Q. I was just wondering if you could clarify whether I was a homeowner for aged pension purposes. We live in a caravan park which has a number of elderly people over fifty living in cabins. We bought our cabin 18 months ago for $135,000 and currently pay management fees of $275 per fortnight, plus electricity, gas and insurance. I thought we were classified as homeowners, but now not so sure.
A. My co-author on Downsizing Made Simple, Rachel Lane, explains that people who live in a caravan park are classified as homeowners but can qualify for Commonwealth Rent Assistance based on the amount you pay in “site fees” — the rent for the land your home sits on.
The rules you are referring to typically apply to retirement villages and granny flats. Where your home in the caravan park is substantially less than the $242,000 it can mean that you are worse off pension-wise from the different rules.
In your case, the fact that you are living in a caravan park and not a retirement village could be costing you up to $321 per fortnight in pension. It’s just one of many pension anomalies.
Buy a book, or explore the website further for calculators, exercises and lots of helpful resources designed to assist you in your downsizing process.
*Note: This article provides general information and is not intended as specific financial advice. Please consult a professional who understands your unique situation before making any financial decisions.
The original article was published on the Sydney Morning Herald website.
