How much land is too much?

When your ‘house block’ is several hectares rather than a few hundred square metres in the suburbs, how does Centrelink assess your eligibility for an Age Pension?


Q. Grant
I am 55 years old and live on my 22-acre property 130km from Darwin. Will the amount of land I have impact on my old age pension, or a disability or unemployed pension if they are ever required?

The land is used for privacy and surrounds the very modest shack I live in. I grow a few veggies and fruit for myself. Should I or will I need to downsize my property when nearing pension age?

I have owned the land for three years, so will have owned it for 15 years when I reach pension age. Please advise, as this may affect what I do with the land over the next 12 years.

A. Normally, only two hectares of land on the same title as your main home are exempt from the assets test, although all the land on the title may be exempt if you or your partner:

  • have reached age pension age
  • are getting an Age Pension, Carer Payment or Pension Bonus Bereavement Payment from Centrelink, or a service pension from the Department of Veterans’ Affairs
  • have lived there for the past 20 years in a row
  • pass the land use test.

To meet the extended land-use test, you need to be using the land to make an income, if possible. This could mean:

  • you or a family member are running a farming business on the land
  • you are leasing the land to someone else for a commercial rate of return
  • have little or no scope to earn income from the land.

Centrelink considers:

  • where the land is
  • your family situation; for example, caring responsibilities
  • your health
  • if any family members have their own house on the land
  • if the land supports you and your family or a younger generation of your family
  • any commercial use or scope for commercial land use
  • environmental issues, such as a drought
  • if the land combines two or more blocks or titles.

Centrelink offers the following case studies to illustrate the rules.

Example 1
Bob is single and 65. He owns 30 hectares on a single title. He’s lived there all his life and runs it as a dairy farm. As long as Bob keeps working the farm to its potential, the whole property is exempt from the assets test. Any other business assets are not exempt, such as stock and sheds.

Example 2
Betty and Jim moved to their five-hectare, single title rural residential block 21 years ago. The block is scrubby, with no water. There’s not much scope to earn income from it and the council won’t let them subdivide it. This means the whole property is exempt from their assets test.

Example 3
Jenny is 85 and has lived on her 100-hectare single-title farm for the past 40 years. She can’t run the farm on her own any more. Her son John and his family live in another house on the land. John earns his living from running the farm. The whole property is exempt from Jenny’s assets test.

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

Written by Ben


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