Pensions cut as rural land values soar

Elderly homeowners are seeing their pensions cut or denied as rural property values soar, according to Simeon Michaels, director of North Coast Corporate Advisory (NCCA).

Michaels told The Echo, ‘We’ve been helping elderly families in dire straits.’

‘Pension-age homeowners are allowed combined assets of $419,000 before their pension is reduced on a “cents per dollar” basis up to $954,000, when the pension is cut entirely. The family home is excluded from the assets test, to a maximum of two hectares. Any acreage beyond two hectares is valued, often unfairly, and included in the assets test.’

‘As property values increase, more and more pensioners are caught.’

He told The Echo, ‘A elderly couple with a nine hectare property tried to claim the pension, but were refused’.

‘Centrelink ran them around in circles, until they gave up. They lived below the poverty line for two years, before confiding in their nephew, who engaged us to help. It took us three months, dozens of calls, and reams of form-filling to find a way through Centrelink’s bureaucratic maze.’

‘A second elderly couple applied to Centrelink for a small loan to repair their home. As part of the application, they submitted a property valuation. Instead of being granted the loan, Centrelink cut their pension entirely,’ said Michaels.

Exemptions to the two hectare rule do exist, he says. ‘Basic information is available online, and Services Australia and charities such as the Salvation Army and St Vincents may assist via their free financial information/ counselling services.’

‘Nevertheless, many pensioners lack the resources to see a Centrelink application through. We’ve been helping a limited number of people in this situation – on a minimal cost/success fee basis where necessary, but I suspect the problem is far more widespread,’ says Michaels.

‘If you own a house in the suburbs, the government doesn’t say: “hey, you’ve got a big backyard, prove you can’t build a granny flat on it or we’ll take your pension off you.” Yet, that’s how they treat rural property owners.

‘The onus is on them to jump through hoop after hoop to qualify for an exemption – or lose their pension.’

‘It’s highly prejudicial.’

NCCA’s contact details: simeon.michaels@gmail.com.