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 Count Financial Limited, AFSL 227232.

Important information:

The information in this article is provided for illustrative purposes only and does not take into consideration your personal circumstances. You are encouraged to seek financial advice suitable to your circumstances to avoid a decision that is not appropriate. Any reference to your actual circumstances is coincidental. Count Financial Limited and its representatives receive fees and brokerage from the provision of financial advice or placement of financial products.


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