The in laws have always dreamed of buying 100 acres or so to live out their twilight years, build a mudbrick home, have a veggie patch, a creek, a couple of goats, chickens, motorbikes for the grandkids, etc.
They would be selling their home in the city, worth about $380,000. After building and setting themselves with new furniture, the swap would use up most of that, perhaps leaving $10-$20,000 in the bank for emergencies.
But I was reading on the Centrelink site that only the first 2 hectares (about 4.9 acres) is exempt from an assets test, unless they've lived there for a couple of decades! Any land larger than 2 hectares they have to use to make an income, or, their pension gets reduced for every hectare above the first 2!
I couldn't believe what I was reading to begin with. It just doesn't make any sense to me and really STINKS. They could just sit growing their backsides on their couch in the city, in a multi-million $ home, that would be completely exempt and get their full pension. But if they move to a shack on 100 acres, they'll lose pension at a prorata rate on 95 of those acres.
For goodness sake – they only want to enjoy some peace and quiet amongst the wildlife before they either die, or become so sick they are unable to. But to be forced into working any land they buy will ruin that idea.
Gee Centrelink rules are so STUPID sometimes.
So I was wondering… Does anyone know how they can still do this? Or have I misunderstood? Can they buy about 100 acres but be left alone by Centrelink and still get their full pension?
I'm even open to "less-correct" suggestions. For instance, I was thinking if they could buy acreage and just pay Aust Post each year to redirect their mail. That way it would appear they are still living at their first address. If they got "found out", they could just act dumb saying they didn't realise it was necessary because the acreage was the same value as their original house, and they still had the original address anyway, because Aust Post kept sending them the redirection renewal each year.
Any suggestions from people (or relatives) with acreage, or maybe someone who works/has worked for Centrelink are welcome.
Could they instead put their rural retreat into a "Trust" with their kids/grandkids as beneficiaries. Then they technically do not own it.
Centrelink has been onto trusts for a number of years. They treat trust assets as your own if you are control a trust, are appointor, trustee or beneficiary.
So you must be careful. Maybe a child or grandchild could set up a trust which excludes the grandparents as beneficiaries and the grand parents could rent the place from the trust – and maybe get rental assistance.
Also need to be careful about the disposure of assets, I think they look at any disposal up to 2 years prior. Some if the grandparents sell their house and gift the money to someone and then apply for the pension they will probably be treated as if they still had that asset.
But all this could be over come with careful planning.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Its not Centre Link its the Federal ALP treasurer trying to rip money out of working Australians to cover the projected budget deficit..
What was happening was that well paid city workers would have a hobby farm in a rural location and claim a primary producer benefit and losses incurred. This new budget puts a stop on this which will kill a lot of rural towns.
Also company owners or directors who use company assets for private use are also a target.Hi Duckster, do you have a link to these new rulings. I cant find one at the moment
Thanks
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