Age Pensioners away from home
Centrelink are very interested in Age Pensioners who are away from home.
Age Pensioner ‘homeowners’ are assumed to be living in their ‘principal place of residence’. But if you are away from your ‘principal place of residence’ you could lose your homeowner status.
Age Pensioner homeowner’s one year absence from home
You may travel around within Australia for one year without losing your ‘homeowner’ status.
If Centrelink become aware that you have been away from your home for a continuous period of one year, 365 consecutive nights, then you could lose your ‘homeowner’ status.
If you are away for more than 52 weeks, you could be transferred to ‘non-homeowner’ status with your former home treated as an investment property for the purposes of the Age Pension Assets Test.
The impact of losing your ‘homeowner’ status depends on the value of your principal residence.
If the total value of all of your assets including your home is less than $450,000 then as a ‘non-homeowner’ you would not be impacted by the Assets Test.
But. becoming a ‘non-homeowner’ with your former home counted as an investment property could impact your Age Pension payment rate. You could lose your Age Pension if you have substantial equity in your former home.
Consider Betty who is staying long term with her sister on the Gold Coast.
Betty intended to return home after the long Melbourne winter was over but she had a fall fracturing her leg. So Betty stayed on with her sister until she could walk confidently again. Returning to Melbourne in autumn then flying back to the Gold Coast for the winter did not appeal to Betty. So she stayed on for a second winter.
Betty allows her daughter Bella, to live in Betty’s home in Melbourne. Betty thinks that this is just a private family arrangement for Bella to be minding her mother’s house.
But Centrelink know that Betty is having long term health treatment in Queensland. The Council Rates notice includes a capital improved value of one million dollars for Betty’s home in Melbourne.
Once Centrelink establish that Betty has been away from her ‘principal residence’ for a full year, Betty’s Age Pension is cancelled.
Just counting Betty’s home as an ‘investment property’ for the Age Pension Assets Test is enough to have Betty excluded from any Age Pension.
Betty also loses her Pension Concession Card.
Extensions to the Age Pensioner homeowner’s one year absence rule are rare
In special circumstances, Age Pensioners could be away from home for more than one year and not lose their ‘homeowner’ status.
You could expect to show Centrelink documents proving that your home has been damaged by, say, fire or flood.
You then need to show that you are trying to have your home restored but the essential building work is being delayed by factors beyond your control.
Consider Frank and Faye whose home was very badly damaged in a bush fire.
To complete the rebuilding Frank and Faye are required to have their home satisfy new ‘fire safety standards’.
The detailed rules for the new fire safety standards were not published until eleven months after their home was burnt.
Once the fire safety standards were published their builder had difficulty buying the newly prescribed materials.
Centrelink allowed Frank and Faye an extension to their ‘homeowner’ status on account of construction delays that were beyond their control.
Two year transition from Age Pensioner living at home to non-homeowner aged care resident
Permanent residents to Commonwealth regulated aged care facilities are allowed to continue as ‘homeowners’ for two years after vacating their former home.
But once 730 nights have elapsed since both the aged care resident and their domestic partner have moved out, the home is treated as an investment property.
Age Pensioner Selling one home and buying another
You could retain your ‘homeowner’ status and have the money that you are paid on the sale exempted from the Age Pension Asset Test for a period of up to one year from the sale of your former home until the settlement of your next home purchase. But for the period that you are between homes, you will be deemed to be earning interest on the house sale money for the Age Pension Income Test.
Consider recently widowed Mary who wants to sell their sea change retirement home and return to suburbia to be near her children.
Mary wants to look around before deciding where to buy her next home. Mary sold her former home for $800,000.
Mary has financial assets of $100,000 together with $25,000 of personal possessions including her car.
As a single homeowner Age Pensioner, Mary is entitled to the full Age Pension.
While Mary is between homes she can stay as a homeowner for the Asset Test with her $800,000 as an exempt asset.
But the $800,000 is included in her financial assets for the Income Test.
Thus the Income Test could reduce Mary’s Age Pension rate substantially whilst she is between homes.
Your responsibility to inform Centrelink
Age Pensioners must update Centrelink within fourteen days of any major change of circumstances. Moving out of your ‘principal residence’ is a major change.
Age Pensioners must show Centrelink the full paperwork within two weeks of completing the sale or purchase of real estate.
Remember that if you do not provide Centrelink with the details of your new asset position, the great government data matching computer system will alert Centrelink to the transfer of ownership of your principal residence. Centrelink could then treat you as a non-homeowner with the full sale price included in your ‘financial assets’.
Help to understand how your situation fits in the Age Pension system.
Christine at Financial Care Services writes this Age Pension Guide. She can help you to understand your Age Pension situation.
Ask Christine to help you navigate your Age Pension challenge.
Christine at Financial Care Services could help you check if you are eligible for an Age Pension. An estimate of your potential Age Pension amount before you apply could spare you a rejection letter from Centrelink.
Contact Christine at Christine@financialcareservices.com.au or call 03 9808 0338 to book a consultation.
Christine at Financial Care Services is experienced with Pension Applications and the many Centrelink financial means tests.
Christine helps seniors with Centrelink Pension issues.
At Financial Care Services Christine offers ‘personal financial factual information’ consultations to help you check your asset and income position against the Centrelink Pension means tests.
Christine is also able to assist with filling in your Centrelink forms ready for you to sign. She will accompany you to a Centrelink office to lodge your Pension claim form and show your proof of identity documents.
Christine charges hourly rate fees for ‘personal financial factual information’ consultations, assistance with personal data collation, completing Centrelink forms and attendance at a Centrelink office with you.
Email Christine@financialcareservices.com.au now for her Client Services Guide and our Age Pension Personal Data Checklist.
Disclaimer This Age Pension Guide is based on our understanding of the current Social Security provisions. Your claim for a Social Security Pension will be based on your personal situation as documented to Centrelink and the Social Security legislation and Regulations in force at that date.
Updated May 2019
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