Centrelink Question re: renting house and mortgage

[Lukesmum]

We have a mortgage and as some of you know Dh has just been made redundant. We are trying to do what we can to keep our house. It is too late to ring centrelink now and I have an appointment with them on Friday morning. I am wondering if we rent our house is the rent classed as income even if you have a mortgage. The rent won't quite pay the mortgage so it isn't money we can use to live on but if it is classed as income centrelink won't pay us much at all because it would be about $390 we would get in rent each week but it would go straight off repayments. I hope that all makes sense.

[Bumperstump Cummerbund]

I'm not an expert, but I'm pretty sure rental payments are classed as income. The reason I say this is we had a dodgy landlord (a while back) who wouldn't sign a rental agreement because it would affect her pension - the result being we couldn't get rent assistance despite both being out of work.

I did read something just recently that banks are being a LOT more caring about mortgage repayments - have you spoken to your bank manager? Ultimately it's better for the bank if you retain your house, as opposed to repossessing the house etc.

The earlier you speak to the bank, the more they can do for you. They're actually pretty helpful, as long as they know what's going on, KWIM?

HTH chicky

[Visitor7]

If you rent out your house, that is classed as an asset and the rent is income, which you have to declare to Centrelink. And depending on its value, you may have a longer than usual waiting period before payments can start. Reason being is, if you assets (like Real Estate, except for the house you're living in) then they are able to be sold. That's the way Centrelink will look at it. If you're living in your home, they don't look at it like that.
Before doing anything like that, I would seriously consider speaking with a financial advisor. They'll let you know what the best options are for you ATM.

[briggsy's girl]

yup - what jodi said!

given you're looking at income support, not just ftb - the rental property will reduce the amount of payment you get as it's technically a "liquid assett" and can be sold off. be VERY wary about what you do. speak to a financial advisor. talk to your bank. moving out of your house and using it as a rental property WILL impact your eligibility for payment and may actually leave you financially worse off than staying there, negotiating interest only payments with your bank and struggling through...

[Lukesmum]

Thanks for all your help. I had an interview at centrelink yesterday and it is not really a good idea for us to rent out our house. We wouldn't have enough money to pay rent on another place and live. We still haven't totally decided what to do yet. DH redundancy will keep us going for 2 months so I am really hoping that he finds a job before then or we will have to sell. We will have to wait 8 weeks before we receive centrelink payments because of the redundancy. I will be back to update more if we have any changes. Especially if DH gets a job.

[HotI]

Are you able to take in a boarder to help you out with the mortgage? (You would have to do the calculations again to see if it is worth it)

[rarmalb]

I hope it works out for you. Could you perhaps consider selling and purchasing a smaller property?