Financial Care Services Newsletter
Volume 11 Edition 11 – 30 November 2021
Financial Care Services, the specialist adviser to seniors in transition to new lifestyles
Where to live in retirement
In retirement we no longer need to be present at work every week. We then have so many more options about where to live in this vast country.
We can choose to live in a big city, a regional city a country town or an isolated spot. We could choose the centre of town, suburbia or a complete tree change or sea change.
Having decided on a location then we can consider the type of housing that best meets our needs for social engagement, family contact and independence. Remote may sound fantastic while you are really healthy. But do you need a two hour round trip just to have a prescription filled.
Homeowners seeking a comfortable home with access to support services
Seniors who already have a significant asset such as a mortgage free suburban home or substantial superannuation account, have a wide range of independent living options.
The basic housing types for independent living include staying in the family home on a suburban block, downsizing just the garden to townhouse or luxury apartment living or rightsizing to a smaller home unit.
For seniors preferring lifestyle community living, there are villas, townhouses and apartments to ‘buy’.
To cover the costs of the communal facilities and services these lifestyle communities usually charge both monthly service fees and ‘exit fees’.
Remember that on entering a retirement lifestyle community you are buying a ‘lifestyle’ not a ‘property investment’.
Before you sign the Resident Contract for a lifestyle community villa, serviced apartment or retirement village independent living unit, ask Christine to help you understand your costs and the Centrelink implications.
Non-homeowners seeking secure comfortable homes with access to community support
Seniors with modest assets on retirement from fulltime work could be looking for affordable housing.
Having “affordable housing” is the opposite of experiencing “housing stress”.
One description of “housing stress” is spending more than 30% of your income on rent or mortgage payments.
Public housing and social housing for long term Centrelink income support beneficiaries with no savings
The more affordable housing options include ‘public housing’ provided by the State authority and ‘social housing’ sponsored by community or charitable organisations.
Public housing waiting lists are long. To join the public housing waiting list you might have less than one thousand dollars of financial assets; that means no more than $1,000 in the bank.
Public housing applicants are expected to be long term Centrelink income support beneficiaries. You could be a DSP or Age Pensioner, or ‘early retired’ doing voluntary work to continue qualifying for higher rate JobSeeker/NewStart.
Escapees from violent domestic situations can apply for public and social housing immediately.
Younger people who are not able to work on account of ill-health or caring responsibilities could also qualify for public or social housing.
In Victoria, public housing rents are not more than 25 per cent of your total household income.
‘Household income’ includes the wages and payments from Centrelink and DVA, for all of the people living in your household.
Centrelink and DVA do not pay ‘Rent Assistance’ to public housing tenants.
Social housing
Charitable and community housing groups also offer ‘social housing’ to people with few financial resources.
The sponsors of social housing could receive some government subsidy or concessions, for providing housing at less than market rents. Hence, community or social housing rents could be capped at 30% of household income plus any Rent Assistance that you could claim from Centrelink or DVA.
Social housing tenants could also be asked to contribute to the costs of maintaining any communal facilities, lawns and gardens.
Public and social housing offers secure housing for your lifetime; well behaved tenants can only be required to move out if the property needs renovation.
The dollar amount of rent that you pay for public or social housing depends on your household income. If you have other income in addition to your Centrelink income support benefits then your rent would be increased in dollar terms. But you cannot be asked to pay more than the ‘market rent’ for your public or social housing.
Borrowing a public housing granny flat to park in the backyard of your friend or family member’s home.
The Victorian public housing authority rents out self-contained movable housing units that can be set up in the backyard of a friend or relative’s home. These movable housing units are like ‘granny flats’ and must not be parked more than ten metres from an occupied house on that property.
These moveable units come in standard formats similar to holiday park cabins. The layouts cannot be changed but disability features such as grab rails and ramps, could be added.
Once installed by the State housing authority, these moveable unit needs to be connected to the water and sewerage systems for the host property. But the unit would have a separate electricity meter.
These moveable units are a type of public housing. Thus the rent for the use of the moveable unit would not exceed 25% of your ‘household income’.
To access a movable unit from the Victorian public housing scheme you need to qualify for public housing and have family or friends that are willing to host a public housing moveable unit.
The public housing authority would deliver and install the moveable unit on a reasonably level space in the backyard of a house that is occupied. Public housing moveable units cannot be placed on to ‘vacant land’ or far from the existing housing on the host’s property.
When the public housing tenant moves out the public housing authority would disconnect the services and remove the moveable unit. This removal would take time to arrange; think a few months not next week.
More information for retirees with family or friends that are willing to host a public housing moveable unit Public housing movable units | Housing.vic.gov.au
Retirees with modest assets, too much for public housing too little for buying a place to live.
When the work income ceases, retirees with a modest level of assets could be challenged to find secure affordable long term housing.
If you cannot afford to pay off the mortgage on your own home then you might need to sell; but would your equity then be enough to buy another place. If all of your financial assets are absorbed by the ingoing payment for retirement lifestyle community, the ongoing service fee could be beyond what you could afford as a Pensioner.
Seniors who were renting or still paying off the mortgage, when retiring from full time work could be ineligible for public housing. But renting in the private market could absorb much of the Centrelink payments resulting in severe ‘housing stress’.
Another Newsletter will look at housing options for seniors with modest financial resources. We could explore granny flat arrangements, manufactured housing and retirement village rentals early in 2022.
Christine at Financial Care Services your independent adviser
Financial Care Services is an independent advisory service specialising in retirees of modest means and aged care entrants.
Our core values include working with clients in claiming DVA and Centrelink entitlements.
The team at Financial Care Services are here to answer your Age Pension questions and guide your understanding of aged care costs.
Help with Centrelink challenges is available from Christine Hopper at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles.
Christine has neat handwriting just right for inserting your data into small printed spaces. She helps clients complete Centrelink forms.
Christine could help you with collating your supporting documents and then mailing your form to Centrelink.
Assistance with completing Age Pension Claims and the Commonwealth aged care means testing forms is available to clients of Financial Care Services.
Christine charges fees based on the work involved in advising you about pensions and aged care fee solutions.
To make an appointment for confidential, independent and professional advice about aged care, retirement lifestyle costs, granny flat or Age Pension issues please contact Christine Hopper or call +61 3 9808 0338.
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Christine Hopper
Financial Care Services Pty Ltd
Independent aged care, strategic lifestyle and Social Security advice for seniors in Melbourne, Victoria, Australia
Telephone – call +61 3 9808 0338
Email – contact info@financialcareservices.com.au
Address – mail to 172 Warrigal Road, Camberwell Victoria 3124
Website – visit financialcareservices.com.au
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Disclaimer: The information contained in this newsletter is of a general nature only and does not constitute “financial advice”.
All eligibility for Commonwealth benefits will be determined by Centrelink or DVA, based on your personal position as documented and the legislation and Regulations in force at that time.
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