When it comes to renting a property, there are several types of agreements that you may encounter. One of these is a life tenancy agreement. In this article, we`ll take a closer look at what a life tenancy agreement is and how it can affect your Centrelink benefits.

What Is a Life Tenancy Agreement?

A life tenancy agreement is a type of rental agreement where the tenant is allowed to reside in a property for the rest of their life. This means that the tenant has the right to live in the property until they die, at which point the property reverts back to the landlord or their estate.

Life tenancy agreements are generally used for elderly tenants, who may have limited mobility or health issues. They provide the tenant with security of tenure, knowing that they will have a permanent home for the rest of their life.

How Does a Life Tenancy Agreement Affect Centrelink Benefits?

If you are receiving Centrelink benefits and are considering entering into a life tenancy agreement, it`s important to understand how this type of rental agreement can affect your benefits.

Under Centrelink rules, a life tenancy agreement is considered to be a type of asset. This means that the value of the agreement is taken into account when assessing your eligibility for benefits.

For example, if the life tenancy agreement has a value of $100,000, this amount will be included in your assets test. This could reduce the amount of Centrelink benefits you are eligible to receive, as your assets are taken into consideration when assessing your eligibility for benefits such as the Age Pension.

However, it`s important to note that there are some exemptions to this rule. If the life tenancy agreement is with a close family member, such as a parent or child, it may not be included in your assets test. Similarly, if the life tenancy agreement is with a non-profit organisation, it may also be exempt from the assets test.

It`s also worth noting that the value of the life tenancy agreement may be discounted when assessing your assets, depending on your individual circumstances. For example, if you are over a certain age or have a disability, the value of the agreement may be discounted when calculating your Centrelink benefits.

In summary, if you are considering entering into a life tenancy agreement, it`s important to understand how it may affect your Centrelink benefits. Speak to a financial advisor or Centrelink representative to get a better understanding of your individual circumstances and how a life tenancy agreement may impact your benefits.