Is my home considered an asset? Your home is not counted as an asset when calculating pension or payment, but it does affect how your pension or payment is assessed under the assets test. If you are a homeowner your asset value limit is lower than someone who does not own their residence.
If you take out a mortgage using your home as security, and give the money to your children or anyone else (for example, to help them buy their own property), Centrelink will treat the loan as your asset and deem that you are earning income from the money you borrowed. This may mean your pension will be reduced.
financial investments. home contents, personal effects and vehicles. real estate, annuities, income streams and superannuation pensions.
Assets Test
A single homeowner can have up to $634,750 of assessable assets and receive a part pension – for a single non-homeowner the higher threshold is $859,250. For a couple, the higher threshold to $954,000 for a homeowner and $1,178,500 for a non-homeowner.
If you use a part of your principal home for business only, that will be included in your assets test - land or buildings. Centrelink advises you need to contact them within 14 days of selling the home.
Is my home considered an asset? Your home is not counted as an asset when calculating pension or payment, but it does affect how your pension or payment is assessed under the assets test.
Yes, provided you have reached the Age Pension age, you may be eligible for the Age Pension even if you have super savings.
For every $1,000 over the limit (for your situation), your pension payment will reduce by $3 a fortnight. This is called the 'taper rate'. There's also a cut-off point. If your assets exceed this value, you mightn't get the Government Age Pension at all.
We check your bank account information is up to date. We do this to check we paid you the right payment and amount in the past.
Pay down debt
By paying off your credit card, personal loan, home loan or any other debt, you will reduce the value of your assessable assets and boost your rate of pension. For example, paying off $50,000 of debt could increase your pension by $3,900 per year.
For example, it has the power to obtain your information from other government agencies as well as accessing information from banks, building societies and credit union accounts. It can do this without your prior consent or knowledge. Centrelink's investigation is not limited to recent deposits.
Your rental income usually affects your pension if you are earning from leasing real estate you own. There are some exceptions, like if you are in a care or aged facility. There are also exceptions when it comes to medical conditions like intellectual disabilities.
The inheritance won't affect your income or assets test if you put it in a super fund if: you're under Age Pension age. you haven't started drawing on the fund.
Assume, for example, you will need 65 per cent of your pre-retirement income, so if you earn $50,000 now, you might need $32,500 in retirement.
The Bottom Line. For some, a lump-sum pension payment makes sense. For others, having less to upfront capital is better. In either case, pension payments should be used responsibility with the mindset of having these resources support you throughout your retirement.
How much super you'll need in retirement depends on the lifestyle you want. According to the government's MoneySmart website, if you own your home, the rule of thumb is that you'll need two-thirds (67%) of your current income each year to maintain the same standard of living.
The first full payment at the new rates of pension will be payday 6 April 2023. The maximum rate of single service pension will rise by $37.50 to $1,064.00 per fortnight and the maximum rate for couples will increase by $28.20 to $802.00 per fortnight (each).
Loans. A loan (from an older person to a family member) is not included in the gifting amount and will not affect the older person's pension rate. However, this needs to be a genuine loan and Centrelink will require proper documentation and evidence, as a verbal agreement is not enough.
Depending on the amounts involved, you could put your assets over the maximum threshold for benefits and may lose your pension entitlement. You could also be deemed as receiving income from the deprived asset, which could put you over the limit on the income test as well.
Can you get a home loan on Centrelink benefits? If you receive Centrelink benefits, some lenders will consider these payments as part of your income when assessing a home loan application, but approval is not guaranteed.
Typically, when you sell an asset you must pay capital gains tax (CGT) on any profit made on the sale.
Under Australian law, you can give real estate to a relative as an outright gift. When giving ownership to a third party, there is no exchange of money. The gifting process involves filing a Transfer of Land with your title office. Filing a gift deed may also be necessary.