How disaster impacts retirees' finances and pensions
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Australian retirees have long been told their home is their castle. But what happens when that castle is reduced to ashes by a bushfire, submerged by a flood, or blown apart by a cyclone?
For Australians in their 60s and beyond, losing a home to a natural disaster isn’t just an emotional and financial shock – it can also turn into a bureaucratic battle with the Age Pension system. In an era of unprecedented fires, floods and storms, older Australians are finding out the hard way how a lost home can affect their Centrelink eligibility and payments.
The question is: Is the system doing enough to help, or is it adding insult to injury?
For Grey Nomads and retirees settled into their dream homes, natural disasters can turn golden years into a nightmare. Bushfires can sweep through rural retirement havens, floods can inundate long-held family homes, and cyclones and storms can tear off roofs and walls in an instant. In recent years, we’ve seen it all: from the tragic Black Summer fires of 2019–20 to the record-breaking floods in NSW and Queensland in 2022.
Older Australians have been front and centre in these disasters. Some have firefighting experience or community ties that keep them in vulnerable areas; others simply don’t have the means to move elsewhere. And when disaster strikes, they often face unique challenges in recovery – including the maze of Centrelink rules that kick in when your home is suddenly gone.
For example, as of March 2025, a single homeowner can have up to $314,000 in other assets and still receive a full Age Pension, whereas a non-homeowner can have up to $566,000. The logic is that non-homeowners need a higher allowance because they might be paying rent or have other housing costs. Likewise, the cut-off for even a part pension is higher if you don’t own a home – about $949,000 in assets for a single non-homeowner versus $697,000 for a homeowner. In plain English: homeownership status affects your pension. Owning your home gives you a lower asset threshold (since the home itself is not counted), while not owning one lets you have more assets before your pension is reduced or cut off.
But here’s the catch – what happens if you suddenly go from being a homeowner to having no home at all? That’s not a hypothetical scenario for many. Think of a retiree couple who owned a house that was just destroyed by a bushfire. One day they’re “homeowners” (with an exempt asset), and the next, the house is a charred ruin. Do they become “non-homeowners” overnight in Centrelink’s eyes? And if so, does that help or hurt their pension?
In real terms, let’s say your house burns down and the insurer cuts you a check for $400,000. Normally, having an extra $400k in the bank would blow out your assets and potentially make you ineligible for the pension. But Centrelink says: “Hold on, we won’t count this for now if you’re going to use it to get another home.” They give you up to 12 months breathing room. Better yet, since 2023 the rules have become more generous: for home sales (or insurance payouts) from 1 January 2023 onwards, the asset-test exemption can last up to 24 months, and even up to 36 months in special cases. This change recognizes that rebuilding or finding a new home can take time – especially after disasters, when builders are booked out and construction costs soar.
During this exemption period, you can even continue to be treated as a homeowner for pension purposes. That’s important. It means Centrelink will still use the homeowner asset thresholds for you (the lower ones) and you won’t suddenly get a higher threshold just because you lost the house.
Why would that matter? Mainly because if you were treated as a non-homeowner, you might qualify for Rent Assistance or a higher asset limit – but the system’s logic is that since you have money set aside to rebuild, you’re effectively a “temporary homeowner in transition.” It’s a bit of a trade-off. In any case, for the time being, your Age Pension payments can continue as normal while you sort out your living situation. The goal here is to prevent a double whammy – losing your home and your pension in one fell swoop.
If rebuilding is delayed for reasons outside your control – quite common after widespread disasters – Centrelink can grant an extension beyond 12 months. Realistically, after events like the 2020 fires or 2022 floods, many older Aussies couldn’t even find a builder or materials for love nor money within a year. The rules acknowledge this: if you can show you’ve been making reasonable attempts to rebuild or purchase a new home but things like council approvals or builder waitlists are holding you up, you may get up to 24 months total without your payout counting against you.
“Reasonable attempts” might include signing a rebuilding contract, putting a deposit on a new home, or at least actively house-hunting. In other words, Centrelink wants to see that you’re not just stashing the cash indefinitely – you’re genuinely working towards housing yourself again.
