Centrelink pension reverse mortgage
Explore how a reverse mortgage can impact your Centrelink pension in Australia. Understand the rules, eligibility and potential effects on your retirement income.
Centrelink Reverse Mortgage – Home Equity Access Scheme (HEAS)
The Home Equity Access Scheme lets pensioners unlock home value without selling. Learn how HEAS works, who qualifies and how it affects your pension.
MORTGAGE PENSIONERS
How does a reverse mortgage affect your Centrelink pension?
Reverse mortgage funds are loan proceeds, not income, but how they are used can affect pension entitlements. Centrelink assesses these funds under its assets rules and changes in your assessable assets may influence your payment rate. Key points:
Loan proceeds are generally not counted as income
Funds held as assets can affect pension eligibility
Using funds for exempt purposes may limit impact
Professional guidance is essential to ensure your use of equity remains compliant with Centrelink rules. HeyNest connects you with specialists who understand this relationship.
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Centrelink’s rules on reverse mortgage loan proceeds
Centrelink applies specific rules to determine how reverse mortgage funds affect benefits. The critical distinction is between income assessments and asset assessments. Core considerations:
Deeming rules apply when funds are held in financial assets
A 90-day exemption may apply when funds are intended for exempt purchases
Gifting rules limit funds given to others
Understanding these regulations helps prevent reductions or penalties. HeyNest brokers clarify these rules and structure the loan appropriately.
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Am I eligible for a reverse mortgage on a Centrelink pension?
Eligibility depends on age, property equit and compliance requirements, not on income sources alone. Pensioners can qualify if they meet lender conditions and obtain required advice. Typical requirements include:
Minimum age threshold (often 60+)
Adequate home equity in an eligible property
Independent legal and financial advice before approval
Terms vary across lenders, making unbiased guidance crucial. HeyNest connects pensioners with independent brokers who match suitable products to retirement and Centrelink needs.
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Frequently asked questions
Will the interest on a reverse mortgage count as income for Centrelink?
No, the accruing interest is debt, not income, and does not directly affect the income test for your Centrelink pension.
Can I use reverse mortgage funds to pay off an existing mortgage and still keep my Centrelink pension?
Yes, using the funds to pay off a mortgage is generally fine as it reduces a liability, potentially leaving your asset position unchanged for assessment purposes.
Is the amount I can borrow limited by my Centrelink pension amount?
No, the loan amount is based on your age and the value of your home (equity), not your pension income.
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