Merlyn’s husband’s uncle lives on a 120-acre farm, and while it could be included as an exempt asset there could be a problem that she hasn’t thought about.
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Q. Merlyn
My husband’s uncle is 90 years old. He owns and lives on a 120-acre farm. He runs cattle on it and makes approximately $20,000 income. He has approximately $500,000 in cash assets. He has never applied for the Age Pension. Would he be eligible?
A. There are a range of factors to consider here, and I’m not sure I have enough information to give you a definitive answer, but I’ll attempt to explain what your need to look out for.
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It is feasible that he could be eligible for the Age Pension, depending on his exact situation.
The first thing to consider is whether he has lived continuously on the property for at least the past 20 years.
If he hasn’t, it will be less likely that he will qualify for the pension. This is because not all of the property will be considered an exempt asset. In fact, only five acres will be exempt if this is the case, which means that 115 acres will be included in the assets test and added to his $500,000 in cash assets, which will likely push him over the threshold to receive a payment.
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However, assuming he has owned and lived on the land for the past 20 years in a row, he may qualify for the whole property to be exempt from the assets test as it sounds like he would pass the land use test by using the land to make an income.
While not including the land as an asset, many people often forget that this exemption does not extend to the value of commercial or business assets. This extends to such things as the value of his farm stock, plus all the related sheds and machinery required in the upkeep and maintenance of the farm.
Depending on the equipment used on the farm and the ownership of it, this could be enough to rule him ineligible for an Age Pension.
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Also, I am assuming that the income figure you have provided is the annual income.
If that is the monthly or fortnightly income figure for the farm, he will be far above the income threshold to receive the Age Pension.
As always, you should certainly book in a meeting with a Centrelink Financial Services Officer to discuss the situation and see whether he would be eligible for a payment.
Do you live and work on a farm? How will your lifestyle affect your retirement plans? Why not share your thoughts in the comments section below?
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