If instead you decide not to rebuild and choose to sell the property (or whatever remains of it), the rules tweak a bit. Say you got that $400k insurance and you also sell your block of land for another sum. If you declare to Centrelink that you intend to use those funds to buy a new home, they will keep the proceeds exempt for up to 12 (now 24) months as we discussed. However – and here’s a quirky twist – once you make that declaration, Centrelink will start assessing your destroyed home (the property) as an asset, even if you haven’t sold it yet. Why? Because the moment you signal you’re not going back to live on that land, it ceases being your “principal home” in their eyes. It turns into just another asset (like an investment property or vacant land you own).
This means its value could count against your pension. It’s a bit of a technical gotcha: you basically transfer the exempt status from the land to the payout you’re going to use for a new home. Any portion of your insurance payout that you don’t end up using to buy the new home will become a countable financial asset after that period. For example, if you pocket some leftover money or use it for other expenses, that chunk could reduce your pension under the assets test once the dust settles.
And what if you had no insurance? Unfortunately, many pensioners don’t – premiums in disaster-prone areas have skyrocketed, pricing out people on fixed incomes. “If people aren’t insured, they can’t bounce back,” former NSW fire chief Greg Mullins noted bluntly. Gwenda and Keith Duncan, a retiree couple mentioned earlier, couldn’t afford the insurance premiums on their property, so when the bushfire hit, they had to rely on government relief and their pension alone. In such cases there’s no big payout coming, but the pension rules can still shift. With the home gone, they might qualify as non-homeowners which entitles them to some additional support like Rent Assistance (if they pay rent for temporary accommodation).
Rent Assistance isn’t huge – a single pensioner might get at most around $150 extra per fortnight – but it’s something. The irony is, to get that, you must no longer be considered a homeowner. Centrelink generally considers you a homeowner as long as you have a reasonable intention to return to or rebuild your home.
However, if the loss is total and you aren’t rebuilding, at some stage you’d inform Centrelink you’re no longer a homeowner and potentially start receiving the higher asset threshold and rent help. It’s a fine line to tread, and many retirees probably aren’t sure when or how to make that call.
There’s also the Disaster Recovery Allowance (DRA), which is a short-term income replacement for up to 13 weeks, but that’s mainly for working-age folks who lost income (for example, if a disaster disrupted your employment or small business). Retirees on Age Pension typically wouldn’t get DRA, since they aren’t working – though if a retiree was doing a bit of part-time work or running a small business on the side, they might qualify.
Interestingly, Centrelink also has something called a Crisis Payment for Extreme Circumstances – essentially a small one-off payment (usually equal to a week’s pension) if you’re forced to leave your home due to extreme events like fire, flood, or domestic violence. To get it, you must be eligible for an income support payment (Age Pension counts), be in severe financial hardship, and claim within 7 days of deciding you can’t return home. It’s meant for those really dire situations where, say, your house just burned down and you’ve got nothing but the clothes on your back.
However, there’s a catch: you can’t get the Crisis Payment if you’ve already received a disaster recovery payment for the same event. The systems don’t let you double-dip, even though $1,000 in disaster recovery and a one-week pension payment are pretty meager sums when you’ve literally lost everything.
Many older disaster victims have commented that these grants are welcome but hardly sufficient. After the 2019-20 fires, some families (not on Age Pension) reported getting only $1,280 from a state emergency fund and found it “a slap in the face” considering the scale of their losses. For pensioners, a grand or so might cover temporary accommodation for a few weeks, but it won’t put a roof back over your head.
Remember Keith and Gwenda Duncan? They’re a couple in their 70s from the NSW Mid-North Coast. In November 2019, a bushfire tore through their property and wiped out not only their home but also their small business. “It’s all gone. That’s just what he said, ‘it’s all gone’,” Gwenda recounted, describing her husband’s reaction as they surveyed the ruins. The Duncans were left with nothing but the clothes on their backs and their Age Pensions. They hadn’t been insured – the premiums had gotten too expensive for them as pensioners – so there was no big payout coming to fund a rebuild.
In the immediate aftermath, they received some government assistance, but Gwenda told ABC’s The Drum that “it took a long time after the fires before help started to come. Slowly money did come out and we’re using that to build a shed so we have somewhere to live.”.
Imagine that – in your late 60s or 70s, living in a shed on your burnt-out property, trying to rebuild your life literally from the ground up. The Duncans’ story sadly isn’t unique; many older Australians hit by the fires found themselves in similar straits, relying on charity, grants and their pension payments to get by.
