A place to call home in retirement
Many long term renters delay retiring from full time paid work. How could I afford to continue paying my rent without a regular full-time wage? The unspoken fear could be,
“I might be without a home in retirement”.
The good news is that you can rent a home in retirement when your only income is the Age Pension. A healthy retiree seeking an independent lifestyle has some choice of home in retirement. Please be aware that the supply of affordable rental housing for seniors is limited. Early applications might yield an offer of a home in retirement when you really need it.
Your permanent home in retirement could be in public housing provided by your State or Territory government.
Public housing includes clusters of smaller home units especially for tenants aged over 55.
All Age Pensioners are deemed to satisfy the Low Income Test for public housing. The Asset test means that you must have less than $30,000 of Assets when you apply for public housing in Victoria.
Waiting lists for public housing can be very long. “Priority listing” might advance your position on the waiting list but it cannot produce additional housing stock.
Hint: Apply for public housing as soon as you become eligible and then be prepared to make alternative arrangements for your home in retirement. You could be waiting many years for public housing.
Your permanent home in retirement could be in social or community housing.
Social housing providers are not-for-profit entities such as housing associations.
The housing associations might receive Commonwealth or State government funding
to purchase existing homes or build new housing stock for low income people.
A home in retirement with social housing could be a self contained home unit or a form of shared housing. Your type of placement in social housing might depend on how urgently you need accommodation. Social housing in shared and/or transitional housing might be your only option if you are at risk of being homeless following relationship breakdown.
The rent for a social housing home in retirement depends on the type of social housing you are allocated and the rules of that particular housing association. Your rent could be set as a percentage of the ‘market rent’ for similar properties in your area or as about 25% of your household income plus any Rental Assistance available from Centrelink.
Your home in retirement could be an independent living unit
in a not-for-profit retirement village.
Many service clubs, religious organisations, migrant community associations and other not-for-profit entities operate retirement villages with some rental independent living units (“ILU”). These rental ILUs are usually only available to retirees who could not pay any ‘ingoing contribution’.
All retirement village residents must be physically and mentally capable of living safely and independently in their ILU. The village manager may require you to move out if
your health deteriorates so that you are no longer coping with living independently.
Each retirement village provider set its own eligibility conditions for entry and financial requirements including rental rates.
Your home in retirement could be a moveable granny flat
so “May I park my home in your backyard?”
You could park your moveable granny flat in the backyard of the home of a friend or family member, with the consent of the land owner. You could live quite independently once you have connected your home to the power, water and sewerage at your new address.
The rental agreement for parking your home in retirement in someone else’s backyard is a matter for you and your hosts to settle.
Read more about Centrelink and granny flats at http://www.financialcareservices.com.au/2012/11/08/granny-flats/
Hint: Please sort out the detail of how you split utility bills and what to do when one party wants, or needs, to move on before you put your granny flat in anyone’s backyard. Writing an agreement at the outset generally costs less in money and emotional trauma than calling in the lawyers when the relationships have broken down.
Your home in retirement could be readily moveable but you want to establish a permanent base.
You could lease a long term ‘permanent’ site in a tourist caravan park or a new seniors residential park as your home in retirement. You could install your transportable home or converted caravan, then connect up to the permanent plumbing and power supply. The park manager would be around to collect the site rent and ensure that the whole property was well maintained.
A transportable home could cost at least $30,000 for modest accommodation.
Your rental increases and site tenure could be very interesting matters
if the ownership or management of the park changed.
Your home in retirement could be in a ‘rooming house’
Rooming house accommodation generally consists of a lockable single room together with the use of a shared kitchen and bathroom.
Community based organisations manage many rooming houses on behalf of the state government housing authorities. These organisations might utilise ordinary suburban homes for, maybe, only four long term residents per house. Some charitable rooming houses could house as many as fifty single men who would otherwise be homeless.
Social support and access to cheap meals are often provided to disadvantaged residents.
Commercial rooming house operators might accept a wide range of people or ‘market’ their facilities to seniors or students or backpackers. Each resident of a rooming house contracts individually with the operator. Consequently you could be sharing the kitchen and bathroom with an ever changing stream of interesting people. `
The quality of rooming house accommodation and the overall amenity of the locations vary markedly. The rental cost of commercial rooming houses is determined by the operator. Whilst Rental Assistance could be available from Centrelink, the rent for private sector accommodation could consume a significant part of an Age Pensioner’s income.
Your home in retirement could need to change as you become less agile
Senior renters who are physically slowing and finding basic housework to be beyond their skill set have some options for home in retirement.
Assisted living facilities offer a home in retirement with some housekeeping support.
Assisted living provides a home in retirement including main meals in a dining room together with some social support. Typical assisted living facilities provide individual apartments or bed/sitting room studios with ensuite bathrooms, together with communal lounges; residents furnish their own rooms.
The not-for–profit Abbeyfield Housing offers small scale ‘assisted living’ style homes in retirement in Melbourne. The rental fee is about 75% of the Age Pension plus the full Rent Assistance available from Centrelink. This fee covers the utility bills and main meals as well as the ‘rent’. Thus a retiree could struggle to provide for her health needs, personal items and a little something for snacks if she had no financial resources apart from her Age Pension. Read more at http://www.abbeyfield.org.au
Commercial guest houses provide full housekeeping services including all meals, and some personal support.
In Victoria these homes are regulated as Supported Residential Services. Each SRS determines its own fee scales and ‘personal support’ levels; some cater for seniors who are physically slowing while still mentally agile. Other SRS focus on seniors with memory problems and/or younger people who are unable to live independently.
The costs for SRS living are determined by the operator. Some SRS are affordable for residents reliant on the Age Pension, or Disability Support Pension; these SRS might charge 85% of the Age Pension plus the full Rent Assistance available from Centrelink. A resident might have only 15% of the Age Pension available for her health and personal items.
The SRS operator can require a resident to leave if the resident requires more personal assistance than the SRS provides. A resident who becomes too frail to walk might need to move on to aged care. Read more about SRS at http://www.financialcareservices.com.au/2012/10/04/supported-residential-services-srs/
Commonwealth regulated aged care is available for people who are assessed as needing ‘personal care’.
A proportion of residential aged care beds are reserved for people of limited financial means who are not required to contribute to the cost of their accommodation. All aged care residents pay a basic care fee equivalent to 84% of the Age Pension.
A resident might have just 16% of the Age Pension for medications and personal items.
Looking ahead to your ideal home in retirement
Affordable rental housing is available for seniors whose only income is the Age Pension.
As the demand for affordable housing exceeds the supply, early application is advisable. Your ideal home in retirement might not be available at a rent that you could afford.
Emergency and transitional housing is available for seniors at risk of becoming homeless.
Read more about seniors rental housing at Home at Last: Housing for the Aged Action Group http://oldertenants.org.au/
If you would like further confidential, independent and professional advice about Centrelink, lifestyle or financial issues please contact Christine Hopper (03) 9808 0338.
Financial Care Services – call (03) 9808 0338
Disclaimer: The information contained in this website is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations. © 2013 Financial Care Services Pty Ltd. All rights reserved.
To make an appointment for professional advice, call Financial Care Services
(03) 9808 0338