Is my home always exempt for Age Pension

Is my home always exempt for Age Pension?
Generally, we assume that the family home is an exempt asset for the calculation of Age Pension entitlement, but is it always?

Today we are talking about your family home and situations when your home may not necessarily be exempt from Assets Test for Age Pension.

Who is a homeowner?
Centrelink explains this as: You can be regarded as a homeowner if you own or are paying off your home or have a right or interest in your home and that right or interest gives you reasonable security of tenancy.

What is considered a home?
In most cases this is a house or a unit, but it could be a caravan or a boat, if this is what you use as your main place of residence.

What is included in your home value?
Items that are included as part of your home value are:
• the actual home itself (so as described before house, unit, boat, caravan),
• all permanent fixtures such as stoves, dishwashers, carpets, build-in heaters, light fittings etc.
• land around the home up to 2 hectares of private land that is on one title. It could be all land even if greater than 2 hectares, if certain conditions are met. but if not, the excess land is counted as an asset.
• any fixtures on the land, such as garage, shed, tennis court or swimming pool, that is used for private purpose only and on the same title that your home.

Is your family home an asset for calculating your Age Pension entitlement?
In most cases your home is not counted as an asset, but it impacts the way your Age Pension is being calculated under Assets Test.
As a homeowner your assets allowance is significantly reduced. For example, as a single homeowner you get full Age Pension if your assets are below $270,500, while a non-homeowner can have up to $487,000 and still receive the full Age Pension. For a couple homeowners the limit is $405,000 and non-homeowners $621,500.
So as you can see, the assets allowance is much greater if you are a non-homeowner.
Exactly the same logic applies to the assets value at Age Pension cut off point, as you can see the assets allowance is so much greater for non-homeowners than it is for homeowners.

To put it into context, as single homeowner pensioner with assets of $500,000 will receive $299.10pf of Age Pension, while a non-homeowner will get $881.87pf.


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