From the Black Summer fires to the more recent floods, the anecdotes are equally heart-wrenching. Consider the 2022 Northern Rivers floods in NSW. One extended family in Lismore – four generations of the Ashcroft family – saw four homes across the family destroyed in the deluge. The great-grandmother, 92 years old, had to be rescued and was left without a roof over her head along with her children, grandchildren, and great-grandkids.
The family patriarch, Mark Ashcroft, had just finished renovating his home when it was completely inundated. He moved into a caravan on his property as a temporary fix, but then the second flood hit and even that caravan was swept away. You can imagine the turmoil and the impact on their finances.
Mark, a grandfather, described the situation as “just really depressing” as he stood in mud where his home used to be. His elderly mother – the 92-year-old – broke down in tears on seeing the house she raised her family in flooded to the gutters. “She’s just devastated but so are a lot of other people – we aren’t the only ones,” Mark said, capturing both the personal grief and the shared trauma of the community.
For those older residents, the path to recovery is steep. Some had home insurance; many did not or found out they were under-insured. Even those with insurance money face the process we outlined: dealing with Centrelink’s time limits on how quickly they must rebuild or buy anew to keep that money from affecting their pension.
After catastrophic floods, many older Australians have been left homeless and living in temporary accommodation like caravans. In Lismore, the Ashcroft family – including a 92-year-old great-grandmother – saw their homes destroyed and had to take refuge in makeshift quarters. Such scenes underscore the long road of recovery retirees face, often with only their Age Pension to fall back on.
Then there are stories that spotlight the bureaucratic battles disaster survivors face. Doug Reidy (not yet a retiree, but in his late 40s) survived the Black Summer fires in East Gippsland, Victoria. The trauma left him with injuries and PTSD so severe he couldn’t work. When he tried to get support from Centrelink (in his case the Disability Support Pension), he was met with maze-like requirements and delays. “That was the fire. The real struggle has been since,” Reidy said. “The red tape. All the bullshit you’ve got to try and go through.”.
While Doug was seeking a different pension, that sentiment could be echoed by many older Australians dealing with Centrelink after a disaster. Imagine losing your home – you’re in shock, maybe living in a friend’s spare room or a caravan, your paperwork is all gone, you’re emotionally and physically exhausted – and now you have to navigate forms, asset assessments, and phone queues to ensure your pension keeps coming or to claim a one-off relief payment. It can truly feel like a second disaster of paperwork, at a time when you’re least equipped to handle it.
For instance, the extension of the home sale/payout exemption to 24 months (and a kinder deeming rate on those funds for income test purposes) from 2023 was a welcome change. It directly responded to issues folks encountered after events like the Black Summer fires – where one year simply wasn’t enough to rebuild or find a new home, especially amid nationwide shortages of housing and trades. Advocates had been pushing for this change.
In fact, Economic Justice Australia (EJA), a national welfare rights network, noted an “anomaly” in the old policy: insurance payouts could technically be exempt indefinitely if you still intended to use them for repairs, yet the principal home itself could lose exemption after 12 months – a confusing discrepancy. EJA also reported that many disaster-affected pensioners simply “are not aware of these time limits” on home sale or rebuild exemptions, and could struggle to prove they’ve made “reasonable attempts” to rebuild in time.
“Everyone knew there were no builders and no houses for sale. It was all anyone talked about,” one community worker told EJA, highlighting how unrealistic a strict time limit was in a region wiped out by fires. The lesson here is that even well-meaning policies don’t always translate smoothly on the ground.
So, is the current system adequate? Yes and no. On one hand, we can acknowledge that Australia’s social security framework does try to account for extraordinary events. The fact that your home remains an exempt asset even if you’re not living in it – as long as you haven’t given up on returning – is a compassionate element.
Centrelink doesn’t immediately penalize you for having your house burn down; it effectively says, “we’ll pretend that home (or the intention of a home) is still there for a while.” There are safety nets like disaster payments and crisis payments, albeit modest. And the Age Pension itself, as a guaranteed income, is in a way a lifeline when all else is lost.
It means even if everything else is gone, you still have that fortnightly deposit to buy food, fuel, maybe pay for a motel or a caravan site.
