Recently, I met a lovely couple in their 60s. Between them, they have six children, and they’re both on the Age Pension. They came to see me about a situation that started quite unexpectedly – and has now turned into a financial dilemma that many families can relate to.
About a year and a half ago, an aunt came to stay with them over Christmas. She was in her mid-80s, living alone in her long-time family home in Prahran – a house now worth around $1.8 million. The plan was for her to visit for a few days. But as it turned out, she never really left.
Now, the aunt is settled comfortably with them and has no plans to move back to her old home. The couple didn’t want to renovate or rent it out, and selling it seemed complicated – mostly because they were worried about what it would mean for her Centrelink benefits.
Currently, she receives about $30,000 a year from Centrelink, including her pension and other entitlements. The family’s concern was that selling her home would make her ineligible for those payments.
But here’s where the numbers tell an interesting story.
If her $1.8 million home were sold and she had, say, $1.7 million left after costs, even a conservative return of 4% would give her around $68,000 in annual income – just from a term deposit.
Yes, she would lose her $30,000 in Centrelink payments, but she would almost double her income from investments. And she could still access a Commonwealth Seniors Health Card, which offers valuable concessions on pharmaceuticals.
Because she’s now living with her niece, she no longer needs to worry about household bills, maintenance, or utilities. So her day-to-day expenses would remain quite manageable – even without a pension.
This is a great example of why aged care and retirement planning isn’t always about keeping Centrelink benefits at all costs. Sometimes, selling an asset can actually improve financial independence – and provide peace of mind for everyone involved.
Every situation is unique, of course, but this story highlights how important it is to look beyond the surface. By crunching the numbers and understanding how Centrelink, income tests and health cards work together, families can make informed choices that truly support their loved ones in later life.
Everyone’s situation is different, and the example in this story is for general information only. It’s not personal financial advice. Please get advice that’s tailored to your own circumstances before making any decisions about selling property or changing your Centrelink arrangements.
