Applying for The Aged Pension

silkysmooth on 23/03/2023 - 06:29
Last edited 23/03/2023 - 12:02 by 1 other user

Hi All,

I’ve been doing some research to apply for aged pension for my mum. I was wondering if anyone can give my some pointers.

Current situation
- My mum has hit her age to get the pension but she has been renting out her home to get some income. The rent is $415 a week, we organised it like this just so she can get some income but has recently hit the age to apply for pension. She has 2 super, 60 k in one and the other 40k which she slowly gets paid about $400 a month.

As her house is a rental am I right to say that’s not her principal home? She has been living with me currently just to help her out.

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Comments

  • AustriaBargain on 23/03/2023 - 06:37
    -7

    She wouldn't qualify for rent assistance anyway if she's not actually living in her rental. I don't know if it counts as income, subletting a rental, but income test for aged pension is $0 reduction up to $190 a fortnight and then 50 cents per dollar above that. So her pension would be reduced by $160 per week. Not a great deal of money, but might be worth having her subtenant pay their rent to you instead of your mum and just shhhh not tell the ATO about it https://www.servicesaustralia.gov.au/income-test-for-pension…

    • thatsnasty on 23/03/2023 - 07:40
      +1

      Is she subletting? I read it as she owns the home, but is renting it out and living with OP. Maybe I'm wrong

      • silkysmooth on 23/03/2023 - 20:57

        Thanks mate, she’s renting it out.

        Currently lives at my house

  • lostgoat on 23/03/2023 - 07:52
    +1

    Just get an accountant and adjust everything like living in the house and mess around with the super if possible . eg I'd put all assets into the house so your Mum can get the full pension . There nothing better than that for taxpayers .

    • silkysmooth on 24/03/2023 - 06:38

      Speaking to an accountant

  • srven3 on 23/03/2023 - 08:33

    Watch for Capital gains tax on sale

    https://www.ato.gov.au/individuals/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-(home)/treating-former-home-as-main-residence/

    You want it to be her principal home

  • 2jzzzz on 23/03/2023 - 08:47

    Call it board.

    Not finacial advice, do your own research and speak to an accountant.

  • Chewy2221 on 23/03/2023 - 08:49
    +8

    Could I suggest that you make an appointment with Centrelink's financial information service. It is a free service & they will provide a detailed, written report outlining your mother's options, including tax implications & Centrelink entitlement. Good luck

    • pandora on 23/03/2023 - 09:25
      +4

      Great advice! Moreover, FIS are not looking to ‘grill’ you about your ID or obtaining information that could be used against you in any way. I had a 30 minute conversation with FIS, they could not have been more helpful. They may be part of Services Australia but they really do exist to help you make informed choices. Don’t mind saying I was extremely trepidatious, wondering how this might work against me?? Shock of shock - free accurate financial advice with no blowback.

      • barbarella on 23/03/2023 - 11:53

        exactly! I received the best advice this way too :)

  • Elppa8 on 23/03/2023 - 08:55
    +4

    Centrelink applies two tests, income and assets. Whatever one gives the worst outcome for the applicant is the one they use.

  • Sweet3st on 23/03/2023 - 09:20

    Why not stop renting out her home? Move her back in, claim the pension. If she wants some extra income, rent out a room. You could possibly call that board although strictly speaking I think it needs to be a family member, not that they check. You really need her home to be her principal place of residence, otherwise it won't be exempt from the assets test.

    • silkysmooth on 23/03/2023 - 21:00

      Thank you,
      My father passed away there and my mum struggled to live there. So current lives at my house. She only has that house in her name does it count principle place? If she’s renting it?

  • Donaldhump on 23/03/2023 - 09:42
    +2

    1.) consolidate super
    2.) where does she live if she rents out her home. If with you and her house is near by seems simple move back in house and get pension, it negates the rent pretty much.

    if she cant then maybe pension reduced by rent received, probably just as well off leaving house empty

  • holdenmg on 23/03/2023 - 09:59
    +2

    Check that her Property Insurance reflects that she isn't Living there and it is a Rental.

  • Batman01 on 23/03/2023 - 10:51

    Your mum is considered a non-homeowner.

    House is counted as an Asset. Net rental Income is counted under the Income Test.
    Account based pension is deemed.

    https://guides.dss.gov.au/social-security-guide/4/6/3/20

    https://www.servicesaustralia.gov.au/assets-test-for-pension…

    • silkysmooth on 23/03/2023 - 21:09

      She used to live there , been renting it for 3 years.

      So not counted as principle home?

      • Batman01 on 27/03/2023 - 11:21

        No, unless she moves back in her property.

  • lostgoat on 23/03/2023 - 11:03

    The question is after all the assets have been shoved into your own house . What amount of assets are permitted to get the full pension ?

  • TheMindsetTraveller on 23/03/2023 - 11:54
    +1

    Best to speak to an accountant soon, as many income and estate considerations will escalate very quickly.

    At face value, I would move your mother back into her home, and you move in with her. You rent your place out.
    This would ensure that her property is treated as her home and exempt from any Asset test. Even if her home is worth $ 5 million, it would be exempt if she lived there.

    Further, if she needs to go into aged care one day, the home would be exempt and have some short-term exemption status - avoiding the costly care fees (above the basic daily fee) levied when you own (some) assets.

    Assuming the house is now exempt, based on her super amount (and income stream), she would have no issue being under the income test.

    • silkysmooth on 23/03/2023 - 21:10

      Is it better to kick out the rental people and just lock out up the house? Just get the pension?

      • TheMindsetTraveller on 23/03/2023 - 22:05

        Vacant properties are usually treated as an asset, and if the property is in Sydney - likely to be over the asset test by default.

        • silkysmooth on 24/03/2023 - 06:36

          We are in Melbourne

  • Sweet3st on 23/03/2023 - 21:34

    If your mum doesn't want to live there anymore because of painful memories, you should think of selling and buying her a new home somewhere else. Yes you need to get financial advice. It's not her principal place of residence if she is living somewhere else, especially if she's renting it out. You could just leave it empty but that doesn't seem to be a sensible long term solution.

    • silkysmooth on 24/03/2023 - 06:36

      She’s currently living at my other house. Thinking of selling her home but once she gets the cash I’m assuming the money is an asset. I know Centrelink will accept her to live off it

  • Bargain Blesser on 24/03/2023 - 07:33
    +1

    Speak to a reputable financial advisor, as suggested by Pandora, She should be able to sell her home, place a large amount in super, pay for a ‘Granny Flat” interest in upgrading a part of your home for her to live in…if that’s what you both want, and still get pension as well as super payments. Good luck

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