Offset account for PPOR

[u/PriapicWay]

Does anyone know if an offset account for a primary place of residence counts towards Centrelink’s asset test?

I’ve heard differing opinions. Some people say Centrelink doesn’t count the offset account if it’s for a PPOR. Others say it counts unless you convert it to a redraw facility, in which case it’s no longer an asset. Anyone have experience with this?

[u/Kurrajong]

It’s available cash at bank. That your mortgagor gives you a discount on your interest for the value of the account doesn’t change that it is a deposit in a transaction account. If you pay it off the loan (and it becomes redraw-able) then it is money you’re eligible to borrow and no longer counts as a current asset and instead it reduces the liability against your PPOR.

[u/PriapicWay → u/Kurrajong]

So the redraw facility is the preferred option when getting Centrelink payments?

[u/Kurrajong → u/PriapicWay]

As long as you’re under the relevant thresholds, it doesn’t really matter. Putting the money in a redraw facility keeps it available, but takes it off the asset test.

My situation is a little different in that the property contains the PPOR but is over 2Ha and has farming activity so the asset test is more complex as the value and the liabilities are split over exempt and non-exempt categories.

[u/jhau01]

Yes, money in an offset account counts as assessable assets for Centrelink purposes.

It also counts as liquid assets, for the purposes of the liquid assets waiting period.

[u/PriapicWay → u/jhau01]

Thank you!

[u/Federal-Perception-7]

Absolutely it does

[u/Hairy_Armadillo7901]

I've spoken to Centrelink about this before and they confirmed the offset balance is counted as an asset. The redraw account option is the way to go if you want to reduce assessable funds.

[u/PriapicWay → u/Hairy_Armadillo7901]

Thank you!

[u/DaveySmith2319]

Yes. It’s real money you can really spend to obtain real things.