You may not think it’s important to advise Centrelink when you’re going on holiday, but if you’re running away from home for a length of time, make sure you understand any implications your trip may have on your pension entitlements. YOURLifeChoices has outlined what you need to know before you go.
Many of your day-to-day dealings with Centrelink can now be managed online or over the telephone, meaning that contacting Centrelink while you’re away from home shouldn’t be too difficult. For some services you do need to be registered so ensure this is done before you go. Find out more about Centrelink’s online services.
Taking an extended road trip
If you’re planning on hitting the road for any length of time and are selling your home to finance your trip, here is some general information on how this may affect your pension.
- A person’s family home is exempt from the assets test for pensions. However, if you sell your home and intend to use the proceeds on a new home, the money is exempt as an asset for 12 months and possibly up to two years in certain cases. If you put the money in a financial institution or investment, it is still subject to deeming under the income test, even though the asset value is exempt.
- If you purchase a much cheaper house, the remaining money, if banked or invested, would be immediately counted as an asset by Centrelink as well as being subject to deeming.
- If you buy a home on wheels, intending to travel for a while and then buy a new home, any remaining money you intend to later use on a new home would still be exempt as an asset for the original 12 months, and up to two years in certain cases, but the mobile home would usually be treated as an asset. As a non-homeowner, you would have a higher allowable asset level than before, so the inclusion of the home on wheels as an asset may or may not affect you. Depending on your individual circumstances, this may result in a reduction or cancellation of Age Pension.
- You should discuss these issues with Centrelink before making any final decisions, to make sure that you understand how the rules would work in your case. Call 13 2300 for more information, or visit the website at www.humanservices.gov.au.
When you’re on the road in your mobile home, you may decide to put down roots for a short time if you find somewhere you like. Rent assistance may be available to help fund your stay.
- If someone receiving a pension decides to travel in their home on wheels after selling their family home, they may be eligible for rent assistance, which helps them cover the cost of rent in the private market. It also covers caravan site fees or other accommodation a person occupies as their principal home. The amount of rent assistance they may be entitled to depends on how much rent they pay, as well as their personal circumstances.
- If someone receiving a pension decides to keep the family home, but travel in their home on wheels as well, in most cases they are not entitled to rent assistance if they have plans to return to their principal home within 12 months. If they are still travelling after 12 months, even if it’s still a temporary absence, the value of their home is treated as an asset and they may be eligible to receive rent assistance to cover the cost of alternative accommodation.
- It’s important to remember, however, that the value of the house may have a substantial impact on the rate of payment to which someone is entitled.
- If the principal home is rented while someone travels, the rental income is counted as income and may also affect payment rates.
- Those on benefits need to contact Centrelink on 13 2300 if their circumstances change to ensure they are receiving the right payment and the right amount.
- You may qualify for rent assistance if you:
Receive a pension or
Receive more than the base rate of Family Tax Benefit if you have dependent children
Receive an allowance or benefit if you don’t have dependent children, and you
are over 25
are under 25 (under 21 if you receive Disability Support Pension) and living permanently or indefinitely apart from parents or guardians, or
are receiving Youth Allowance at the away from home rate
For more information on rent assistance, visit Centrelink.gov.au