly, previous generations Taxes are not stockpiled to fund the Age Pension, it comes out f the current bucket. The Age Pension is not built into the constitution either. It is looked upon as a safety net for people who need it, not a basic right. If people can self or partially fund their retirement, the better off the country will be long term.
    Play Fairly
    12th Aug 2019
    McDaddy, I think there were some changes made under John Howard that affected Pension funding.

    If you don't agree with me regarding the Aged Pension being a right, in pre-superannuation days, exactly how else did the working class survive when their bodies aged and they couldn't work. Everyone, apart from the very rich, retired onto the Aged Pension.

    Some people refuse to acknowledge that there are MANY of today's Aged Pensioners who worked in the era before Superannuation even existed. These people would have no Superannuation.....just their life Savings and their home. Savings don't last very long (and won't make you rich in Interest), and you can't 'eat' your home......so I'm afraid the country will just have to wait for the time being, to be "better off" in the long term as you have mentioned above.

    I think the government, and many "millenials" just want the elderly to drop off the planet. They forget these people contributed much to Australia in their former years.
    12th Aug 2019
    I wasn't suggesting pre superannuation Pensioners be penalized, I was talking about how things are now. In your initial response, I disagree with you that if she sells the home and it forces her off the Pension for a while, so be it. You suggest that the proceeds of the sale of their home shouldn't impact her Pension and that is just rubbish.
    Play Fairly
    13th Aug 2019
    OK McDaddy, putting aside the issue of current Aged Pensioners/ex workers who go back to the pre-superannuation era.......at this present point in time, if the family home happens to be located in some Regional areas of Australia with very high unemployment and/or in drought, the home has automatically drastically dropped in value. Not everybody hails from major cities and are sitting on real estate "goldmines".
    Your residence and home, wherever it is, it is YOURS....it should be of no concern to the government if you decide to live with one of your children. It should NOT involve signing the house over to anyone to keep your Pension. Too much interference by a government.

    McDaddy, hope you don't mind, but you and I will probably have to "Agree to Disagree" on this one... :)
    10th Aug 2019
    Move in with daughter, sell $1 million home, go off Pension, live well, don't see the issue really?
    11th Aug 2019
    lol...sure McDaddy...nope people have an aversion to looking after themselves...they want the pension and all that goes with it...assets get hidden, smart accountants work around the system..

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