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A financially Savvy way to start Retirement
February 27, 2017
Servicing a Mortgage: How much should you borrow?
March 14, 2017

Centrelink Pension – Reduced or Gone?

What’s changed?
As of 1st January 2017, you may have lost some of your pension because of the value of assets you own. Whilst some pensioners with lower levels of tested assets received an increase in their pensions, others with higher levels of tested assets have seen their pensions reduce or even disappear.

What is included in the tested assets?
Tested Assets include such things as superannuation, bank and other deposit accounts, shares and investment properties. This can be somewhat confusing so it may be worth getting some advice from your accountant or financial planner.

The “Good News” is that the Family Home is still excluded!

Asset Test Thresholds
The tables below will give you a guideline of the new Asset Test Thresholds:

Table one: Full-pension thresholds
If your assets are below the thresholds in table one, you will be eligible for a full pension under the 2017 assets test.

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Table two: Part-pension thresholds

Table two outlines the assets test cut-off point for those on a part pension.
If you have assets above these limits, you are not eligible for any pension payment.

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Pensioners who have lost their benefits entirely, have also had their concession cards replaced with Commonwealth Senior’s Health Cards and/or a Low-Income Health Care Cards.

What does all this mean?

If you are a single home owner with $550,000 in assets, (eg., superannuation, car, home contents, cash deposits, shares or investment property etc), it’s likely you’ve lost your benefit payment entirely, (about $360 per fortnight or $9,360 per year).

If you are a couple with about $850,000 in assets, it’s likely you’ve lost $480 per fortnight or $12,480 per year.

That’s a huge drop in income, especially at a time when earnings on interest rates are quite low.

So what can you do?

There are usually two options when investment returns are low, and you need more income.

  1. Release/Spend Capital – this could mean selling your home or accessing some of your equity to meet your living requirements. (there are some excellent Reverse Mortgage products available that can benefit you) or
  2. Look for better returns – which invariably means taking more risks, moving funds from safer areas like cash and term deposits, and investing in shares and managed funds.


The solution to your problem could be in your own back yard!

The (not so) Humble Granny Flat.

If you have lost any or all of your pension there is a solution!

You can make good use of the Family Home (an Excluded asset) to generate more income to replace (or even increase) the income you’ve lost in 2017.  You can also add value to your property at the same time.

Here’s how it works.

If your property is large enough, you could install a 60-square metre, brand new, 2 bedroom granny flat in your back yard.  Rent it to a tenant of your choice (possibly even family or friends).


Move into the Granny Flat yourself and rent out the main house. This may be a great option to downsize to a brand new home without leaving your address and friends.

Let’s compare your options:

If you have $160,000 in low earning investments such as cash or term deposits etc, you will be doing well to be earning 2.5% interest at this time. That’s about $77 per week.

If you invested that same amount in your back yard by installing a Granny Flat, you could get a significantly larger return on your money.

What is a fully furnished 2 bedroom Granny Flat renting for in your area? $350, $400, $500 per week?  Whatever the case, it will be significantly greater than the $77 in interest estimated above.

And if you don’t have the readily available funds, ask us about the benefits of using a reverse mortgage to your advantage and still be better off financially.

Let us show you HOW we can help:

  • To have the very latest “State of the Art” Granny Flat installed in your backyard in less than a week! This means minimum disruption to your backyard and discomfort to you and your neighbours.
  • To have professional advice and assistance from a financial planner to give you peace of mind that this investment is of real benefit to you.
  • To help with a choice of loan products that will work to help you achieve your goals and give you a better lifestyle.

We are just a phone call away and here to help you through the entire process.  We understand that this may be a major decision that impacts on you and your family, so we encourage you to include them in any discussions you have with us.

Find our solution in our blog “Lost Centrelink Pension? Our Solution

Register your interest to attend a free information evening or have a personalised appointment with one of our specialists if you’d prefer here