PPOR Six Year Absence Rule vs The Aged Pension

G'day everyone, I am seeking advice whether the aged pension would be impacted by applying the 6 yr absence rule to rent out parents PPOR of 57yrs, while they moved into a purpose built, rent-free accommodation on our property.

The idea was for them to hold their PPOR for a few years before selling...just to be sure they were happy with the move. Selling PPOR is a very final decision that cannot be undone.

I believe the PPOR is exempt from the asset test and would also be free from CGT if left vacant indefinitely or rented for 6yrs less one day.

However would any income from rent form part of the income test during the 6yr absence period?

And if we were to charge them rent, would we then be able to gift it back to them without it impacting their income test? (Although we'd have to declare the rental income wouldn't we?)

Any other creative structuring/accounting ideas???

 

Contact Centrelink for accurate advice.

You seem to be confusing taxation with pension entitlement, different “rules” apply.

 

The question is would it be their 'principal home' for social security purposes? and the answer I 'no' I think.

See s11 SS Act
SOCIAL SECURITY ACT 1991 - SECT 11A Principal home definition for the purpose of the assets test

pay attention to the 'in a care situation'

 

Vacant property may also be a risk as it is likely to be uninsured AND subject to land tax. And if its not the principal home its a non-exempt asset and may also affect the income test under deeming rules. Consider the centrelink granny flat rules for later use which offer asset test concessions however the ownership of the former home conflicts with that. I dont think you can have both. You may need to seek legal advice on how to ensure the parents have a life interest in a part of your property. No rent is needed. Rent conflicts with the granny flat concession.

 

It's likely that it becomes assessable for land tax as well.