Bob is looking to sell an investment property and wants to know how his pension will be affected.
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Q. Bob
I am 73 years old and own my duplex and also have another one that I rent out. Last year, after all expenses, my net income from my rental property was $9500. I also get a part pension of $760 per fortnight. If I sell my rental property and put the money in a term deposit account will it affect my pension?
A. Without knowing your full circumstances and how much your rental property is worth, it will be difficult to precisely conclude what the effect the sale will have on your pension.
However, your rental property will already be assessed under the assets test, so if you receive the same amount from the sale as the value the property is assessed at, this will not change the overall level of your assets. If you sell the property for more than it has been valued at previously, you may see a reduction in your payments or, if you sell it for less, you may see an increase in your payments.
However, if you do put that money into a deposit account, it will be deemed to be earning a certain amount of interest. This income is then assessed as part of the income test and will ultimately determine whether or not you receive an Age Pension and if you do, how much of an Age Pension you will be paid.
If the deemed income from the amount you have invested is higher than the income you were earning in rent, there may be some effect on the rate of pension that you receive.
You should seek professional advice from a Centrelink Financial Information Services officer to discuss your situation in more detail.
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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.
