Moving into a retirement village can change how your assets are assessed for the Age Pension. Depending on how much you pay to enter the village, Services Australia may treat you as either a homeowner or non-homeowner.
This can affect whether your retirement village entry contribution is counted as an asset, which Assets test limits apply to you and whether you may qualify for Rent Assistance.
How does living in a retirement village affect the Age Pension?
Everyone who applies for the Age Pension must meet the relevant eligibility requirements, including the Income test and Assets test.
For retirement village residents, an important question under the Assets test is whether Services Australia treats you as a homeowner or non-homeowner. This is not determined simply by whether you legally own your retirement village unit.
Instead, Services Australia generally compares the amount you pay to enter the retirement village, known as your entry contribution, with an amount called the extra allowable amount. From 1 July 2026, the extra allowable amount is $267,000.
| Entry contribution above the extra allowable amount | Entry contribution equal to or below the extra allowable amount | |
|---|---|---|
| Age Pension status | Generally treated as a homeowner | Generally treated as a non-homeowner |
| Entry contribution | Generally not counted under the Assets test | Generally counted as an asset |
| Assets test limits | Homeowner limits | Higher non-homeowner limits |
| Rent Assistance | Generally not available | May be available for eligible ongoing fees |
What is the entry contribution?
Your entry contribution is generally the amount you are required to pay to secure the right to live in the retirement village.
The terminology used in retirement village contracts varies. Depending on the arrangement, the amount may be described as an entry fee, purchase price, loan, lease payment or another type of payment. Services Australia looks at the nature of the payment rather than simply what it is called.
Ongoing retirement village fees and charges are generally separate from the entry contribution.
What is the extra allowable amount?
The extra allowable amount is the difference between the Assets test limit for a homeowner and the higher limit for a non-homeowner at the time you enter the retirement village. From 1 July 2026, that difference is $267,000, for singles and couples alike.
Services Australia compares your entry contribution with this amount to determine how your retirement village accommodation is treated under the Assets test.
Because Age Pension asset limits are indexed each 1 July, the extra allowable amount can change over time. The amount that applies when you enter the retirement village is therefore important.
When am I treated as a homeowner?
If your entry contribution is more than the extra allowable amount, you are generally treated as a homeowner for Age Pension purposes.
In this situation:
- your entry contribution is generally not counted as an asset
- the lower homeowner Assets test limits apply to your other assessable assets
- you generally cannot receive Rent Assistance for your retirement village fees.
This treatment can apply even if you do not legally own the retirement village unit. Retirement village accommodation can be held under a range of arrangements, including leases, licences and other occupancy rights.
When am I treated as a non-homeowner?
If your entry contribution is equal to or less than the extra allowable amount, you are generally treated as a non-homeowner for Age Pension purposes.
In this situation:
- your entry contribution is generally counted as an asset
- the higher non-homeowner Assets test limits apply to your assessable assets
- you may qualify for Rent Assistance if you pay sufficient eligible ongoing retirement village fees.
Being classified as a non-homeowner does not necessarily mean you will receive more Age Pension. Services Australia will assess all your income and assets under the relevant means tests to determine your entitlement.
Can I get Rent Assistance in a retirement village?
You may be eligible for Rent Assistance if Services Australia treats you as a non-homeowner and you pay eligible ongoing fees to live in the retirement village.
If your entry contribution is more than the extra allowable amount and you are treated as a homeowner, you generally cannot receive Rent Assistance for your retirement village accommodation.
Other Rent Assistance eligibility rules also apply, including minimum rent requirements.
What happens to my previous home?
If you move permanently into a retirement village and keep your previous home, the former home may become an assessable asset for the Age Pension rather than continuing to receive the principal home exemption.
What happens will depend on your circumstances and whether any temporary exemptions or other rules apply. This can be particularly important if you plan to keep, rent out or sell your former home after moving into a retirement village.
What if the value of my retirement village interest falls?
A fall in the amount you expect to receive when you leave the retirement village does not necessarily change whether you are treated as a homeowner or non-homeowner.
Your retirement village status is generally determined by comparing your entry contribution with the extra allowable amount that applied when you entered the village. A later fall in the value of your retirement village interest does not simply turn a homeowner into a non-homeowner.
Examples
Example 1: entry contribution above the extra allowable amount
Margaret, who is single, moves into a retirement village in October 2026 and pays an entry contribution of $450,000. That is more than the extra allowable amount of $267,000.
Services Australia generally treats Margaret as a homeowner. Her $450,000 entry contribution is not counted as an asset, but the homeowner Assets test limits apply to her other assessable assets, so she can have up to $333,000 of other assets and still receive the full pension. She generally cannot receive Rent Assistance for her retirement village fees.
Example 2: entry contribution below the extra allowable amount
John, who is also single, moves into a retirement village in October 2026 and pays an entry contribution of $200,000, which is below the extra allowable amount of $267,000.
Services Australia generally treats John as a non-homeowner. His $200,000 entry contribution is counted as an asset, but he receives the benefit of the higher non-homeowner Assets test limits, so he can have up to $600,000 of assets in total, including his entry contribution, and still receive the full pension. If he pays sufficient eligible ongoing retirement village fees, he may also qualify for Rent Assistance.
Common questions
You can be. For Age Pension purposes, homeowner status is not determined simply by whether you legally own the unit. Services Australia generally compares your retirement village entry contribution with the extra allowable amount. If your entry contribution is more than the extra allowable amount, you are generally treated as a homeowner.
You may be able to if Services Australia treats you as a non-homeowner and you pay sufficient eligible ongoing retirement village fees. If you are treated as a homeowner, you generally cannot receive Rent Assistance for your retirement village accommodation.
A later fall in the amount you expect to receive when you leave the village does not necessarily change your homeowner status. Services Australia generally determines your status by comparing your entry contribution with the extra allowable amount that applied when you entered the retirement village.
Summary
Living in a retirement village does not automatically make you a homeowner or non-homeowner for Age Pension purposes. Services Australia generally compares your entry contribution with the extra allowable amount that applies when you enter the village.
If your entry contribution is above the extra allowable amount, you are generally treated as a homeowner and the entry contribution is not counted as an asset. If it is equal to or below the extra allowable amount, you are generally treated as a non-homeowner and the entry contribution is counted as an asset, but the higher non-homeowner Assets test limits apply and you may qualify for Rent Assistance.
Your Age Pension entitlement is still determined by both the Income test and Assets test, with the test that results in the lower pension determining how much you receive.
The information in this article is general in nature.