Centrelink Pension Loan Scheme

Posted on 19 November 2018

The Pension Loan Scheme is a voluntary reverse mortgage provided by Centrelink which allows clients to top up their age pension up to the maximum rate. It allows pensioners to borrow “top up” payments as a loan secured against Australian real estate which must be repaid when the property is sold or the client passes away.

From 1 July 2019, it is proposed that the PLS will be expanded by:

  • Extending eligibility to all clients of age pension age including maximum rate pensioners and increasing the maximum amount of “top up” payments from 100 – 150% of the maximum age pension.
  • While the overall maximum amount of “top up” payments is 150% of the maximum rate of age pension, the actual limit depends on the clients age, how long they intend to receive payments. Whether they are single or partnered, the value of their home and the rate of age pension they receive. These restrictions are in place to ensure they do not have to pay back more than their home is worth.

It had wrongly been reported in the press previously that PLS payments were taken into account for determining means tested fees for Aged Care purposes. It has subsequently been confirmed by Department of Health that this is not the case. Just like other reverse mortgage product payments, PLS payments are exempt income.

Vue Financial

The author is an employee of Vue Financial Pty Ltd, Authorised Representative of Australian Unity Personal Financial Services Limited ABN 26 098 725 145, AFSL 234459.

Important information:

The information on this web page is not advice and is intended to provide general information only. It does not take into account your individual needs, objectives or personal circumstances.