Homeowner vs non-homeowner (Centrelink – Age Pension)

When going into retirement, secure housing is a big consideration and having your own home that is paid off and owned outright is the goal for many, although it can be hard to achieve.

The Centrelink Age Pension system I believe benefits homeowners (who own their home outright) more than it benefits non-homeowners (note that these are just my personal views). If you don’t have your home paid off and have a mortgage – this can also be challenging as there is no extra payments for pensioners with a mortgage (so in some instances you may be better off financially renting as you might be able to claim some rent assistance).

In this blog, I will explain some differences between the two.

These are firstly what I see as disadvantages of being a non-homeowner from a Centrelink perspective:

• Both homeowners and non-homeowners have the same income test for Centrelink. Now potentially a non-homeowner might need to work more to afford rent etc but is penalised the same for doing so as a homeowner.
• You get paid the same age pension whether you own a home or not.

Some advantages of being a non-homeowner:

• There are higher allowable asset limits you can have before your pension starts to reduce and higher limits before it cuts out. For singles and couples this is $252,000 extra.
• You may be eligible for rent assistance which the maximum amount is $211.20 p.f. (single) and $199 p.f. (couple total).

In today’s property market, especially in Adelaide, finding an affordable rental is tough. Rents have increased just 10.5 per cent in the last year alone (from September 2023 to September 2024 – see article here). Rent’s have increased by this amount + a lot more in the last few years but rent assistance hasn’t from Centrelink. Understandably the cost-of-living pressures everywhere have increased, but if you own your home outright then you don’t have the pressure of rising rental costs in your retirement.

It can be challenging in today’s market to make sure your money is working for you to keep pace with the cost of living whether that be drawings from your superannuation, income stream or utilising Centrelink benefits as an example. Please don’t make any financial decisions based on this article as it is just my views and is general in nature as everyone’s situation is different. There are also a lot of other benefits to renting i.e. don’t need to worry about big property maintenance bills etc – I have just been a bit biased in this article and looked at some of the basic Centrelink comparisons.