The Department of Health has backtracked on its decision to include money borrowed under the PLS in the assets test for both aged care and the Age Pension – which would likely have increased the costs of care for those using the Scheme.
The PLS allows you to borrow against the equity in your home – by up to $17,800 a year – without affecting your eligibility for the Pension and other benefits – essentially a Government-backed reverse mortgage.
As we covered here, the Government announced in the May Budget that it would expand the Scheme – currently only available to part-pensioners – to full pensioners and self-funded retirees who own their own home from 1 July 2019.
The money is paid as a fortnightly payment and can be used to help fund your own care at home or pay for a spouse to go into aged care.
Interest on the loan is charged each fortnight at 5.25 per cent per year, and it only needs to be repaid when the house is sold or the homeowner passes away – so the rest of your life.
With home care waiting lists forcing many older Australians to foot the bill for their own care while they wait for an approved package, it’s welcome news for those who want to stay at home longer without borrowing from the bank.
You can find out more about the PLS here.
Discussion1 Comment
The ,maximum is $17,800 for a couple and $11788 for a single.
But the likelihood is not many will be able to access these maximums as there is capping calculations, similar to reverse mortgages which are restricted by both lender policies and ASIC regulations