Retirees will have access to Government reverse mortgage

THE Australian Government’s Pensioner Loan Scheme ( PLS) allows people of pension age to obtain an income stream that won’t affect their pension rights, through a reverse mortgage over their home.

The payments received are borrowed from the Government under a reverse mortgage secured against a property owned by the borrower ( or owned by an entity controlled by the borrower).

The loan balance and accrued interest must be repaid on sale of the property, or on the death of the borrower.

If the borrower’s spouse continues to live in is the principal at Conrad Law in Townsville, specialising in business and succession law the property, repayment can be deferred until after the spouse dies.

The recent Federal Budget announced that the PLS will be available to all Australians of retirement age, from July 1, 2019.

They can receive an income stream ( including any pension) up to 150 per cent of the full pension. Until then, the PLS is only available to self- funded or part pensioners, up to the amount of the full pension.

PLS payments do not affect Centrelink benefits such as the Aged Pension and have several other advantages over most financial institution reverse mortgages.

The interest rate charged is also likely to be lower. One significant disadvantage is that the loan cannot be taken as a lump sum.

Many PLS recipients will be happy to spend some more of their children’s inheritance.