On the other hand, there are gaps that leave many feeling the system isn’t doing enough. The financial support on offer after disasters often falls short of what’s needed for a real recovery. Rebuilding a home can cost hundreds of thousands; even buying a basic relocatable home or long-term renting strains the budget of someone on the pension.
If you were a self-funded retiree who lost your home and suddenly had to spend your savings to rebuild, you might burn through assets and then turn to Centrelink for Age Pension – only to find you’re not eligible until your assets drop further. Some have pointed out that the means test could discourage older people from downsizing or cashing out after a disaster because they fear losing pension entitlements on top of everything.
There’s also the mental and administrative burden: Centrelink’s processes can be convoluted, and while there are disaster hotlines and dedicated staff during crises, it’s still daunting for an elderly person to navigate. One misstep – like not understanding you need to inform Centrelink of your plans, or missing the 7-day window for a crisis payment claim – and you can miss out on help.
Moreover, the strictness of criteria can be problematic. For example, you can’t get the federal disaster payment if your area wasn’t officially declared, even if your home was the only one on the street that burned down. Or take the case of one NSW bushfire victim who was initially “knocked back” for the $1000 disaster payment because outdated maps didn’t show his address as part of the affected zone – bureaucratic fine print that added needless stress (that case was later resolved, but it shows the hoops people jump through).
For pensioners, there’s also the transition from being a homeowner to possibly a homeless person or renter. Not everyone knows to ask about Rent Assistance or asset reclassification. And if you do get an insurance payout, the clock starts ticking on using that money – which can feel like pressure when you’re still in shock from the disaster.
Community advocates and some politicians have argued that more could be done. Suggestions include further extending asset exemption periods (as EJA recommends, allow case-by-case longer extensions where needed), increasing the amount of disaster payments for seniors, or even creating a special allowance for older homeowners who lose everything, recognizing that they often don’t have the time or earning capacity to ever recover their losses.
Others say the government should invest more in building public or affordable housing specifically to accommodate seniors displaced by disasters – because not everyone will be able to rebuild on their own.
At the end of the day, older Australians are known for their resilience. We’ve seen retirees battle flames with garden hoses, tow caravans across flooded plains, and hunker down in community evacuation centres with stoic determination. They shouldn’t have to battle the system as well. Losing a home so late in life is hard enough without having to become an expert in Centrelink regulations overnight.
The support is there, but one has to ask: is it reaching people quickly enough and in the right way? Or are our most vulnerable seniors slipping through the cracks at the very moment they need help the most?
As climate change intensifies and disasters become more frequent, this question gains urgency. We owe it to our elders to ensure the safety net actually catches them.
Now, a question for you, dear reader: Do you feel confident that if a disaster took your home, the Age Pension system would have your back? Or is there more we need to do as a society to support older Australians when nature turns their lives upside down?
This information is general in nature and does not constitute financial, legal, or tax advice. It does not consider your personal circumstances, objectives, or needs. You should evaluate your own financial situation and consider seeking advice from a qualified financial adviser before making any financial decisions.
For Australians in their 60s and beyond, losing a home to a natural disaster isn’t just an emotional and financial shock – it can also turn into a bureaucratic battle with the Age Pension system. In an era of unprecedented fires, floods and storms, older Australians are finding out the hard way how a lost home can affect their Centrelink eligibility and payments.
The question is: Is the system doing enough to help, or is it adding insult to injury?
When Disaster Strikes Home in Retirement
A bushfire can destroy in minutes what took a lifetime to build – an unimaginable heartbreak for retirees. Many older Australians, like Keith and Gwenda Duncan of Rainbow Flat NSW, saw their home and belongings go up in flames during the Black Summer bushfires. Losing the roof over your head late in life is devastating on multiple levels. Not only are there memories attached to every brick and beam, but there’s also the practical reality: where will you live, and how will you afford to rebuild or relocate on a fixed income?For Grey Nomads and retirees settled into their dream homes, natural disasters can turn golden years into a nightmare. Bushfires can sweep through rural retirement havens, floods can inundate long-held family homes, and cyclones and storms can tear off roofs and walls in an instant. In recent years, we’ve seen it all: from the tragic Black Summer fires of 2019–20 to the record-breaking floods in NSW and Queensland in 2022.
