The conversations of life

How do the changes to the Pensions Loan Scheme (PLS) affect you?


If you’ve never heard of it, the PLS is essentially a voluntary government-funded ‘reverse mortgage’ that offers older Australians an income stream to support their retirement income (you can check if you’re eligible here).

But last year, the Government announced changes to the PLS that will come into effect on 1 July 2019.

The new arrangements will allow most home-owning pensioners to access an amount up to 50 per cent above the full pension – $425 a fortnight for a full single pensioner, and even more for a couple.

Under the current rules, to access the PLS you must quality for an eligible pension and also have a payment rate above $0 for either the income or assets test. But from 1 July 2019, while you still need to qualify for an eligible pension, you can have a payment rate of $0 for either test and still access the scheme.

The eligible pensions are: the Age Pension, Bereavement Allowance, Carer Payment, Disability Support Pension, Widow B Pension and the Wife Pension.

We think the changes are a very positive step. It means more older Australians will be able to access the scheme, and those already using it could get up to 1.5 times the maximum rate of pension every fortnight.

And with more than 128,000 Australians waiting to receive a home care package, the timing is right.

The additional income from the new PLS arrangements could potentially be used to financially support the care of senior Australians who otherwise have little available cash resources or income above the base pension.

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