A reader would like to know about a how overseas assets are counted for Centrelink purposes.
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Peter: This question is from some friends of ours who are looking to retire in August 2025. I have a friend whose wife (dual citizen) still has a house in the Philippines with a title deed in her name. Her family is living in the house and she is not receiving any rent but is still paying land tax (I think that is what they called it) and electricity bills. They say the house and lot would be worth around $250,000. She won’t be eligible for pension for a few years.
When her husband applies for pension next August, will Centrelink know she has this house in his wife’s name even if she hasn’t lived in it for a few years?
If so, will they regard her (and him) as being a homeowner even if they are both also living out of a caravan with no permanent home?
Will this house be classed as an asset worth $250,000 or be exempt if they know about it?
She also still has “a few thousand” dollars in an account in her name as a Filipino citizen, which I think covers power bills and land tax for the house. Will Centrelink know about this money in her account in the Philippines even if she is not sending money back to Australia from it? If so, will this account be added to her husband’s assets?
A. If your friend is hoping to improve his eligibility for the Age Pension because of the above situation, unfortunately the rules are pretty clear. All assets and income from a couple are counted when it comes to Centrelink assessment for payments, no matter where they are.
As for Centrelink ‘knowing’ about any assets or income, no, they will not ‘know’ about it. However, you must declare all assets and income when you apply for the Age Pension. If your friend fails to declare it and it is discovered they have not listed all their assets and/or income they will be forced to make repayments and may face fines or even criminal proceedings.
According to this law firm, if you have defrauded Centrelink, you may be charged with obtaining a financial advantage by deception. If found guilty, the maximum penalty is 10 years’ imprisonment. You may instead, or also, receive a fine between $10,000 and $100,000 and be made to repay the benefit to Centrelink. You are also likely to receive a conviction, which will make it difficult for you to find future employment.
These figures are a bit out of date, but according to the above law firm, during the 2011-12 financial year, 57 per cent of people prosecuted for Centrelink fraud were sentenced to immediate imprisonment. The average fine for the five years between 2007 and 2012 was over $5000. The fines ranged from $100 to $30,000, depending on the amount of money defrauded and the time over which it occurred.
So yes, please declare all your assets and income, unless you want to face prison.
In regards to not living in the Philippines property, your ‘principal’ residence is exempt from the assets test. This is defined as the property you live in. However, as neither of the couple is living in the Philippines property it will be regarded as an asset. If they are living out of a caravan, that will be regarded as their principal residence. Discover more here.
Did you find the Age Pension application hard? Why not share your experience in the comments section below?
Also read: Centrelink Q&A: Is my caravan an asset under pension rules?