Older Australians have been front and centre in these disasters. Some have firefighting experience or community ties that keep them in vulnerable areas; others simply don’t have the means to move elsewhere. And when disaster strikes, they often face unique challenges in recovery – including the maze of Centrelink rules that kick in when your home is suddenly gone.
Image source: Seniors Discount Club
The Age Pension, Homeownership and the Asset Test
To understand the issue, let’s recap how the Age Pension treats your home. In Australia, the Age Pension is means-tested – there’s both an income test and an assets test to determine if you’re eligible and how much you get paid. Under the assets test, your principal home (the house you live in) is normally exempt. It doesn’t count toward the assets limit for pension eligibility. This is a crucial point: you can be living in a $5 million home and still get the full pension, because the house itself isn’t counted as an asset in the test. Instead, Centrelink uses different asset thresholds depending on whether you’re a homeowner or a non-homeowner.For example, as of March 2025, a single homeowner can have up to $314,000 in other assets and still receive a full Age Pension, whereas a non-homeowner can have up to $566,000. The logic is that non-homeowners need a higher allowance because they might be paying rent or have other housing costs. Likewise, the cut-off for even a part pension is higher if you don’t own a home – about $949,000 in assets for a single non-homeowner versus $697,000 for a homeowner. In plain English: homeownership status affects your pension. Owning your home gives you a lower asset threshold (since the home itself is not counted), while not owning one lets you have more assets before your pension is reduced or cut off.
But here’s the catch – what happens if you suddenly go from being a homeowner to having no home at all? That’s not a hypothetical scenario for many. Think of a retiree couple who owned a house that was just destroyed by a bushfire. One day they’re “homeowners” (with an exempt asset), and the next, the house is a charred ruin. Do they become “non-homeowners” overnight in Centrelink’s eyes? And if so, does that help or hurt their pension?
When the Roof Is Gone: How Centrelink Treats a Destroyed Home
The government has special rules for people in exactly this predicament. The short answer is: Centrelink doesn’t immediately treat you as a non-homeowner or strip away your pension if your house is destroyed – if you plan to rebuild or relocate. In fact, if you receive an insurance payout for the lost home, Centrelink will generally exempt that money from the Age Pension asset test for up to 12 months, as long as you intend to use it to rebuild your home or buy a new one. This temporary exemption is meant to give you time to get back on your feet without your pension being affected straight away. After all, you’re dealing with enough stress already – the idea is to not add a sudden drop in income to the mix.In real terms, let’s say your house burns down and the insurer cuts you a check for $400,000. Normally, having an extra $400k in the bank would blow out your assets and potentially make you ineligible for the pension. But Centrelink says: “Hold on, we won’t count this for now if you’re going to use it to get another home.” They give you up to 12 months breathing room. Better yet, since 2023 the rules have become more generous: for home sales (or insurance payouts) from 1 January 2023 onwards, the asset-test exemption can last up to 24 months, and even up to 36 months in special cases. This change recognizes that rebuilding or finding a new home can take time – especially after disasters, when builders are booked out and construction costs soar.
During this exemption period, you can even continue to be treated as a homeowner for pension purposes. That’s important. It means Centrelink will still use the homeowner asset thresholds for you (the lower ones) and you won’t suddenly get a higher threshold just because you lost the house.
Why would that matter? Mainly because if you were treated as a non-homeowner, you might qualify for Rent Assistance or a higher asset limit – but the system’s logic is that since you have money set aside to rebuild, you’re effectively a “temporary homeowner in transition.” It’s a bit of a trade-off. In any case, for the time being, your Age Pension payments can continue as normal while you sort out your living situation. The goal here is to prevent a double whammy – losing your home and your pension in one fell swoop.
Navigating Insurance Payouts and Asset Tests
So far, so good – at least on paper. But the devil, as always, is in the detail. Retirees need to declare to Centrelink what they intend to do with any insurance payout or sale proceeds. If you say, “I plan to rebuild on the same site,” then your destroyed property can remain an exempt asset (they’ll still treat the land as your principal home) and the insurance payout stays exempt for that 12-to-24 month window.If rebuilding is delayed for reasons outside your control – quite common after widespread disasters – Centrelink can grant an extension beyond 12 months. Realistically, after events like the 2020 fires or 2022 floods, many older Aussies couldn’t even find a builder or materials for love nor money within a year. The rules acknowledge this: if you can show you’ve been making reasonable attempts to rebuild or purchase a new home but things like council approvals or builder waitlists are holding you up, you may get up to 24 months total without your payout counting against you.
