Will my Pension or Government benefits be affected?

That depends on your individual circumstances. There are two tests for all benefits received by Centrelink - the asset test and the income test.

If you are receiving a Gov’t Pension or any other entitlement Reverselink strongly recommends you contact a Centrelink Financial Information Services [FIS] or Dep’t of Veterans Affairs Officer to assess any impact a Reverse Mortgage may have on your entitlements. To find your nearest FIS Officer call 13 23 00 or [Click Here] to go to the Centrelink Finance Information Service.

The reference guide outlined below should help you to determine if a Reverse Mortgage may impact on your entitlements. However, it is important that you consult a Centrelink FIS Officer and a Financial Planner prior to proceeding with a Reverse Mortgage.

“Reverselink” are also “Financial Planners” and are experienced in providing sound  financial advice in relation to investing your funds [click here].

The Asset Test;

If the amount borrowed is not spent then;

• The first $40,000 is not counted as an asset for 90 days and any amount over this is counted as an asset immediately and subject to deeming.

Where the amount borrowed is spent then;

• If it is spent on non assessable items such as renovations to your home, holidays, medical procedures and are no longer available to you then it is not counted toward your asset test;
• Where the borrowings are used to purchase an assessable item such as a car or invested then it will be assessed or deemed under the asset test.

It is important to note that where the borrower chooses to take their Reverse Mortgage in regular installments the total loan amount approved for is not assessed eg. a $100,000 loan drawn down over 10 years is not assessed as a lump sum received.

In addition, Reverse Mortgage proceeds are a return of capital and as such tax will not apply.

The Income Test;

Amounts withdrawn from a Reverse Mortgage are not counted for the income test.

Unless, they are held in financial investments eg, a Bank or Building society account, Term Deposit etc. If the funds are used to purchase a specific investment such as an allocated pension then the income received will be assessed under the income test applicable to that particular investment.

If the amounts advanced are spent and are no longer readily assessable then the income test will not apply.

Again, the above information is a brief guide and it is important you discuss any impact a Reverse Mortgage may have on your entitlements with a FIS or Dep’t of Veterans Affairs officer. 

^{*Services offered in conjunction with of GCR Financial Pty Ltd}

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