Q. Bev
We have just sold our house and bought another. We have made a little profit and want to put that towards a new car and renovations. Will this affect our part pensions immediately or do we have some time to complete our car purchase and renovations?
•••
A. When you’re receiving a payment or allowance from Centrelink, special rules apply if you are selling your home and are planning on buying or building another.
Any part of the money you receive from the sale that is likely to be used to purchase, renovate or build your new home is disregarded under the assets test for 12 months from the date of exchange of contracts.
Read: Are interest-free loans considered gifting by Centrelink?
The exemption can be extended to 24 months in certain circumstances, which include delays due to council approvals or unique contract terms such as a builder can’t start vital renovations until a specified date.
Any profit you have made from selling your primary residence must be declared to Centrelink and is not exempt from the assets test, which it uses to determine your Age Pension payments. So, if you are using the ‘small profit’ from the house sale to buy a car, or any other asset, or even just putting it in the bank, you must notify Centrelink.
This may change your payments, depending on the value of the car.
Read: Is it possible to get two pensions?
You must notify Centrelink within 14 days of selling your house and buying another or buying any asset, which includes your new car. Centrelink will then review your case and inform you of any change in payments.
There are three simple ways to notify Centrelink of any financial changes that may affect the assets test; through an online Centrelink account through myGov, using the Express Plus Centrelink mobile app or the Centrelink phone self-service.
If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.