“Reasonable attempts” might include signing a rebuilding contract, putting a deposit on a new home, or at least actively house-hunting. In other words, Centrelink wants to see that you’re not just stashing the cash indefinitely – you’re genuinely working towards housing yourself again.
If instead you decide not to rebuild and choose to sell the property (or whatever remains of it), the rules tweak a bit. Say you got that $400k insurance and you also sell your block of land for another sum. If you declare to Centrelink that you intend to use those funds to buy a new home, they will keep the proceeds exempt for up to 12 (now 24) months as we discussed. However – and here’s a quirky twist – once you make that declaration, Centrelink will start assessing your destroyed home (the property) as an asset, even if you haven’t sold it yet. Why? Because the moment you signal you’re not going back to live on that land, it ceases being your “principal home” in their eyes. It turns into just another asset (like an investment property or vacant land you own).
This means its value could count against your pension. It’s a bit of a technical gotcha: you basically transfer the exempt status from the land to the payout you’re going to use for a new home. Any portion of your insurance payout that you don’t end up using to buy the new home will become a countable financial asset after that period. For example, if you pocket some leftover money or use it for other expenses, that chunk could reduce your pension under the assets test once the dust settles.
And what if you had no insurance? Unfortunately, many pensioners don’t – premiums in disaster-prone areas have skyrocketed, pricing out people on fixed incomes. “If people aren’t insured, they can’t bounce back,” former NSW fire chief Greg Mullins noted bluntly. Gwenda and Keith Duncan, a retiree couple mentioned earlier, couldn’t afford the insurance premiums on their property, so when the bushfire hit, they had to rely on government relief and their pension alone. In such cases there’s no big payout coming, but the pension rules can still shift. With the home gone, they might qualify as non-homeowners which entitles them to some additional support like Rent Assistance (if they pay rent for temporary accommodation).
Rent Assistance isn’t huge – a single pensioner might get at most around $150 extra per fortnight – but it’s something. The irony is, to get that, you must no longer be considered a homeowner. Centrelink generally considers you a homeowner as long as you have a reasonable intention to return to or rebuild your home.
However, if the loss is total and you aren’t rebuilding, at some stage you’d inform Centrelink you’re no longer a homeowner and potentially start receiving the higher asset threshold and rent help. It’s a fine line to tread, and many retirees probably aren’t sure when or how to make that call.
Lifelines: Disaster Payments and Crisis Payments
Besides the ongoing pension issues, there are a couple of immediate relief measures worth mentioning. If you’re caught in a declared natural disaster, you might be eligible for the Australian Government Disaster Recovery Payment (AGDRP) – a one-off payment of $1,000 for adults who’ve been significantly affected (such as if your home was destroyed or badly damaged).There’s also the Disaster Recovery Allowance (DRA), which is a short-term income replacement for up to 13 weeks, but that’s mainly for working-age folks who lost income (for example, if a disaster disrupted your employment or small business). Retirees on Age Pension typically wouldn’t get DRA, since they aren’t working – though if a retiree was doing a bit of part-time work or running a small business on the side, they might qualify.
Interestingly, Centrelink also has something called a Crisis Payment for Extreme Circumstances – essentially a small one-off payment (usually equal to a week’s pension) if you’re forced to leave your home due to extreme events like fire, flood, or domestic violence. To get it, you must be eligible for an income support payment (Age Pension counts), be in severe financial hardship, and claim within 7 days of deciding you can’t return home. It’s meant for those really dire situations where, say, your house just burned down and you’ve got nothing but the clothes on your back.
However, there’s a catch: you can’t get the Crisis Payment if you’ve already received a disaster recovery payment for the same event. The systems don’t let you double-dip, even though $1,000 in disaster recovery and a one-week pension payment are pretty meager sums when you’ve literally lost everything.
Many older disaster victims have commented that these grants are welcome but hardly sufficient. After the 2019-20 fires, some families (not on Age Pension) reported getting only $1,280 from a state emergency fund and found it “a slap in the face” considering the scale of their losses. For pensioners, a grand or so might cover temporary accommodation for a few weeks, but it won’t put a roof back over your head.
