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James Coyle
James has over 35 years experience in financial services with particular expertise in two of the key components of retirement finance - Superannuation and the Age Pension. He is passionate about providing the guidance and support that can help older Australians enjoy their best possible retirement. He lives in regional Victoria surrounded by dogs and chooks.
Definitely the interest rate is too high. It should be the same as the Bank Home loan rate 2.5%.
Question: Is an amount owed to the PLS deducted from the value of other assets assessed under the income/assets test for pensions calculations? For example, if a pensioner owns a block of land or a share portfolio say worth $100k, and owed $75k under PLS, would the value of assets assessed be $100k or $25k? $25k would seem to be fair.
Hi Graeme, thanks for requesting further clarity on how Centrelink assess asset values when a PLS is involved. The simple answer is no, just like any other debt that you may have it will only offset the value of the asset the debt is secured against. There is no offsetting the value of other assets which are unencumbered.
There are a couple of finer points that may come into play depending on your specific circumstances so if you (or anyone else reading this with similar queries) would like to discuss the PLS in more detail we do offer 30min consultations at a cost of $75. We can clarify how Centrelink will assess you specifically and help guide you on any related matters that might impact your Age Pension. If you wish to proceed please CLICK HERE to book the best suitable time available.
I find the interest rate a negative factor
The interest rates is a negative factor. there should be a lower fixed interest rate on the same level as the reserve bank.
It wouldnt be the same as the Reserve Bank, given the administration plus cost of capital funding needs to be serviced… but something like the commercial banks at say 2.5% i would think still very low
The 4.5% interest rate is too high and is barrier to me applying for the loan
Would be useful to get an independent comparison of PLS vs reverse mortgage
As an economist, I regard this scheme as excellent policy.
It provides an opportunity for older people like me ( I’m 78 ) to capitalise on their considerable home equity with assurances about the way the scheme is structured to provide fairness and certainty.
Can you please comment on the PHS if it was applied for in 1999? Is it still a loan or we were led to believe it was a lump sum.
Interest rate is definitely a barrier, and should be reduced at say 1% below commercial rates
The Interest is definitely a major factor, I guess it depends greatly on the need
appalling that the government will profit from the elderly . 4.5 % ? beside will the loan be insured ?
The concept of accessing equity in your home (especially as many older people were late to the compulsory Superannuation scheme) is a sensible idea – particularly as many are relatively asset rich and cash poor.
However, for anyone considering this option, they should definitely compare the PLS with offerings from reverse-mortgage providers. On the brief research I’ve done, a reverse mortgage offers a lot of advantages (larger amounts, more flexibility, etc) although in both cases the interest rates are a bit high.
Why should you pay such a high interest rate to access your own money? It is your own home that you have worked so hard to pay off. You are saving the government money by not needing to rely on it for that income. Other than administrative charges and perhaps a percentage cap you should be able to access your own hard earned equity.
Can you access the PLS if you have retired but still have a mortgage?
Hi Sam, yes you can still apply for the PLS if you still have a mortgage. The existing mortgage will be taken into account as part of your assessment but does not make you ineligible.
The RBA cash rate is 0.10% and even with the rate drop to 3.90% today according to “Slo-mo”; this is a “rip-off”.
I agree with most people. The interest rate is far too high. We paid taxes all our lives and now the Gov wants to benefit from our hard work.
What are the factors which justify the assessment and qualification of the setting and maintenance of an high interest rate, which is in comparison is substantially above a reducing home loan rate of an average of 2.5%?
Who do we as a group approach to have this rate lowered?
Begs the question:: where does the money from interest charged actually go? After all administrative, staffing and other costs are paid for by taxpayers!
Interest rates are a factor. Question: what happens if I need to access nursing home care in the next 12 months, or in the future?
Same Question as Christine, where do I stand in terms of aged care/nursing home care should I need this down the track?
Hi Mark. Basically if you sell your home, or the property that the loan is secured against, you need to repay the loan first before any of the proceeds of the sale can be used to fund your age care costs. The scheme has now been renamed as the Home Equity Access Scheme. You can read more about it here.