Retirement village residents are claiming they should no longer be considered as “homeowners” by Centrelink because it now drastically reduces their pensions, according to The Australian.

From January 1, if a person pays more than $200,000 to move into a retirement village, they are categorised as a “homeowner” by Centrelink. Homeowners have a $250,000 asset threshold compared to $450,000 for “non-homeowners” before their full or part pension payments cut out.

This is because retirement village residents are seen to have the security of a family home – despite most not actually owning their village homes.

The Association of Residents of Queensland Retirement Villages (ARQRV) has called on the Prime Minister to reverse the changes, citing the case of one of its members whose pension will be cut from $456 to just $38 a fortnight.

The January 1 changes have seen part pensions drop from $3 to $1.50 a fortnight for every $1,000 over the assets threshold.

Part pension payments also now cut out for single homeowners once they have over $542,500 in assets. That’s compared to the previous cut-off of $793,750.

For single non-homeowners, the cut-off is now $742,500.

Image credit: Club Super.