Real Stories: “It’s All Gone” – Pensioners on the Frontline
Sometimes the best way to understand these challenges is through the voices of those who lived them.Remember Keith and Gwenda Duncan? They’re a couple in their 70s from the NSW Mid-North Coast. In November 2019, a bushfire tore through their property and wiped out not only their home but also their small business. “It’s all gone. That’s just what he said, ‘it’s all gone’,” Gwenda recounted, describing her husband’s reaction as they surveyed the ruins. The Duncans were left with nothing but the clothes on their backs and their Age Pensions. They hadn’t been insured – the premiums had gotten too expensive for them as pensioners – so there was no big payout coming to fund a rebuild.
In the immediate aftermath, they received some government assistance, but Gwenda told ABC’s The Drum that “it took a long time after the fires before help started to come. Slowly money did come out and we’re using that to build a shed so we have somewhere to live.”.
Imagine that – in your late 60s or 70s, living in a shed on your burnt-out property, trying to rebuild your life literally from the ground up. The Duncans’ story sadly isn’t unique; many older Australians hit by the fires found themselves in similar straits, relying on charity, grants and their pension payments to get by.
From the Black Summer fires to the more recent floods, the anecdotes are equally heart-wrenching. Consider the 2022 Northern Rivers floods in NSW. One extended family in Lismore – four generations of the Ashcroft family – saw four homes across the family destroyed in the deluge. The great-grandmother, 92 years old, had to be rescued and was left without a roof over her head along with her children, grandchildren, and great-grandkids.
The family patriarch, Mark Ashcroft, had just finished renovating his home when it was completely inundated. He moved into a caravan on his property as a temporary fix, but then the second flood hit and even that caravan was swept away. You can imagine the turmoil and the impact on their finances.
Mark, a grandfather, described the situation as “just really depressing” as he stood in mud where his home used to be. His elderly mother – the 92-year-old – broke down in tears on seeing the house she raised her family in flooded to the gutters. “She’s just devastated but so are a lot of other people – we aren’t the only ones,” Mark said, capturing both the personal grief and the shared trauma of the community.
For those older residents, the path to recovery is steep. Some had home insurance; many did not or found out they were under-insured. Even those with insurance money face the process we outlined: dealing with Centrelink’s time limits on how quickly they must rebuild or buy anew to keep that money from affecting their pension.
After catastrophic floods, many older Australians have been left homeless and living in temporary accommodation like caravans. In Lismore, the Ashcroft family – including a 92-year-old great-grandmother – saw their homes destroyed and had to take refuge in makeshift quarters. Such scenes underscore the long road of recovery retirees face, often with only their Age Pension to fall back on.
Then there are stories that spotlight the bureaucratic battles disaster survivors face. Doug Reidy (not yet a retiree, but in his late 40s) survived the Black Summer fires in East Gippsland, Victoria. The trauma left him with injuries and PTSD so severe he couldn’t work. When he tried to get support from Centrelink (in his case the Disability Support Pension), he was met with maze-like requirements and delays. “That was the fire. The real struggle has been since,” Reidy said. “The red tape. All the bullshit you’ve got to try and go through.”.
While Doug was seeking a different pension, that sentiment could be echoed by many older Australians dealing with Centrelink after a disaster. Imagine losing your home – you’re in shock, maybe living in a friend’s spare room or a caravan, your paperwork is all gone, you’re emotionally and physically exhausted – and now you have to navigate forms, asset assessments, and phone queues to ensure your pension keeps coming or to claim a one-off relief payment. It can truly feel like a second disaster of paperwork, at a time when you’re least equipped to handle it.
Image source: Unsplash
Does the System Support Older Aussies in Disaster Recovery?
All these rules and special provisions exist because, in theory, the government recognizes that older Australians need support after disasters. The intentions are good, and some recent improvements show policymakers are aware of gaps.For instance, the extension of the home sale/payout exemption to 24 months (and a kinder deeming rate on those funds for income test purposes) from 2023 was a welcome change. It directly responded to issues folks encountered after events like the Black Summer fires – where one year simply wasn’t enough to rebuild or find a new home, especially amid nationwide shortages of housing and trades. Advocates had been pushing for this change.
