Keeping an Australian home after moving overseas: what happens to the Age Pension

A principal home stops being exempt from the Age Pension assets test when its owner states they definitely do not intend to return¹. It also stops being exempt when a temporary absence for a reason other than care or a lost or damaged home lasts more than 12 months, according to the Department of Social Services (DSS) Social Security Guide. In either case, the home is an assessable asset and the higher non-homeowner limits apply.

Unless the owner states they definitely do not intend to return, an absence is treated as temporary, and the owner remains a homeowner¹.

Services Australia defines the principal home as the home a person lives in together with the first 2 hectares of land it sits on, on a single title². Other real estate a person owns counts in the assets test, such as property that is rented out, left vacant for any length of time or lent to someone to live in for free.

A home whose owner does not intend to return is an assessable asset, according to the DSS Social Security Guide¹. The 12-month exemption applies only to a temporary absence, so it does not cover a pensioner who has moved overseas permanently. Residential property is assessable even when neither the owner nor their partner lives in it⁵.

Services Australia assesses real estate at its current market value, less any amount owed on the property². It revalues assessable residential property each year to reflect local market conditions, using indexed market data by postcode from a third-party valuation service.

The owner is also assessed as a non-homeowner¹. From 20 September 2026, the non-homeowner limits are $267,000 higher than the homeowner limits for singles and couples alike⁶. The higher limit makes up for only the first $267,000 of the home's value after any loan, so value above that counts against the pension.

A pensioner who leaves Australia to live in another country is paid an overseas rate from the date of leaving, and the Energy Supplement and Pension Supplement also stop from that date⁷. The maximum basic rate payable outside Australia is $29,520.40 a year for a single pensioner from 20 September 2026, equal to $1,135.40 a fortnight⁸. The rate can be lower if the pensioner has fewer than 35 years of Australian residence between age 16 and Age Pension age⁷.

Net rent from a home its owner has moved out of counts as income under the Age Pension income test, according to Services Australia². For a single pensioner, each dollar of income above $226 a fortnight reduces the pension by 50 cents¹¹.

The 12-month exemption applies only to the assets test¹. Rent received while the home is still exempt from the assets test is still counted as income². Rent from a former home is exempt from the income test only for some people who entered aged care before 1 January 2017 and pay certain accommodation charges¹².

Income from real estate is the rent received after allowable deductions, such as agent's fees, repairs, and land and water rates¹². Capital depreciation, special building write-offs, construction costs and borrowing costs may be deductible for tax purposes but are not deducted under the Age Pension income test. A net loss on a property counts as nil income, and a loss on one property cannot be offset against income from another.

Interest on a loan taken out to buy a new home to live in, while the original home is rented out, is not an allowable deduction¹². Where no tax return or notice of assessment is available, deductions are estimated at one third of gross rent plus any mortgage interest.

A couple has a combined income free area of $396 a fortnight, and each partner's pension is reduced by 25 cents for each dollar of combined income above it¹¹. A single pensioner paid in Australia stops receiving the payment once income reaches $2,701.40 a fortnight.

Overseas payments, such as foreign government or private pensions, are assessed as income at their gross amount alongside any rent¹³.

The home exemption can be extended when a pensioner is temporarily overseas and cannot return because of circumstances beyond their control¹. The Department of Social Services may allow a longer exemption period in these cases.

In the DSS guide's example, a person visiting family overseas could not return when a pandemic closed borders and flights were cancelled¹.

The guide does not set a fixed length for the extension¹. It applies only to a temporary absence and does not cover an owner who has stated that they do not intend to return.

The pension rate itself may also continue without being reduced or stopped where a pensioner cannot return to Australia because of unforeseen circumstances, such as a serious illness, a public health crisis or a natural disaster, according to Services Australia⁷. A Pensioner Concession Card still cancels after six weeks of temporary absence overseas.

Absences for care, or because the home was lost or damaged, have their own exemption periods of up to 24 months¹.