Mobile-Home pensioners to lose up to $4900 a year.

Jenny Macklin's office confirms that Pensioners failing Centrelinks draconian Asset assesment on self funded caravan and mobile home-owners will have their pension cut by $4900 per year whilst maintaining a loop hole exemption for retirement home and granny flat pensioners.

In a move seen as a slap in the face for caravan owners and caravan park operators but a boon for the retirement home industry, a letter from

Minister Jenny Macklin's office has confirmed that Centrelink Pensioners self funding their own caravans and mobile-homes will continue facing the  draconian maximum asset test and a subsequent reduction of $187.50 from their fortnightly pension.

Whilst pensioners with the same assets prepared to move into retirement home or granny flat arrangements will automatically be granted a $135,000 asset test exemption and still receive a full pension.

Low cost Caravans and mobile homes have now become the financial kiss of death for pensioners.

For many  Pensioners, who have worked hard all their lives, finally got the kids out of their  hair.  Buying a mobile home , Caravan or boat and going to  live the great Grey Nomad lifestyle, traveling and seeing our great country . Is the ultimate dream. What could be better?

  Why wouldn't you want the Grey Nomad Lifestyle?

Unfortunately..From a financial viewpoint Centrelink and the Responsible Minister Jenny Macklin have some very bad news for you.

In a letter to a concerned Mobile-Home pensioner the  Hon Minister Jenny Maclins office has confirmed that the Australian Labor party has no intention of changing Centerlinks draconian asset test for pensioners wishing to  buy and live in a low cost mobile home.

Yes under Minister Jenny Macklin's Labor Policy if you buy your own caravan, Centrelink will REDUCE your fortnightly  pension by up to a third. Or around $187.50 per fortnight, Thats $4875 a year taken away from you simply because you wanted to live in a caravan, Ouch..Whilst at the same time  Granny Flat and retirement home pensioners in the same asset situation get a full pension.

Centrelink's crackdown on on self funded caravan owners who assumed that there caravan was a asset  and that they would be treated as non-home owners for the asset test, the same as granny flat and retirement home pensioners are in for a big shock, Failing  to declare  to Centrelink is a crime and not only could they now fail the draconian home owners asset test and have there pension reduced but they may have to pay back thousands,

How did this situation come about, Well  Centrelink means tests Pensioner based on income (money you earn) and 2 types of asset tests. One for homeowners and a different one for non home owners. Fair enough you say the government can't just give the money away.

As a Caravan owner the first issue you will encounter in your Grey Nomad dream, is that Centrelink  asset tests your dream escape Grey Nomad Mobil home in the same way it treats Bricks and Mortar houses.

When you declare you are living in a mobile home caravan  Centrelink will determine that your  Caravan or  mobile home is your principle home and instead of allowing you the $321,750 asset  test exemption granted to non homeowners. Centrelink instead changes to the  more draconian $186 750 asset test limit used to asses pensioners who are bricks and mortar home owners.  The difference between the non-homeowner and home-owner asset test is $135.000.

In other words if your mobile home is  worth $10,000 ,  it will now have a $135,000 negative consequence on your asset test for your pension.

Yes that 15 year old Toyota Coaster Minibus glowingly converted in the back shed to the Grey Nomad dream escape  vehicle  and fire-sale valuation of $11000 will now be treated by Centrelink as your principle home and you will now be hit with a $135,000 asset test penalty whether your a single pensioner or a couple .

ñExample

A single non-homeowner pensioner with assets of $321,750 will currently meet all Centrelink asset tests and therefor be getting a full pension of $695.30 a fortnight. Or $18,077 per year.

By buying a low cost $10,000   caravan or mobile home to live in,  their Pension will result in a  immediate $187.50 reduction in the fortnightly payment. Or $4875 per year.

In other cases where pensioners have larger assets amounts moving to live in your dream caravan could mean you are disqualified from a pension completely.

Jenny Macklins office stats that the assets test on home-owners applies equally to all.

The problem with what Jenny is saying is that Centrelink  doesn't always apply the asset test  fairly to all !!!!!!!!!!

