Selling home how affects DSP

[bunyip]

hi l am on the DSP and own my own home and thinking of selling and moving , l think l read the proceeds from the sale of a house are exempt from the assetts test while its sitting in my bank account and looking for another house to buy for up to a year ,? is that  correct? But what about the interest l would earn while the money is in my savings account, is that also exempt, if its not exempt would l lose all or most of my DSP under the income test if l had the proceeds from the sale of my home sitting in my bank account earning interest for a year

[bear]

l think l read the proceeds from the sale of a house are exempt from the assets test while its sitting in my bank account and looking for another house to buy for up to a year ,? is that correct?

The above is exactly how it was when I sold a property in 1996 bunyip .....

When I sold another one a couple of years ago, because it was my primary place of residence it didn't attract capital gains tax and the proceeds went directly into my bank account which saw my pension reassessed under the assets test. Fortunately, depending on how you look at it, it didn't take me over the assets threshold so there was no change to my payment.

What the assets limits are for a full pension

When your assets are more than the limit for your situation, your pension will reduce

Single non home owner limit before reduction $543,750.00

For every $1000 in assets above the applicable limit, your rate of pension will reduce by:

$3 per fortnight, if you’re single

Your pension will cease if you have more than $909,500.00 as a single non home owner

www.servicesaustralia.gov.au/assets-test-for-disability-support-pension?context=22276

To find out what the current state of play is, contact Centrelink Financial Information Services 13 2300 and they'll set you straight on how the property sale may or may not affect your DSP.  Just give them.your estimated sale price or your portion of it if it's jointly owned.

www.servicesaustralia.gov.au/financial-information-service

"We help people with their Centrelink issues through sharing our experiences. We have no formal qualifications but we can point you to people who have".

Cheers 🐻

[Denis-NFA]

bunyip

Any interest you earn will be included as income in your pension assessment.

But talk to a financial adviser to see if you can capitalize the interest?!

[bear]

A single person can earn up to $204.00 p/f before losing 50c for every dollar over that amount. That works out at $5,304.00 of interest per year before you'd lose any of your pension. Cheers 🐻

www.servicesaustralia.gov.au/income-test-for-disability-support-payment?context=22276

[dswau]

Nov 29, 2023 19:15:23 GMT 7 Denis-NFA said:

bunyip

Any interest you earn will be included as income in your pension assessment.

But talk to a financial adviser to see if you can capitalize the interest?!

It actually falls under the deeming rules: www.servicesaustralia.gov.au/deeming?context=22276

Scroll down the page for the rates depending on your marital/partner situation. It works out quite well at the moment - Ubank are paying 5.1% at call on their savings account, so you're actually doing quite well parking money in a savings account at the moment. Obviously tax applies to the interest earned, but if your only income is (tax exempt) DSP then you're unlikely to get above the 0% income threshold on the interest earned.

[dswau]

Nov 29, 2023 12:19:33 GMT 7 bunyip said:

hi l am on the DSP and own my own home and thinking of selling and moving , l think l read the proceeds from the sale of a house are exempt from the assetts test while its sitting in my bank account and looking for another house to buy for up to a year ,? is that  correct? But what about the interest l would earn while the money is in my savings account, is that also exempt, if its not exempt would l lose all or most of my DSP under the income test if l had the proceeds from the sale of my home sitting in my bank account earning interest for a year

Have a look at: guides.dss.gov.au/social-security-guide/4/6/3/90 for detail on PPR sale - the exemption period was extended to two years at the beginning of 2023 - this is to encourage age pensioners in four bedroom houses to downsize.

The sale proceeds will be deemed at the rates set out at www.servicesaustralia.gov.au/deeming?context=22276 - and that rate is applied to the income test - not the actual interest that you receive - which when a savings account is chosen properly, will well exceed the deemed income.

Before doing anything, have a chat to the FIS folks www.servicesaustralia.gov.au/financial-information-service - they are really helpful at assisting you in avoiding worsening your position financially in respect of pension payments.