Centrelink Matters … asset test questions answered

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Centrelink issues for grey nomads
What are the implications of selling the family home?

By Hank Jongen,
General Manager,
Department of Human Services.

Hitting the open road in a motorhome or with a caravan in tow might be high on the bucket list for many travellers. But, before you take the leap, it’s important to understand what this will mean for your Centrelink payments and if this may impact you in the long run.

Centrelink payments are subject to an income and assets test. We need to assess any income earned and the value of your assets so we can calculate your correct payment rate. Any assets you own in and outside of Australia, including real estate, life interests, financial and superannuation investments, income streams, and business assets will be taken into account.

We also assess the market value of other physical assets, such as motor vehicles, boats and caravans. There are multiple income and assets tests that we use for various payments, but for the sake of simplicity, we’ll focus on the income and assets tests for pensions.

The assets test free area is the value of assets you can have in addition to the family home, in order to qualify for a full pension under the asset test. As at 1 July 2018, homeowners need to have assets below $258,500 if they’re single, or $387,500 for a couple combined, and non-homeowners need to have assets below $465,500 for singles and $594,500 for couples combined, to receive the full rate of pension under the asset test. Anything over this limit will reduce your pension rate, and you will receive a part pension under the asset test.

Part pensioner homeowners can currently have assets up to $564,000 if they’re single or $848,000 for couples combined. Similarly, part pensioner non-homeowners can have assets up to $771,000 for singles and up to $1,055,000 for couples combined.

These figures might be higher if you receive rent assistance. Once your assets go above these limits, known as cut off limits, your payment will cancel. These assets test values are indexed regularly and it’s best to check the Human Services website for the most current information. So what does this mean for the family home?

One of the most popular questions we get asked is whether you need to sell the family home in order to purchase a caravan or motorhome. For the purpose of the assets test, the principal home – that is, the family home – is exempt.

We consider the principal home to be the one in which you spend the greatest amount of time each year. If you are temporarily absent from your principal home, it can still be considered an exempt asset for up to 12 months. The caravan or motorhome would then be assessed as an asset.

However, if you are travelling around Australia for more than 12 months, this is where we need to look at whether your principal home is one on the ground or one on wheels. If you have vacated your principal home for this entire time, we may need to define your caravan or motorhome as the exempt principal home, and your family home will become an assessable asset.

If you decide to rent out your home while you’re travelling, you need to let us know as soon as possible, or you may risk being overpaid and incurring a debt. This can be a complex area to navigate and everyone’s circumstances are different, so not one size will fit all.

The best place to start is with our Financial Information Service. This is a free service run through the department to help you understand your finances. Our network of specialist Financial Information Service Officers (FIS Officers) can speak to you over the phone or in person. FIS Officers can also provide information to assist you in planning for your retirement.

FIS Officers run a series of free seminars across the country. Click here to find a seminar near you. Of course, if you decide the take the plunge and purchase a new set of wheels, make sure you keep us informed about any changes to your assets.

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14 Responses to Centrelink Matters … asset test questions answered

  1. Hank makes things sound so simple when, as anyone who has interacted with Centrelink knows, it is anything but. Different answers to the same question, Centrelink employees who don’t have a clue because your query is a little unusual and/or is outside the parameters of the script they are supposed to follow and trying to get an appointment with a FIS officer, forget it. What Hank needs to do is try applying for some of these benefits without revealing who he is or what he knows; take some time out and travel to some of the free camps and caravan parks and talk to those who just about went batty trying to navigate the mess of a system created by Hank and his cronies.

  2. If I understand this correctly, Hank and his mates will exclude your principle residence (Home) from the asset test but your RV is included. This makes sense unless you decide to go on that big lap holiday and you are away for 8 mths or more. Then Hank and his mates reverse this and all of a sudden you could have many hundred of thousand dollars added to your assets and then you could jeopardise your pension. What clown comes up with this thinking.

    • Hanks belief that being on the road full time changes your house to being an assessing asset, is only one that a public servant could conclude. Most travellers will return to their home, and hat would to my thinking, be the indicator of the house being your non assessable residence.. But most things about Centrelink are not sensible

  3. We are not travelling fulltime but still found it extremely difficult to apply for the pension. Form after form and staff not competent to answer your questions…. instead they say NOT ENTITLED..

  4. THE WHOLE ( CENTERLINK – PENSION ) SYSTEM IS AN TOTAL CONARTIST CONFIUSING DENEIING SYSTEM !
    WHY THEY NOT ENGAGING ( NEW SEALAND ) SYSTEM = ANYBODY 65 WILL AUTOMATICLY GETTING AN BASSIC PENSION ! AND SAVING MILLIONS OF $ IN CENTERLINK STAFF !

    • Sounds good

    • but then tell the whole story too ..you are taxed on your pension etc etc
      Yes ..explain the whole system not part of it

    • good idea but the public service union will whinge about job losses.

  5. If this system is so simple, why are pensioners using solicitors to access the pension. Our country has dropped to an all time low. They’re shutting the Byron Bay office is being closed. The government has gone overboard with stopping Australians from accessing any benefit.

  6. dont forget if you rent your house out for more than 6 years you will lose your non tax status, even if its your only house

  7. Typical. Work all our lives and pay taxes. Then if we decide to travel for more than twelve months our caravan becomes our home, and our only home becomes an assessable asset. What an absolute load of BS. So retire, and sit at home all day twiddling our thumbs hoping centrelink doesn’t Change the rules. Again.

  8. Be honest with Centrelink and you won’t have a problem. We’re happy and we don’t go without.

    • SOME HOUSE WIVES WILL PROCESS YOUR CLAIME ! 3
      THEY ALLWAISE WILL FIND AN REASON ( LIKE WERE NEED MORE PAPERWORK TO REEFUSE YOUR CLAIM
      IM MADE SEVERAL ATTEMPT TO CLAIME OLD AGE PENSION IM NOW ALLREADY 69 AND STILL BE RECECTED ! BECAUSE IM WAS PROBABLY TO HONNEST WITH CENTERLIK ! MAX 99

    • Problem with all gov agencies the more honest you are the more they burn and regulate you. I have nothing at all to do with centrelink as still working but i have seen numerous situations where good honest people do everything right completlely honest and get totally railed by centrelink. And then you have some lazy rotten scum bludging off every claim possible totally dishonest not one true detail about them and never ever get questioned or harrassed by centrelink.

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