How can downsizing the family home affect Age Pension payments?
Many older Australians consider downsizing, but the effect on their Age Pension can mean it is costly to do so. So, how can it affect pension payments?
Please, could someone advise me? I am on a full Age Pension. I want to sell my apartment, move interstate, rent whilst searching, then buy a new (cheaper) apartment.
How will this affect my pension, assets, etc.?
When you sell your main residence, the amount you receive becomes an exempt asset for a period of 12 months. This is to give you time to choose a suitable housing option and should you struggle to do so within the timeframe, you can apply to Centrelink to have this period extended by up to 24 months.
The proceeds from the sale will be deemed to earn interest and this will be assessed under the income test, which may affect your Age Pension payment. Your Age Pension payment is reduced by 50 cents for every dollar you exceed the income threshold.
As soon as you buy your home, any amount left over is considered an asset and will be assessed as such. Your Age Pension payment is reduced by $1.50 for every $1000 you exceed the asset threshold.
Your Age Pension payment is the lower amount calculated when the income and asset test are both applied.
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