Centrelink Q&A: how is your property assessed?

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Martin is employed part time and his wife still works full time. They both own property and have some questions about how they will be assessed when it’s time for Martin to apply for an Age Pension.


Q. Martin
I am 64 and married. My wife will be 57 this year and working. She will work until she’s 60. I was laid off work in 2014 and currently do odd jobs to make ends meet until I apply for the Age Pension when I turn 66.

Between my wife and myself, the following is our situation:

My superannuation is used to pay off our primary place of residence.

My wife works and her super balance is approximately $120,000, which we forecast to reach approximately $220,000 by the time she retires in three years.

We have a small investment property together on which we owe about $560,000 and which is worth $720,000. This property is still substantially negatively geared.

My questions

1. With the above scenario, I am planning to apply for the Age Pension when I turn 66. Is this possible under the current Centrelink rules?

2. Will the investment property be considered by Centrelink as an asset that will prevent me from qualifying for the Age Pension?

3. Is it the value of the investment property (in this case the $720,000) that is taken into consideration by Centrelink or the equity (in this case $160,000) when determining my Age Pension entitlement?

4. Will my wife’s income of approximately $70,000 per annum prevent me from receiving the Age Pension?

A. First, as you still have a couple of years until you are eligible to claim an Age Pension, you should be aware that the rules may change in the interim.

There are many factors that can affect your eligibility for the Age Pension and it is not possible for us to advise if you will indeed receive an Age Pension. However, in general:

  • Your eligibility is assessed under the income and asset test and you will be paid under the test that results in the lowest rate. As you are part of a couple, you will be assessed as such and you and your wife’s income and assets will be assessed.
  • As you have commenced an income stream from your superannuation, this will also be assessed under the income and asset tests. If your wife decides to commence an income stream from her super, it will be assessed as part of your Age Pension claim.
  • The market value of the investment property minus what you owe will be considered an asset. Or the amount of income minus mortgage repayments, rates and the cost of maintaining the property will be assessed under the income test.
  • Your wife’s income will also be assessed under the income test. 

It would probably be useful for you to make an appointment to speak to a Centrelink Financial Information Services officer to outline the rules that apply to your specific circumstances. 

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 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 Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

If you have a Centrelink question, please send it to [email protected] and we’ll do our best to answer it for you.

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Total Comments: 7
  1. 0

    I would sell any property (investment) and put the money in your wife’s super. Her super will not be assessed until she reaches pension age, which for her is probably 67. Since you have minimal assests you will get the full pension.

    • 0

      Similar situation sold our investment property and it makes approximately the same in super as it did when rented. We have a full pension coming in now and it does not cover our expenses but we still the same and are enjoying life.

  2. 0

    If it were up to me, I’d ban investment property – a disgusting, exploitative concept. The only housing I’d allow is one’s own dwelling. The state should also provide a lot more housing. Homelessness is a growing problem, in large part caused by the greed of landlords.

    • 0

      So, Knows -a-lot where are all the houses going to come from for those that cannot afford to buy if no one can have an investment property. It is the tax payers that pay for public housing.

    • 0

      Gee Knows-a-lot, you have no conception as to how Australia works as regards where people live. Governments provide some subsidised housing for those who are on low incomes and investors provide the rest. If the incentive to enter the housing investment market, such as negative gearing, is taken away the costs of rental increases dramatically. This is not a model dreamed up by some university people, it’s real life as Australia found when a federal government did just that. The Act was repealed almost straight away when the problem arose.

      There are some who are consumed by the politics of envy who want to rabbit on about how those risk takers are bleeding the tax system with negative gearing but the truth is that the majority of those who enjoy negative gearing are, in the main, wage earners trying to make a sound investment. Some people prefer to rent and some people are forced to rent but investors are the ones who provide a roof over the heads of families who are renters.

    • 0

      You think homelessness is problem now then take away negative gearing and it will be a very big problem. Having had a rental property become vacant during the period it was last abolished then it wasn’t good to see how desperate people were to get into that property.

  3. 0

    Gosh there are so many questions in that scenario. Where is Old Geezer?
    No.4 His wife’s income will prevent him from getting a government pension. Full stop.
    Next if her super is $120K and her super provider promises $220K in 3 years she is being led up the garden path.
    When his wife retires and the man is over 65 as a couple the assets, other than the family home, will be totalled and her probable $160k super in 3 years will be taken into account.
    Negative gearing is of no value to the retired people.
    However while the wife is working then it may be of benefit to keep the investment property for awhile as a capital investment. It is a shame it doesn’t pay for itself as it would serve them well if they have a short term loan and the place is paid off.
    There is likely to be a slowing of the market for awhile so that is a consideration as well. But who knows – I thought that 3 years ago too.



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