- bevvy68Participant@bevvy68Join Date: 2012Post Count: 2
I am a single mum who is in receipt of single poarent pension. I had a unit with about $110,00 equity and used it to purchase a little house in the country. I was told that by using the equity to buy house I would still be able to keep the pension.
I didn't take the money out of the unit and have a bigger loan on the house. I can only have $75,000 in assets, but a PPOR worth millions.
Using the equity for the house loan, it is still seen as an asset seperate of PPOR? Have I blown my pension. Can I change the loans? I am fixing unit up, no renter, but have changed PPOR to the house already as far as rates and bills and centrelink has my new address. Called tax office but they said they couldn't help and that I need to speak to accountant.
I can't afford much at present as I am covering both mortgages.
Does anyone have some knowledge in this area?
BevvyDan42Member@dan42Join Date: 2008Post Count: 619
Were you living in the unit before you bought the country house?
I was told that by using the equity to buy house I would still be able to keep the pension.
Was it someone at Centrelink who told you that? That doesn't sound right to me, as what matters to Centrelink is the ASSETS, not how they were financed. Changing the loans, from my knowledge, would make no difference.
If I was you, I'd contact Centrelink and advise them of your situation.Pat007Member@pat007Join Date: 2012Post Count: 71
Treat any and all advice from Centrelink as if it was a beaker of acid: fragile at best and likely to burn you either way.
A lot of their stuff is means tested and they tend to expect you to sell any assetts you have to finance yourself (great way of getting people off welfare yeah ?)
Might be worth looking at setting up an ABN or LLC and get legal aid / accounting advice around transfering the property to them as a seperate legal entity
Then at the least they might class the income as counting but not view the house as something that can be sold at their whim to finance your survival. (short term thinking on their part not long term)bevvy68Participant@bevvy68Join Date: 2012Post Count: 2
Hello, and thank you for your reply.
@dan, yes several different consultants in the parenting payment section of centrelink told me I could do this last October.
@pat, I hear you! I have spoken to several different people since purchase and the info has changed each time. I am learning about trusts and property investing, and found that I have so far made 2 of the biggest errors in property, 1 using same bank for more than 1 mortgage and 2 having both properties in my name. Oh well they say you learn from your mistakes.
I found an old post here on property investing : https://www.propertyinvesting.com/forums/property-investing/general-property/7896
It was helpful but confusing.
Centrelink reffered me to this link http://www.humanservices.gov.au/customer/enablers/centrelink/parenting-payment/income-and-assets
The information I had was soooo different that I am now thouroughly bamboozled!
I receive parenting payment single, I was told that apart from PPOR I could have $75,000 in assests.
The page I have linked above says that I can have assets of $696,250. Go figure. It also states that PPOR is not assessable and that "The value of your assets is what you would get for them if you sold them. Generally, any debt secured against an asset is deducted from the value of that asset."
My unit (now IP) was valued by the bank at $250,000, I owe 139,000. My house (now PPOR) cost $168,000 and I owe$163,000. Bank would not tell me what house was valued at as it was for "bank purposes only". I have approx. $50,000 in other assets including a few shares, my car and household/personal goods.
I can get an appointment with the Financial Service Information Officer at centrelink, but I will first call legal aid and see what they say.
I love this site, I only wish I had found it before I did anything!
I will keep you posted.