Hi, Me and my partner/now ex-partner have an investment property, which is in my name only. I would like to retire so I went to Centrelink to see the financial adviser and I was told that I can't share the investment property with my ex- partner, which will affect my asset-income test. We would like to sell the property and we will share the profit. It means that I will not have the money and I won't be eligible for the pension. Not sure what to do. I have got some private debts. Can I pay out the debts and so reduce the assets? I would appreciate very much if you could give me some advise what can I do. It seems to me very unfair as I am sharing the profit. Looking forward to your answer. Regards Eva
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Centrelink have a rigid set of rules to calculate the Assets Test so your eligibility will be determined by a number of factors. Currently, if you are single and own your own home, you can receive the full Age Pension if you have $258,500 of assets, reducing to $0 Age Pension if you have $561,250 of assets. If you are a non-home owner, full Age Pension is available if you have $465,500 of assets reducing to $0 Age Pension if you have more than $768,250 in assets.
Regarding the assessment of the sale proceeds of your investment property, the Guide to Social Security Law states that when a person gives away assets as a result of a court order or property settlement following a relationship breakup, it is NOT regarded as deprivation for social security purposes. So, if you have a court order or property settlement following your relationship split, the proceeds should not be assessed as a gift by Centrelink. Without the court order or property settlement, Centrelink will likely assess the full property value as your own and any gift you make to your ex will be counted as an asset for 5 years.
Depending on what your personal debt is, using the property proceeds to reduce the debt will reduce your assessable assets. If the debt is investment related, it should be offset against the investment asset value assessed by Centrelink.
Looking toward retirement, it is always important that you have a good handle on how much money you need to keep the home fires burning and how you are going to structure your assets in order to meet those living standard requirements. Having your assets set up in a way that you can draw down an income regularly, which can then be topped up by the Age Pension when you become eligible is an important part of mapping out a Financial Plan.
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