The start of a new year is a good time to look at your financial behaviours and habits with a fresh eye. We have a great page on our website to help you do this called, ‘Manage Your Money’. Here you can find tools to help you build your savings without having a big impact on your lifestyle. Check it out at www.servicesaustralia.gov.au/manageyourmoney
Pension Loans Scheme
If you’re an Australian property owner aged 66 or older but don’t feel you have enough income coming in, you may want to consider the Pension Loans Scheme.
The scheme is a reverse equity mortgage where eligible people can get a non-taxable fortnightly loan from us. You and your partner may use this to supplement your retirement income.
You can choose the amount you get each fortnight, up to 150 per cent of the full rate of the Age Pension. If you’re already getting some Age Pension, you can borrow the difference between what you’re getting paid up to 150 per cent of the full rate of payment.
This is a loan, so it has an interest rate that’s currently 4.5 per cent. You don’t have to make any repayments on the interest or capital if you don’t want to, so the loan amount will continue to grow until it is repaid. You can transfer the loan to your new property if there’s enough capital to cover it.
We recommend you get independent advice before applying for payments through the Pension Loans Scheme. You can also speak to a Services Australia Financial Information Service Officer to find out more about the scheme. Simply call us on 132 300 and say ‘Financial Information Service’ when asked why you’re calling.
Debt repayments won’t restart until February 2021
Last year, we paused debt repayments because of Covid and the pressure it put on budgets.
We’ve since started writing to people who were overpaid during this time to let them know so they can factor repayments into their future financial planning.
If you’ve been overpaid, you don’t need to pay anything back until February 2021. There are tailored options for individual circumstances, including if you’d like to repay earlier.
I’m looking forward to a positive 2021 and continuing to provide support to those who need it.
Until next time.
If you have a question of a general nature for Services Australia general manager Hank Jongen, simply email email@example.com with Hank in the subject line.