Separating - Assets for Centrelink Purposes

[fionas]

Hoping BG can help with this as the woman on the phone at Centrelink wasn't sure and said to mention it at my appointment.

OK, DP is moving out on 5 April. I will be staying in current home which I own outright. I understand this house is not deemed an asset because it's a primary residence.

DP has bought a house. In order for him to be able to get a mortgage, the bank wanted to use our current home as security AND they wanted both our names on the mortgage for the new home. DP and I have agreed to do that in the interests of getting him out quicker. We will then do a proper financial settlement and put my house in my name and his house in his name.

What I'm asking is whether my name being on the mortgage for his house will mean that house is deemed an asset and reduce my Centrelink payments, even though we have separated and I won't be deriving any income from it? My name is not on the title and is listed as a primary residence (not investment) for the State Revenue Office.

[LimeSlice]

It will affect your financial standing for other things: like "Do you own a property (not your primary residence)?" and "Provide details of your part of any loans?". Even if you aren't paying anything, you technically own half that house. Which means when asked you need to declare it.

Doesn't matter if don't derive anything from it, you are legally able to due to being on the mortgage.

I think you need to call and speak with a more senior person at CL, because technically, you own two houses, and only one can be deemed a primary residence.

[fionas]

Thanks LS - I'll ask when I go for my appointment. In the meantime, I'll see a lawyer re getting my name off the mortgage and the financial settlement sorted out properly.

[briggsy's girl]

yes, it will be deemed an asset in your name. you will need to complete a Mod R (from memory - you should be able to find this on the website) - it will have details about the property - value, equity, derived income. given it is to form part of your settlement you can also apply for special consideration to have it ignored as an asset if it is going to cause you hardship prior to financial settlement.

the hardship provision information can be found here - it gets referred to a specialist team who will assess the situation on it's merits and work out from there whether it can be disallowed as an asset under the assets test. if you are going to be including this as part of financial settlement, it will help if you have started the process (maybe speak to a solicitor who can then provide documentation of the intent for this to be part of the settlement kwim?)

[fionas]

Thanks heaps BG - given that DP has only just bought the place and had no deposit, neither of us have any equity in it because it's fully mortgaged so I'm not sure it will be deemed an asset. I'll have to read up.

In the meantime, will go see a solicitor re financial settlement.

[fionas]

So now I've had a proper look at what's deemed an asset, I should be fine given that it says:

"The asset value is generally the amount of money you would get if you sold the asset on the open market, less any valid debts or encumbrances."

So really, DP's house is not an asset because it's fully mortgaged and we have no equity in it. Presumably.

[briggsy's girl]

it will still need to be declared - it will then be assessed and likely come up at nil equity and income so no impact - always better to declare everything though

[fionas]

Absolutely BG - fully intend to declare it than get asked questions down the track. Life is much simpler when you're honest I've found.