Ian Cubitt's Classic Home Improvements

Classic Home Improvements

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Granny Flats and The Age Pension

Whilst ‘Granny Flats’ aren’t just for Grannies, by any stretch, some of our clients do come to us at a stage of their life when they are receiving a part or full Age Pension.

Many of our customers who are in this position would like to decide with their children or relatives to build a Granny Flat to live in, for all the benefits that it can bring to both themselves and those in the main house on the property.

Often our sales team are asked by customers as to how they can build a granny flat to live in, without losing or affecting their Age Pension. Our sales team are trained to give you clear general advice on this topic.

The great news is that it is rare that a customer coming to Ian Cubitt’s Classic Home Improvements in this scenario walks away without a solid plan to build a Granny Flat and keep their Age Pension intact.

When it comes to building a Granny Flat on your child, relative or friend’s property, you are entering into an agreement for them to allow you to live on that property for the rest of your life, or until such time as you choose to no longer live there.

It is very wise to get a simple legal document in place to set the boundaries around this agreement. Again, our sales team is trained to point you in the direction of a reputable solicitor who can draw up such an agreement at a reasonable price – after all, we are mindful that you are managing on a Pension!

When you build a Granny Flat on a property for which another person has a Title Deed, you are effectively “gifting” the cost of the Granny Flat to this person.

The laws about gifting in Australia are largely misunderstood and often thought to incur a tax. This is not essentially true. Tax on gifted amounts are triggered for the person RECEIVING the gifted amount, if it significantly increases their annual income amount.

Fortunately, at the prices at which Ian Cubitt’s Classic Home Improvements build Granny Flats, the chances of the gifted amount inflating your child or relative’s income to a point at which it triggers a tax is remote.

More importantly, if you are already receiving an Age Pension, the gift amount given to build the Granny Flat will deplete, not increase your assets, therefore you will not lose your Pension amount.

Even if you are selling your current home, the combined amount of your earnings from the sale minus the Granny Flat build amount will leave you in a position to retain (or possibly increase) your pension amount.

Reasonableness Test

As you will already know, everything related to the Age Pension is Centrelink related and must run through the proper processes to ensure that people aren’t rorting the Age Pension system. So be prepared to undertake what Centrelink calls a “Reasonableness Test” which will look at the amount you are spending on your Granny Flat and therefore gifting to the ultimate owner of the Granny Flat on the property.

With our team to guide you through these steps, we will have you building your Granny Flat in no time and living happily with family or friends, with financial strains behind you!

Our purpose built Exhibition Centre provides clients and potential clients with the opportunity to compare products from numerous suppliers as well as being able to see other home improvement products all in one place.

Save time and money visit our outdoor living centre situated at 152 Russell Street, Emu Plains (between McDonald's and Red Rooster).

We are open 360 days a year!

  • We have over 150 years of collective experience in the building industry.
  • An award winning track record of delivering projects on time and on budget.
  • Our diverse range of products and packages can be tailored to suit both your dreams and your budget.
  • We're an Australian owned and operated company.
  • We're accredited members of HIA (Housing Industry Association).


  • 152 Russell Street Emu Plains, NSW 2750
  • 1300 721 150
  • +61 2 4735 2988

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