Secret Centrelink trick to keep your pension when selling your home

Want to sell your family home to downsize or move into aged care without the government slashing your Age Pension? There’s a little-known Centrelink rule that can help you keep more of your hard-earned money.

This clever trick gives you a two-year window to protect the proceeds from your home sale, stopping Centrelink from counting it in their assets test and reducing your pension. Here’s how it works.

The Hidden Rule to Save Your Pension

When you sell your main home, Centrelink won’t immediately count the sale money in their assets test, which decides how much pension you get. You’ve got two years (or three in special cases) to use that cash to buy a new home or pay for a retirement village without it affecting your pension.

For example, sell your home for $900,000 and use $700,000 for a retirement village? Only the leftover $200,000 gets counted in the assets test during that two-year grace period. The $700,000 is assumed to earn a tiny 0.25% interest rate for the income test, adding just $1,750 a year to your assessed income. That deeming rate could change, but for now, it’s a small price to pay to keep your pension intact.

Don’t get caught out

This only works for your primary residence. Sell an investment property or holiday home? Sorry, the proceeds go straight into the assets test, potentially cutting your pension. Plus, if you still own your main home (and up to two hectares of land around it), it’s completely exempt from the assets test when applying for the Age Pension.

Beat the system with these new limits

Centrelink bumped up its income and assets test thresholds on 1 July 2025 to match inflation. Know these numbers to maximise your pension:

Income test

• Singles: Earn up to $218 per fortnight (up from $212) and keep the full pension. Every dollar over that cuts your pension by 50 cents per fortnight, with a cut-off at $2,516.
• Couples: Earn up to $380 per fortnight (up from $372) for the full pension, with a cut-off at $3,844.40.
• A Work Bonus lets you earn $300 per fortnight from a job without it touching your pension. Income includes wages, super, savings, and other financial assets.

Assets test

• Single homeowners: You can have $321,500 in assets (up from $314,000) for the full pension, with a cut-off at $704,500 for a part pension.
• Couple homeowners: You can have $481,500 (up from $470,000), with a cut-off at $1,059,000.
• Single non-homeowners: You can have $579,500 (up from $566,000) for the full pension, with a cut-off at $962,500.
• Couple non-homeowners: You can have $739,500 (up from $722,000), with a cut-off at $1,317,000.

Assets include cars, investments, super, businesses, and properties (but not your main home).

It’s YOUR money

This two-year exemption is your shield against Centrelink taking a big chunk of your pension just because you sold your home. It gives you time to downsize or settle into aged care without handing over your hard-earned savings to the government’s means tests. Use this loophole wisely to keep more money in your pocket.

Always double-check with Centrelink, as rules and rates can change.