Graham has sold his primary home and plans to buy another in 12 months. He wants to know how Centrelink will assess the proceeds of the sale if he places that money in an offset account for a year.
Q. Graham
We have recently sold our principal place of residence, and plan to rent for 12 months. If we use some of the funds as an offset on an investment loan (existing property) with the proceeds of sale until we decide to buy or build. How does Centrelink view this arrangement?
A. Centrelink will not count any proceeds that you plan to use to purchase your next home as an asset. However, these proceeds will be classed as a financial asset and will be deemed to earn interest.
Placing the funds in an offset account will still have the same outcome – they will be deemed to earn interest. Although your offset account doesn’t earn interest in a traditional sense, it does reduce the amount of interest you have to pay on a loan or mortgage. Also, you have ready access to these funds.
This information is of course only general and before making any decisions, you may wish to make an appointment with a financial information services officer at Centrelink or consult with your financial planner or accountant.
Related articles:
Selling the family home
Are offset accounts an asset?
Can I offset rental assets?
