Financial Care Services Newsletter
Volume 12 Edition 1 – 31 January 2022
Financial Care Services, the specialist adviser to seniors in transition to new lifestyles
Welcome to a new year with new challenges for active and healthy living.
But where should I live in my active senior years.
In retirement, we still want to stay physically, mentally and socially active.
Therefore, wise people live where they can access the social support and health services they need.
Smart people also live where they can financially afford to live.
In our November 2021 Newsletter, we looked at where you could live if you had great financial resources or none. Public or ‘social’ housing wait lists are open to people without any financial resources of their own.
Think – bank account under one thousand dollars and just Centrelink income.
This Newsletter considers some options for retirees living independently but near to other people when your financial resources are modest.
Housing options for seniors with modest financial resources.
Retirees with modest financial resources could consider granny flat arrangements or manufactured housing within a lifestyle community when ongoing private rentals are unaffordable.
Manufactured housing parked in a lifestyle community
Manufactured housing could be affordable for seniors with modest lump sums of cash for housing.
You buy your manufactured housing unit and lease a site to park it on.
Manufactured housing units could be as simple as a ‘holiday cabin’ or
as grand as a full three bedroom two bathroom residence.
The critical factor is that your manufactured housing unit is parked but not fixed into the ground.
Once your manufactured housing unit is parked, you then arrange connections to mains electricity, water and sewerage services.
Manufactured housing is usually parked in a lifestyle community that looks like a retirement village or caravan park.
You would need to lease a site from the owner of the property where you park your manufactured housing unit.
Your site lease would include the fees for using any communal facilities and services.
Your lease document would also set out the rules for living in that lifestyle community.
When you leave that lifestyle community, you could take your manufactured housing unit and park it somewhere else. Alternatively you could sell your manufactured housing unit ‘as is where is’.
Some manufactured housing units are sold fully furnished.
The manager of the lifestyle community might help you market your manufactured housing unit to another senior who would like to live in that lifestyle community.
The buyer of your manufactured housing would then need to lease the site from the owner of the lifestyle community property.
Yes, that means the buyer enters two separate contracts with two different parties.
Who sets the rules for parking your manufactured housing unit and living in a lifestyle community
In Victoria, the properties where seniors are welcome to live in manufactured housing, might be covered by the legislation and local Council rules for ‘caravan parks’ rather than the ‘retirement villages’ legislation.
Caravan park owners set the fees for parking on their sites and the rules for living in that lifestyle community.
The land for a lifestyle community might be owned by a private business. But, it could be on public land with the caravan park administered by a government entity such as a municipal council.
A government entity could decide to change the ‘zoning’ or ‘use’ of that section of public land resulting in a notice for you to remove your manufactured home.
The owners of a privately operated lifestyle community could also decide to sell or redevelop their property.
You might be required to remove your manufactured housing unit when the land is to be redeveloped.
Please make sure that you and your wider family, understand the wonders of owning manufactured housing before you buy into a lifestyle community.
Paying for legal advice before you sign the purchase contract for a manufactured housing unit and another contract for a site lease, could be money well spent.
Are seniors living in manufactured housing in a lifestyle community ‘homeowners’ at Centrelink
At Centrelink, if your manufactured home cost you more than $216,500 then you could be treated as a ‘homeowner’ for the Age Pension Asset Test.
But if you paid less than $216,500 for your dwelling recently, then your manufactured home might count as an assessable asset and you could be treated as a ‘non-homeowner’ for the Age Pension Assets Test.
A non-homeowner Pensioner could claim some Rent Assistance for the site lease fees payable to the lifestyle community where their manufactured housing is parked permanently.
Christine at Financial Care Services could help you understand the Pension implications of buying into a manufactured housing lifestyle community.
You do not need surprises from Centrelink and a lower than expected Age Pension as you settle into a lifestyle community.
Granny flat arrangements
A granny flat arrangement is an agreement for a senior to be provided with lifetime accommodation in exchange for an asset.
A really independent living granny flat could be a separate self-contained dwelling built on land owned by the granny flat host. Similarly the self contained section of a home or an additional building on the same site as the hosts’ home could be a ‘granny flat’ for Centrelink purposes. Yes any of those ‘granny flats’ beloved of estate agents, could be acceptable.
But long term occupancy of the spare bedroom and use of the family bathroom in your host’s own home, could also qualify as a granny flat arrangement.
The asset transferred to the ‘granny flat host’ could be a cash payment or the ownership of the granny flat resident’s current home.
But Centrelink expect the cash payment amount to be ‘reasonable’ for the age of the new granny flat residents.
The actual amount of the cash payment impacts your ‘homeowner’ status and Age Pension Asset Test outcome.
At Centrelink, the ingoing cash payment for a granny flat arrangement would be treated as a ‘gift’ to the granny flat hosts if the granny flat residents depart within five years of starting the granny flat arrangement. Therefore before you enter a granny flat arrangement you could think about the potential aged care needs of the residents.
Your granny flat arrangement could include some regular payments to the hosts for meals and increased utility bills.
A formal granny flat agreement documenting the ‘who contributes what’ to the granny flat arrangement and what happens when the health and/or relationships deteriorate could be worth the lawyers’ fee.
Ask Christine at Financial Care Services to help you think through your granny flat ideas to develop a granny flat deal that would work for your family.
Understanding the Age Pension impacts of your proposed granny flat arrangement could help you refine your granny flat deal.
But why not retirement lifestyle community living
Retirement lifestyle community living includes a variety of housing styles for people who have attained age 55 years.
A retirement lifestyle community could be an apartment building that includes some communal recreational facilities or a cluster of small dwellings with a ‘community centre’ also known as ‘retirement villages’.
In Victoria, a substantial ‘ingoing payment’ is usually required to buy into a ‘bricks and mortar’ retirement lifestyle community. Whilst you might be buying ‘the right to occupy’, a lease or a ‘strata title’, the price could be no less than the building costs for your segment of the retirement lifestyle community. Think hundreds of thousands of dollars.
The charitable or community sponsored one bedroom and studio apartments that your parents’ generation might have accessed for ‘token’ lump sum entry contributions, are being phased out.
The units in good condition might now require substantial ingoing payments. The very small older units might need major structural changes to comply with the latest building codes. The result is that some older units are demolished and others are renovated to become social housing.
Thus, retirement lifestyle community independent living units for rent are scarce in Victoria.
In contrast, Queensland has many new retirement lifestyle communities with spacious independent living units for long term rental rather than ‘purchase’.
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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