Caravan travel across Australia has become one of the most popular ways for retirees to enjoy their freedom. With hundreds of thousands of registered caravans and motorhomes on the road, many older Australians are choosing to spend months or even years exploring the country.
However, if you receive any payment from Services Australia through Centrelink, such as the age pension or related benefits, your decision to travel can change the way your assets and living situation are assessed. In some cases, this can reduce your payment or even cancel it.
Understanding the rules before you set off can help you avoid unpleasant surprises and give you confidence that your finances will support your travel lifestyle.
Why Retired Caravan Travellers Must Think About Centrelink Rules
Retirement is often described as the time when every day can feel like a holiday. The warmer weather, blossoming trees and long summer evenings make it even more tempting to hitch up a caravan and take off for an extended road trip.
While it is easy to think only about route planning, fuel stops and campsite bookings, there is another important factor to consider. Your age pension and other Centrelink payments are based on your income, your assets and where you live. When you sell, rent out, or temporarily leave your home and begin living in a caravan, Centrelink may treat your situation differently.
If you do not understand these rules, you may accidentally move from one category of assessment to another. This can push you over the asset thresholds for a part pension or stop your eligibility for Rent Assistance. The good news is that with some planning, you can travel and still keep your payments in order.
Centrelink And Caravan Travel Summary
Particular |
Details |
|---|---|
Main topic |
How caravan travel and long trips affect Centrelink payments for retirees |
Key risk |
Payments can be reduced or cancelled if asset and living details are not updated |
Homeowner travelling more than one year |
Caravan may become principal home and former home becomes an assessable asset |
Homeowner travelling less than one year |
Principal home usually remains exempt and caravan is treated as an asset |
Renters travelling in a caravan |
Often assessed as non homeowners with higher asset thresholds and possible Rent Assistance |
Important action |
Update your details with Centrelink when your living arrangements or assets change |
Free help available |
Financial Information Service and travel related webinars |
Official information site |
Homeowners Travelling In A Caravan For More Than One Year
If you are a homeowner and you decide to travel around Australia in your caravan for more than twelve months, Centrelink will still treat you as a homeowner. However, the big change is how they view your principal home.
In this situation:
- Your caravan is treated as your principal home.
- The caravan is then an exempt asset for the assets test.
- You may be able to claim Rent Assistance for the site fees you pay at caravan parks or long stay parks.
At the same time, the home you have left behind ceases to be your principal residence. It becomes an assessable asset. This is very important, because many retirees bought their homes years before the year 2000, often at a much lower price. Even if you paid a modest amount, the current market value is what matters now.
Centrelink will look at the present value of your former home and include it as part of your assets. If this pushes you over the cut off point for a part pension, your payment may be reduced or cancelled. If this happens, you must update your details with Centrelink and may have to reapply when you return home and move back into the property.
Temporary Exemptions In Special Circumstances
There are some situations where a temporary exemption can apply. For example:
- Your principal home has been damaged or destroyed in a natural disaster.
- The damage was not done wilfully.
- You are actively working to rebuild, repair, sell or relocate.
In these cases, Centrelink may allow a temporary vacation exemption for up to twenty four months. During this period, the normal rules about your principal home and assets can be relaxed, but you must check the exact conditions with Services Australia.
Homeowners Travelling For Less Than One Year
If you plan to travel for less than twelve months and you are a homeowner, the rules are different and usually more favourable.
In most cases:
- Your principal home remains exempt from the assets test.
- You are still treated as a homeowner.
- The value of your home is not assessed while you travel.
- Your caravan is treated as an assessable asset.
In this shorter travel scenario, you cannot claim Rent Assistance for the caravan site fees you pay, because your principal home is already exempt.
This means a homeowner who plans a trip of nine or ten months is often in a different position from someone who plans to travel for several years. If you are considering whether to be away for less than one year or more, it is worth looking at the asset thresholds and seeing how each option may affect your pension.
Asset Limits For A Part Pension
Centrelink uses asset thresholds to decide whether you receive a full pension, a part pension, or no pension at all. The limits are different for homeowners and non homeowners, and they also depend on whether you are single or part of a couple.
Below is an example of asset limits for a part pension:
Your situation |
Homeowner limit |
Non homeowner limit |
|---|---|---|
Single |
$714,500 |
$972,500 |
Couple, combined |
$1,074,000 |
$1,332,000 |
Couple separated due to illness, combined |
$1,267,500 |
$1,525,500 |
Couple, one partner eligible, combined |
$1,074,000 |
$1,332,000 |
Part pensions are cancelled when your assets go over the cut off point for your situation. For couples, the limits apply to the total of both partners combined, not to each person separately.
Rules For Renters Who Take Up Caravan Travel
The picture changes again if you were renting before you started travelling.
If you rent:
- You are usually assessed as a non homeowner.
- You have access to the higher non homeowner asset thresholds.
- Your caravan is treated as an assessable asset.
- You may still be able to receive Rent Assistance.
When you start your caravan journey, Centrelink will ask about your intentions and circumstances, including:
- Are you keeping your rental accommodation while you travel
- How long you expect to be away
- Whether you plan to return to the same address
It is important to remember that Rent Assistance can only be paid for one address. Depending on your answers, Centrelink may treat your caravan as your principal home. In that case:
- The caravan is no longer counted as an asset.
- You are assessed using the lower homeowner asset limits.
- You may be able to claim Rent Assistance for caravan site fees instead of your old rental address.
Every situation is slightly different, so you should explain your plans clearly when you talk to Services Australia.
Free Financial Guidance And Travel Webinars For Seniors
If you are planning an extended caravan trip or even thinking about an overseas holiday after retirement, different rules apply. Services Australia regularly runs webinars that explain:
- How travel can affect your income and asset assessments.
- Rules for Rent Assistance while travelling in Australia.
- What happens to your payments if you go overseas.
- How to use online services to update your details.
Webinars are usually recorded and uploaded to the website, so you can watch them at a time that suits you.
Services Australia also provides the Financial Information Service, often called FIS. This service offers free and independent information to help you make better financial decisions. You can call the Financial Information Service by dialling 132 300 and saying the words Financial Information Service when asked why you are calling.
Frequently Asked Questions
1. Can my Centrelink age pension stop if I travel around Australia in a caravan?
Yes, it can. If your travel changes the way your home and caravan are assessed as assets and you move over the asset limit for a part pension, your payment can be reduced or cancelled. This is more likely if you are away for more than one year and your former home becomes an assessable asset.
2. What happens to my principal home if I am away for more than twelve months?
If you are a homeowner and travel in a caravan for over a year, your caravan is likely to be treated as your principal home. The caravan can then be an exempt asset, but your former home is counted as an asset at its current market value.
3. Can I get Rent Assistance while living in a caravan?
You may be able to claim Rent Assistance for caravan site fees if the caravan is treated as your principal home. This typically happens for homeowners who are away for more than one year, or for renters whose caravan becomes their main place of residence. Rent Assistance can only apply to one address at any time.
4. Do renters have different rules from homeowners when they travel?
Yes. Renters are usually assessed as non homeowners and have higher asset thresholds. Their caravan is counted as an asset. Centrelink will look at whether the renter keeps their original rental property, how long they intend to travel and whether they plan to return when deciding if the caravan becomes the principal home.
5. Where can I get official and detailed information about caravan travel and Centrelink payments?
You can find official information and updates on the Services Australia website at
https://www.servicesaustralia.gov.au
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