Allyson Bailie from Retirement Essentials encourages Australian seniors to check their eligibility for the Age Pension before getting a reverse mortgage
A reverse mortgage can make a huge difference to the lives of Australian seniors who are struggling to make ends meet.
With the rising cost of living in Australia and limited income opportunities for the elderly, taking out this type of loan can really be an attractive option:
- Access to cash to supplement your income, pay for aged care services, or even buy a car or renovate your home
- Flexible repayment scheme
- No income qualifications
- No need to move out of your home
But despite its popularity, a reverse mortgage is unavailable to some seniors due to age or location restrictions, or is unsuitable because of concerns they may have about:
- Higher interest rates compared to traditional mortgages
- Interest may compound over time if you choose a no-regular repayment scheme
- Your family will receive lower proceeds from the value of your home
Check Your Age Pension Eligibility First
One of the main reasons seniors apply for a reverse mortgage because they need more income in retirement. Superannuation was only mandated by the Australian government in 1993, so the current generation of retirees often have very limited super funds.
In addition, some seniors don’t get any Age Pension at all.
So as a way to supplement retirement income, they unlock the equity of their home through a reverse mortgage.
But why take out a loan if you’re actually eligible to receive an Age Pension?
There are cases when Centrelink has incorrectly declined pension entitlements such as the story of Chris from Sydney Hills District.
Chris’ application was first declined by Centrelink, but when he asked for help from Retirement Essentials, he was approved and started receiving his pension four weeks later.
Chris says, “I found relief through Retirement Essentials. They helped me streamline the Age Pension application process, and got my Pension approved where Centrelink couldn’t.”
So if you are thinking about getting a reverse mortgage to supplement your income, be sure to check your Age Pension eligibility first.
Even if you are already receiving a part Age Pension, or if one spouse is receiving the pension whilst the other is not, you should check to see if your household qualifies for more.
(NOTE: If a couple is receiving the full age pension there is no opportunity to access more)
Accessing additional Age Pension entitlements may assist in avoiding, or at least delaying, the need for a reverse mortgage.
More Benefits for Retirement Essentials Members
Beyond checking Age Pension eligibility, Retirement Essentials makes it easy for Australian seniors to apply for their Age Pension entitlement once approved.
Our customers also benefit from being better informed of pension rule changes via our informative email updates. This way they avoid surprises of unexpected changes in pension entitlements.
We would love to give you a helping hand. To learn more about Retirement Essentials, visit our website at www.retirementessentials.com.au or call us on 1300 527 727 during office hours.
Allyson is the Head of Member Experience at Retirement Essentials. She has always believed that older Australians deserve better access to support and services.