Mavis is considering the implications on her partial Age Pension if she sells her unit to move into a retirement village.
I am considering selling my unit and moving into a retirement village. My concern is what the effect would be on my partial Age Pension. Will the lease with the retirement village be calculated as my asset, like my car but not my home? Am I still eligible to apply for a reverse mortgage from Centrelink with the lease of the village unit?
A. How your Age Pension is affected is a tricky question as Centrelink uses a calculation based on the difference between the asset test limit for homeowners and non-homeowners, which is currently $203,000 for singles. If the amount you pay to enter a retirement village is greater than the difference between these two limits, then you will be considered a homeowner and the entry fee will not be included in the asset test.
You must also consider any amount you have remaining from the sale of your home after you pay the entry fee. This will be considered a financial asset and will be deemed to earn income. This income will be assessed for Age Pension purposes.
As you do not hold any equity in the property, you would not be eligible for the Government’s Pension Loan Scheme.
Before making any decision on selling your home, you should speak to a suitably qualified financial professional or, at the very least, make an appointment to speak to a Centrelink Financial Information Services officer.
If you have a Centrelink question, send it to firstname.lastname@example.org and we’ll do our best to answer it, or find someone who can.
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 the 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 financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.
Join YOURLifeChoices, it’s free
- Receive our daily enewsletter
- Enter competitions
- Comment on articles