The government has a special asset test category called extra allowable amount that allows certain privileged  Pensioners to choose how they want the asset test applied.

l  Extra allowable amount for retirement village and granny flat residents

If your entry contribution is equal to or less than the extra allowable amount at the time of entry, you are assessed as a non-homeowner. Your entry contribution will count as an asset. You may qualify for Rent Assistance. The extra allowable amount is the difference between the non-homeowner and the homeowner asset test limits, currently $135 000. Source Centrelink website

Basically if people pay money for a granny flat or retirement home  the government will let them choose whether their granny flat or retirement home payment makes them a home owner or Non Home owner. In other words they get the best of both worlds and are always on the most beneficial assets test. This is a gift to the retirement home industry denied to caravan pensioners.

What has the Granny Flat or Retirement industry done that the Caravan Owners and Associations have not been able to achieve?

Why is Centrelink bending the rules so that the retirement home industry benefits.?

Is Centrelink legally allowed to discriminate against pensioners who choose a caravan over a granny flat or retirement home.?

Can disaffected caravan pensioners mount a class action against Centrelink discrimination between retirement home pensioners and poorer caravan pensioners?

What makes retirement home pensioners and granny flat pensioners more special?

Why cant self funding Caravan and Mobile home pensioners have the same asset test choices as Granny flat pensioners?

Imagine the boost the the Victorian and Australian caravan manufacturing  Industry if pensioners were free to self fund their own Caravans without being persecuted by the government.

In summary pensioners who provided for their own mobile home accommodation are penalised and are only allowed a full pension if they are prepared or able to have a net worth of $135,000 less than a non home retirement home or granny flat pensioner.

We need to fix this ridiculous anomaly .

The simple answer is  just let  pensioners with self funded mobile homes .choose whether they want to be treated as non home owners and have there mobile home  valued at its TRUE asset value ie $20,000 dollars or for those pensioners with larger mobile homes the option  be treated as home owners for the purpose of the pension asset test. Exactly the same as it allows pensioners who have granny flats and retirement home places.

Note. Calculations used in this document are based on current  Centrelink information. 

Centrelink Information for pensioners

Base Pension $695.30 per fortnight.

Asset Test Allowance.

Family situation  For Homeowners         For Non-homeowners

Single                            $186 750            $321 750

Case Study A

Two Pensioner  have $321,750 in assets and each receive a full fortnightly pension of $691.30

One pensioner chooses to live in a rental  caravan , He receives his full fortnightly pension and full rent assistance.                                                        

The other pensioner buys a $10,000 caravan and moves it to a caravan park . He is now assessed as a home owner and now fails the asset test by $135,000 and His pension is automatically reduced by 187.50 per fortnight.  He will receive possibly some reduced rent assistance at a reduced rate.

Pension reduction calculation.

$321,750 less $10,000 caravan total assets     $311,750

Home owner asset test allowance.           $186,750 $311,750 = $125,000 assets above limit.

pension Reduction of $1.50 per $1000.  $125,000 / 1000 * 1.5 =  $187.50 per fortnight.

Note. For pensions, assets over asset test limit amounts reduce pension by $1.50 per fortnight for every $1000 above the amount

Case Study B.

Two non-homeowner pensioners with $321,000 in assets receive full pension of  a fortnight.

Pensioner one  pays $30,000 for a right to a granny flat in there daughters house, and he move in.

Centrelink applies the Extra allowable amount rule and decides that they are a non home owners for asset test purposes and allows them to receive a full pension.

Pensioner two buys a $30,000 caravan and goes to live in it.

Centrelink automatically asset tests him as a home owner and reduces his pension by $157.50 a fortnight,

($321750 -$30,000 -$186,750)/1000*1.5 =105 *1.5=$157.50 a fortnight

Case Study C.

Pensioners who want to live in a $10,000 self funded caravan are only allowed 185,000 in assets  making there allowable  net worth 195,000 before centre link cuts there weekly pension.

Non self providing pensioners  who rent a home, will  get rent assistance from the government  are allowed  up to $335,000 in assets before centre link cuts there pension

A millionaire pensioner can buy a 1,000,000 house and have assets worth $185,000  giving a net-worth of $1,185.000 and still get a full pension,