Centrelink Q&A: How is overseas property assessed?

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Maria has property in Spain that she is unable to sell. She thinks this will rule her ineligible for an Age Pension, but are there any special considerations?

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Q. Maria
After reading your article on non-homeowners, I would appreciate your opinion on my situation. I am currently renting a small flat in Brisbane and depend on my landlord not increasing the rent. I also own a villa in Spain that I cannot sell due to council problems. The property has never been rented out and I don’t get any income from it. In fact, the only thing I get from it are maintenance costs and rates. I have been a resident in Australia for the past six years and am an Australian citizen. I haven’t applied for a pension because the Spanish property will not pass the means test as an investment. Is this correct in my case?

A. The article you refer to discussed the fact that if you don’t own your primary residence you will be classified as a non-homeowner for Centrelink purposes.

This means that when applying for the Age Pension you will have more generous allowances for both your income and asset assessments. However, you will still be subject to the means tests and your villa in Spain will still be considered an asset, even though it seems to be causing you much consternation.

There are certain asset and income limit tests you need pass before you are granted a pension. If your assets or income exceed those required for a full Age Pension, you may be eligible for a part Age Pension.

You can still receive a certain amount of income and receive an Age Pension. This income can be derived from investments, property rental or as a salary from employment, as well as several other means.

Exceeding the fortnightly income limit will see your pension reduced by 50 cents for every $1 over the limit, until you reach the disqualification limit for a part Age Pension, at which point your Age Pension payment will cease.

Asset test limits are used to determine whether you qualify for an Age Pension and, if so, at which rate it will be paid. Your fortnightly Age Pension payment is reduced by $3 for every $1000 you exceed the full Age Pension asset limit. Once you exceed the limits for a part Age Pension, your Age Pension payment will cease.

Your assets, whether held within or outside Australia, will normally be assessed at their market value. Any debt owed against the asset will normally be deducted from the calculation.

You will be eligible for a pension if your total assets are under $797,500 (assuming you are a single), if your total assets are above this value, you will not be eligible for an Age Pension.

Do you have a question regarding the Age Pension or other Centrelink benefits?

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Written by Ben

4 Comments

Total Comments: 4
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    In Maria’s case I probably would consider living in the property in Spain (when the border opens). The value would be zero, house owner. Could get the full pension overseas from Australia if 35 years qualified residency here in Oz. Wait to sell the place and then come back here. The Aussie pension probably would not be enough to live on in Spain since they use the Euro now. In the 90s it was much better with Pesetas.

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      Mariner … Totally agree she is doing all wrong ….. she should apply for pension and show her residence in Spain … a lot cheaper life and great food he he he he

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      She has only been here 6 years, there is a reciprocal agreement with Spain, but it would depend on how old she is/was when she started residing here. The property could be considered an unrealizable asset under hardship provisions if she can prove she can’t sell it etc.

  2. 0
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    All overseas real estate whether or not it’s your residence is treated as an asset. The only residence not counted as an asset is your Australian principal residence.


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