In fact, Economic Justice Australia (EJA), a national welfare rights network, noted an “anomaly” in the old policy: insurance payouts could technically be exempt indefinitely if you still intended to use them for repairs, yet the principal home itself could lose exemption after 12 months – a confusing discrepancy. EJA also reported that many disaster-affected pensioners simply “are not aware of these time limits” on home sale or rebuild exemptions, and could struggle to prove they’ve made “reasonable attempts” to rebuild in time.
“Everyone knew there were no builders and no houses for sale. It was all anyone talked about,” one community worker told EJA, highlighting how unrealistic a strict time limit was in a region wiped out by fires. The lesson here is that even well-meaning policies don’t always translate smoothly on the ground.
So, is the current system adequate? Yes and no. On one hand, we can acknowledge that Australia’s social security framework does try to account for extraordinary events. The fact that your home remains an exempt asset even if you’re not living in it – as long as you haven’t given up on returning – is a compassionate element.
Centrelink doesn’t immediately penalize you for having your house burn down; it effectively says, “we’ll pretend that home (or the intention of a home) is still there for a while.” There are safety nets like disaster payments and crisis payments, albeit modest. And the Age Pension itself, as a guaranteed income, is in a way a lifeline when all else is lost.
It means even if everything else is gone, you still have that fortnightly deposit to buy food, fuel, maybe pay for a motel or a caravan site.
On the other hand, there are gaps that leave many feeling the system isn’t doing enough. The financial support on offer after disasters often falls short of what’s needed for a real recovery. Rebuilding a home can cost hundreds of thousands; even buying a basic relocatable home or long-term renting strains the budget of someone on the pension.
If you were a self-funded retiree who lost your home and suddenly had to spend your savings to rebuild, you might burn through assets and then turn to Centrelink for Age Pension – only to find you’re not eligible until your assets drop further. Some have pointed out that the means test could discourage older people from downsizing or cashing out after a disaster because they fear losing pension entitlements on top of everything.
There’s also the mental and administrative burden: Centrelink’s processes can be convoluted, and while there are disaster hotlines and dedicated staff during crises, it’s still daunting for an elderly person to navigate. One misstep – like not understanding you need to inform Centrelink of your plans, or missing the 7-day window for a crisis payment claim – and you can miss out on help.
Moreover, the strictness of criteria can be problematic. For example, you can’t get the federal disaster payment if your area wasn’t officially declared, even if your home was the only one on the street that burned down. Or take the case of one NSW bushfire victim who was initially “knocked back” for the $1000 disaster payment because outdated maps didn’t show his address as part of the affected zone – bureaucratic fine print that added needless stress (that case was later resolved, but it shows the hoops people jump through).
For pensioners, there’s also the transition from being a homeowner to possibly a homeless person or renter. Not everyone knows to ask about Rent Assistance or asset reclassification. And if you do get an insurance payout, the clock starts ticking on using that money – which can feel like pressure when you’re still in shock from the disaster.
Community advocates and some politicians have argued that more could be done. Suggestions include further extending asset exemption periods (as EJA recommends, allow case-by-case longer extensions where needed), increasing the amount of disaster payments for seniors, or even creating a special allowance for older homeowners who lose everything, recognizing that they often don’t have the time or earning capacity to ever recover their losses.
Others say the government should invest more in building public or affordable housing specifically to accommodate seniors displaced by disasters – because not everyone will be able to rebuild on their own.
At the end of the day, older Australians are known for their resilience. We’ve seen retirees battle flames with garden hoses, tow caravans across flooded plains, and hunker down in community evacuation centres with stoic determination. They shouldn’t have to battle the system as well. Losing a home so late in life is hard enough without having to become an expert in Centrelink regulations overnight.
Image source: Seniors Discount Club
The support is there, but one has to ask: is it reaching people quickly enough and in the right way? Or are our most vulnerable seniors slipping through the cracks at the very moment they need help the most?
As climate change intensifies and disasters become more frequent, this question gains urgency. We owe it to our elders to ensure the safety net actually catches them.
Now, a question for you, dear reader: Do you feel confident that if a disaster took your home, the Age Pension system would have your back? Or is there more we need to do as a society to support older Australians when nature turns their lives upside down?
This information is general in nature and does not constitute financial, legal, or tax advice. It does not consider your personal circumstances, objectives, or needs. You should evaluate your own financial situation and consider seeking advice from a qualified financial adviser before making any financial decisions.
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