Australian seniors with full age pension entitlements can now access the government-funded Pension Loans Scheme at a max of $17,800 annually as part of the key changes introduced in the 2018 Federal Budget.
The Australian Government has been offering the Pension Loans Scheme through the Centrelink as a voluntary reverse equity mortgage for older Australians who need to supplement their retirement income.
It is important to take note that the changes in the PLS will start on 1 July 2019, if legislation passes.
In the private sector, we see this government program as a validation of our efforts to promote reverse mortgage as a way for seniors Australians to live a better retirement. The recent expansion further attests to the benefits of tapping home equity to fund needs during retirement age.
If you are still not aware, a reverse mortgage will allow you to access the wealth of your home without the need to sell it. Basically, the loan proceeds can be used to improve the standard of living when you stop working.
Relying on Age Pension may not be enough to live a comfortable retirement. Many pensioners don’t have the ready cash for their everyday expenses, but they are living in homes that are valued at hundreds of thousands. Instead of selling it, you can instead convert a percentage of the property to cash that you can use for various needs such as aged care, home renovation, debt consolidation, and even buying a car.
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The Pension Loans Scheme is quite similar to the reverse mortgage offered by Seniors First because it also uses the home equity in providing a loan for seniors.
With the current expansion, Australian seniors, including self-funded retirees and full-rate pensioners can access the loan up to $17,800 for couples without affecting their age pension entitlements. The loan should be repaid if the pensioner decides to sell the property, move into an aged care facility, or passes away.
Aside from the expansion of the Pension Loans Scheme, Australian seniors may now avail of the additional 14,000 home care packages, and the improved Pension Work Bonus.
These recent changes are commendable because they could help age pensioners improve their lives. As one of the leading providers of reverse mortgages, Seniors First is dedicated to helping Australian seniors enjoy financial freedom in retirement.
If you want to know more about reverse mortgage, you can call Seniors First on 1300 745 745 or visit www.seniorsfirst.com.au