‘We’ve got property and a $450K inheritance, so will my husband lose his pension?’

Q. I am 64 and will be of pension age in May 2021.  My husband is on a full Age Pension, which was adjusted to take my wages into account when I worked three days a week (I’ve been unemployed since my job of two years ended at Christmas). I have a few questions!

We own our home on five acres of land, plus a five-acre block beside us. Our five acres and the extra five-acre block (which is worth approximately $150,000-$200,000) are on separate titles but when it comes to assessing us for rates payments, our local council treats them as if they are one property.

I don’t know whether Centrelink will treat them as one property or two, though, when looking at our assets. Should we attempt to establish them as one title and have the entire 10 acres treated as our principal residence?

We have a line of credit with a current balance owing of approximately $38,000. I recently inherited my parents’ home, which I am thinking of selling for about $450,000. My husband has no superannuation but I have about $100,000 in super. We also have four cars, valued all together at $35,000, but we need to spend some money on our principal home (replacing existing decking, buying a dishwasher, lounge suite and bed, and perhaps putting in a new kitchen) and we would also like to have a holiday because we haven’t been away since 2011.

If I sell my parents’ home for about $450,000, will my husband still receive the pension? Or is there a ‘waiting period’ where Centrelink will want us to live off that money for a certain number of years before we’ve allowed to receive the pension?

Alternatively, should I try to find employment to last me until I’m eligible for the pension or withdraw my super and live off that until May 2021? What would you suggest we do to maximise our chance of receiving the pension when I reach pension age in 2021? 

A. The Centrelink homeowner principal residence exemption applies only to your principal residence and the first two hectares of land covered by the single land title that your home is on. The remainder of the land, even if on a single title (which in your case would be 8 hectares) would be assessed by Centrelink under its assets test when it comes to the Age Pension, unless you qualify for one of the rural customers or primary producers exemptions, which you can read more about here.

Any money you spend on renovations on your home will reduce your assets for Centrelink purposes, and money held by you in superannuation would not be counted until you personally reach pensionable age.

There’s no ‘waiting period’ as such but given the complexity of your situation, you really need to take independent financial advice on the best moves regarding the sale of your parents’ home and how to maximise your Age Pension entitlements. It’s always worthwhile doing your utmost to explore ways to boost your financial position!

Alternatively, Centrelink offers a free financial advice service that will help you explore various scenarios and how they’ll impact your pension entitlements, but you do need to make an appointment. You can read more about the no-cost Financial Information Service here.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.