Hi,
I have been searching to find an answer how to invest in property if you have disability
and can not work again.
Daughter has ASD and my wife looks after both of us full time
We Have our PPOR worth approx 350,000 and owe $130,000
We hate being on a disabled pension and want to get off it a.s.a.p
we were hoping that investing in property would help but it seems
centrelink counts rental income as if your receiving the full amount
there for if we were to go ahead and by a house for say $400k and return is 10%
Then we would be completely cut off and our income would be less then $12000 taking into account rates insurance etc would be more likely $6000 or less.
I do have an old super maybe there is a way to grow wealth without affecting centrelink using super probably a long shot.
Could buy in my daughters name but this will still affect us wont it?
does anyone know of any investor that has been on a disabled pension and created wealth through property and has an ebook on the subject.
I have seen the single mother pension ones that doesn’t really apply or I would simply get a job if it was possible in our situation.
It's an interesting question.
Perhaps it has to with the structure you use.
I'm not an expert in these matters, but there are others on here that are.In any case perhaps it could work like this:
You form a unit trust with a corporate trustee to purchase the property.
You provide security for the trust using your equity.
The trust has your daughter as beneficiary.
The trust should be established so as to allow undisclosed family members to become beneficiaries.Good luck with your research
Hi,
I don’t think there be any organisation that specialize in disability pension; as it’s diff in all states and only a very small part of the population.
Just a few tips;1. The disability pension is taken as a “salary” in the bank’s eye- once your on a disability pension it’s very hard to get off…and the income is accepted at 100% full rate
2. The income you get from your new investment is also considered an income
SO really you have your disability pension + rental income as your “serviceability” income….so the question is; is that enough to service your loan + afford for standard living expense? ie can you afford the loan if the rate was 9% ( 2%+)
3. the disability pension is also mean tested; so it’s a good idea to give centerlink a call to see what would happen if you buy this place…because this would affect your ability to make repayments
4. Since you have a bit of equity in your current home- a deposit is NOT going to be a problem; it’s more if you can afford the loan or not ( in the bank’s eyes anyway)
5. For a 10% Yield property it will be located in a rural area/ mining town Or you must have done some creative investing ( renovation/development etc)
just some food for thoughts.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Shape wrote:Hi,I don’t think there be any organisation that specialize in disability pension; as it’s diff in all states and only a very small part of the population.
Just a few tips;1. The disability pension is taken as a “salary” in the bank’s eye- once your on a disability pension it’s very hard to get off…and the income is accepted at 100% full rate
2. The income you get from your new investment is also considered an income
SO really you have your disability pension + rental income as your “serviceability” income….so the question is; is that enough to service your loan + afford for standard living expense? ie can you afford the loan if the rate was 9% ( 2%+)
3. the disability pension is also mean tested; so it’s a good idea to give centerlink a call to see what would happen if you buy this place…because this would affect your ability to make repayments
4. Since you have a bit of equity in your current home- a deposit is NOT going to be a problem; it’s more if you can afford the loan or not ( in the bank’s eyes anyway)
5. For a 10% Yield property it will be located in a rural area/ mining town Or you must have done some creative investing ( renovation/development etc)
just some food for thoughts.
Regards
MichaelThanks for your help to answer your question I have a few creative ways to get property from 11-14%
returns 4 2bedders on 1/4 block etc however the bank isn’t going to lend even though the deal would create 150+k equity our biggest pitfall
is we can’t simply buy 1 property as it will be counted as our full income if you earn $40,000 from a property then you get $0 from centrelink.
so our actual income would be closer to 6-8k on the above 400k purchase scenario.
Bit of a catch 22
christianb wrote:It's an interesting question.
Perhaps it has to with the structure you use.
I'm not an expert in these matters, but there are others on here that are.In any case perhaps it could work like this:
You form a unit trust with a corporate trustee to purchase the property.
You provide security for the trust using your equity.
The trust has your daughter as beneficiary.
The trust should be established so as to allow undisclosed family members to become beneficiaries.Good luck with your research
Thanks Will have to talk to my accountant this setup
christianb wrote:It's an interesting question.
Perhaps it has to with the structure you use.
I'm not an expert in these matters, but there are others on here that are.In any case perhaps it could work like this:
You form a unit trust with a corporate trustee to purchase the property.
You provide security for the trust using your equity.
The trust has your daughter as beneficiary.
The trust should be established so as to allow undisclosed family members to become beneficiaries.Good luck with your research
It probably wouldn't be a unit trust- most likely some kind of discretionary trust with yourself, your wife and your daughter as beneficiaries (whether they are primary, secondary or other kinds of beneficiaries I do not know). Make sure you ask an accountant who knows what they are talking about- not all accountants are familiar with trusts.
Terryw on these forums seems to know a fair bit about trusts, maybe you will strike it lucky and he will post on this thread or you could PM him.
Cheers,
LukeApparently there is a disability Trust.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
I think I remember reading about disability trusts in a book- I think it was in Trust Magic or maybe Family Trusts by Renton, I can't remember, but I think that you are right Micahel.
Cheers,
LukeCentrelink are well aware of trusts and people using them to get around losing a payment. So now there are complex laws under the Social Security Act which mean that it may be possible for trust assets to be classed as assets of the individual if that individual has any role or control in the trust such as trustee, appointor or beneficiary or can control a person who is – such as a friend acting on your instructions.
Special Disability trusts are treated differently. They are given special treatment and it may be possible to still receive centrelink benefits with trust assets/income not counted (up to a limit). There are also special tax concessions for SDTs too.
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
Have you thought about buying something in your super like the NRAS scheme.
The government pays the investor $9,500p/a over 10 years to have provide cheap housing.
My understanding is that you don't pay tax or capital gains when you sell.
You do do need to have enough money in your super for it to be self managed.
You only need to put 30% down as a deposit for the investment and you borrow the rest in your super.
It just another way of building a nest egg for retirement.
Just a though………Really Gapital Gains Tax free when you sell sounds like a cracker of an investment to me.
Always double check with your Accountant as posts made and not reliable sources of Tax Advice.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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