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Friday, 28 November 1986
Page: 4088

(Question No. 4983)

Mr Maher asked the Minister for Social Security, upon notice, on 28 November 1986:

Does a Selstay scheme, under which an aged person sells his or her home for less than its full value and then leases back the property rent-free for life, disadvantage an applicant for a pension when the assets of the person are being assessed.

Mr Howe —The answer to the honourable member's question is as follows:

It is understood that there are various Selstay sale plans. These involve the arranged sale of the home at an agreed value to a private individual. The vendor receives a proportion of the sale price at the time of sale, a right to accommodation in the home for life or such shorter period as he or she wishes and payment of the balance of the sale price when vacant possession occurs. Rent is payable to the landlord throughout the period of residence.

On the information available, the scheme appears to involve selling the home, an asset which is exempt for pension purposes, for a consideration which includes the right to continue to occupy it for life. The security of tenure inherent in that right means that the pensioner would continue to qualify under the assets test as a home owner and accordingly the value of the right to occupy the home would be disregarded. Regard would be had to the deposit received if retained in the form of an assessable asset and a value would be placed on the outstanding debt.