The good news is that Centrelink has extended the period you can use the proceeds from the sale of your principal home to buy or renovate your next home, without it affecting your age pension.
You need to tell us when your circumstances change. Then we can assess your eligibility for payments and services using the correct details. This includes changes to real estate assets for you and your partner. Read more about real estate assets and how they can affect your payment.
Details Centrelink will ask for when you sell and purchase a home: Settlement letter of both the sale and then the purchase. Bank statements showing the sale and purchase transactions. Other asset updates to understand where the funds have come from.
Is my home considered an asset? Your home is not counted as an asset when calculating pension or payment, but it does affect how your pension or payment is assessed under the assets test. If you are a homeowner your asset value limit is lower than someone who does not own their residence.
Capital gains
A capital gain is NOT treated as income for social security income support purposes. If a capital loss is made it CANNOT be offset against other income amounts.
You pay income tax on assessable income you receive, such as salary and wages, most Centrelink payments, investment income from rent, bank interest or dividends, business income; and capital gains from selling assets like shares or property.
Exempt income includes: certain Australian Government pensions, such as the. disability support pension paid by Centrelink to a person who is under age-pension age. invalidity service pension paid under the Veterans' Entitlements Act 1986 where the veteran is under age-pension age.
How Centrelink knows your assets without you telling them. Centrelink has multiple data-sharing agreements with government organisations like the ATO, Medicare, PayG and more. This helps them to maintain a view of your assets, and in certain circumstances they may apply additional scrutiny to individuals.
Selling your home when you retire may affect any income support payments you get, including the Age Pension. People who retire often realise their existing home is far bigger than they need or it becomes a challenge to clean or maintain.
Typically, when you sell an asset you must pay capital gains tax (CGT) on any profit made on the sale.
For example, it has the power to obtain your information from other government agencies as well as accessing information from banks, building societies and credit union accounts. It can do this without your prior consent or knowledge. Centrelink's investigation is not limited to recent deposits.
Capital Gains Tax
Any profits made on the sale of a property need to be included in your assessable income in the financial year that you sell it.
This would affect the results of both the income and asset tests. Depending on the amounts involved, you could put your assets over the maximum threshold for benefits and may lose your pension entitlement.
Yes, you have to disclose your inheritance to Centrelink within fourteen days of being able to access your inheritance.
Usually, settlement of property is not assessed as income, meaning no impact on Centrelink payments.
You can request a Statement of Debt for any 5 year period going back to 1998. You can make more than one request.
Centrelink: Call 136 150
Advance Lump Sum $1000 – check how much your benefit would reduce each fortnight to see if you can manage it.
How much equity can I take out of my home? Although the amount of equity you can take out of your home varies from lender to lender, most allow you to borrow 80 percent to 85 percent of your home's appraised value.
How Soon Can You Sell a House After Buying—What Are the Rules? The short answer is that there are no rules around how quickly a homeowner can sell a property after they take ownership of it. If you want to put your home on the market for sale immediately after purchasing it, you're well within your rights to do so.
Some sale contracts will allow buyers to carry out a final inspection of a home on the day of settlement. This inspection is to make sure the home is in the same condition as when contracts were exchanged. After settlement and a final inspection is complete, you can move into your new home.
Assessable income can also be: real estate income from things like rental properties or boarders and lodgers. deemed income from financial investments. deemed income from money in superannuation funds if you've reached Age Pension age.
Reporting your income
Every 2 weeks you must report employment income you and your partner were paid in the last 14 days. You'll need to report your income even if it's $0. If you don't report every 2 weeks, your payment will stop. We'll tell you which dates you must report on and when your income reporting will start.
Different lump sums are treated in different ways by Centrelink. A lump sum is any one-off amount of money that you may receive for a variety of reasons. Some of these lump sum payments will be included in your income test for the Age Pensions and they may affect the amount of pension that you receive from Centrelink.