And how to avoid ‘the gap’
Qualifying for an Age Pension is a process most Australians will experience at some stage in their retirement. Timing your application and knowing how back pay works is super handy to avoid missing out on much-needed income. Today Steven Sadler steps us through the rules.
The main rule is that the Age Pension is backdated to either the day you lodged your application or the day you became eligible, whichever is the more recent of the two. Here’s how it works.
Day of lodgement
This differs depending upon the way that you apply. If you apply via Centrelink’s website (as Centrelink prefers), the claim is not considered lodged until the application questions are answered as well as all supporting documents have been provided. This makes sense because Centrelink doesn’t wish to waste time assessing claims that don’t have all the necessary supporting documents.
However, if you apply with Retirement Essentials or directly on your own behalf (by handing in a paper copy of the claim forms at a branch) then the day you submit your claim is considered the day of lodgement, even if you have zero supporting documents to go with the forms.
Day of Eligibility
Most people know and love this as the day they turn 67. Some people even know that you can apply 13 weeks prior to turning 67, but you’ll only receive payments from your birthday. What very few people know is that you can actually apply 13 weeks prior to meeting ANY of the eligibility criteria (not just age) and still be approved. But as with the age rule, you only get paid from the day you become eligible.
Let’s say you are 70, working full-time and earning a salary over the threshold, so technically ineligible but planning to retire in eight weeks’ time. You can lodge your claim now knowing full well you exceed the threshold however, because, as long as you provide the proof of retirement (such as a separation certificate or equivalent) then you can be approved. But you will only be back paid to the day of retirement. This is very handy for those trying to avoid a gap period between losing employment income and gaining Age Pension payments. This technicality is not stated anywhere on Centrelink’s website but is useful for our members seeking to streamline their potential payments.
What if you are declined?
So, your claim got declined, which is frustrating, but the good news is that it isn’t set in stone effective immediately. You have 13 weeks from the date you were declined to report back to Centrelink and request an appeal if you can now prove your eligibility. If your appeal is successful, then your entitlements will be back dated to the day of lodgement/eligibility. The tricky part is that you only have one shot at appealing, so if you are declined because you were not able to provide, say, three documents, you must provide all three within the 13 weeks and before you request the appeal. If you try to appeal with only one of the three, then when the assessor reviews this information, they will decline your appeal as you have not provided sufficient evidence. And then that’s it, you can’t appeal a second time. You will now have to lodge a new claim and then the back dating starts again, as of the date of the new claim.
What about a change in circumstance?
Let’s say Iris, who is on a part Age Pension has to spend $40,000 of her super on medical expenses. She informs Centrelink that her financial assets (bank account funds) are now $40,000 lower. Would the adjusted (i.e. higher) fortnightly amount be back paid to the date she informs them? Or do the wheels grind slowly and her payment only changes from when Centrelink confirms this?
There’s good news here.
So long as you notify Centrelink (with evidence) of a change within 14 days of the change occurring, your payments will be backdated to the day of the change, even if it takes a couple of months to process it. If you haven’t notified Centrelink within the 14 days, any changes will only be effective from the day Centrelink action it.
It’s difficult keeping up with all the rules and detail of Age Pension entitlements. That’s why we share the knowledge and experiences of our team of Age Pension entitlements support staff as well as our financial advisers to keep you up to date and aware of any tiny rule changes. An Age Pension consultation can help you with all the rules if you need further assistance.
At any time, you can check your own eligibility for free using the Retirement Essentials Age Pension Entitlements Calculator. You may also benefit from a Maximising your entitlements consultation if you want to ensure you are receiving everything you are owed.
Was this information helpful?
Or do you have further questions on how backdating actually works?
Really clearly explained
When we lodged my wife’s claim earlier this year it took five months for Centrelink to process the claim. We received our updated pension amounts in due course but the 13 weeks in totally out of date. I also have an adjustment which needs to be processed by the debt collection team which has been outstanding since September last year. I was told the delay is due to the debt collection team being seconded to claims processing.
A workmate of my wife who became eligible for the pension around the same time was told by a Centrelink staff member that she could not lodge her claim until her birthday. This kind of misinformation occurs all the time. Bill Shorten’s claims that the extra staff hired last year have addressed all the outstanding claim backlogs is totally dishonest and the federal government past and present, should hang their heads in shame for creating such a mess during these challenging times.
My claim took 18 weeks from the date I lodged. My circumstances was that I was worked a 9 day fortnight but our entire team was made redundant. I already turned 67yrs last Oct but redundancy was not on my radar and also did not expect to end my work life for several more years and being retirement age I believed my chances of gaining further employment was small. Although I got a redundancy package I very much needed to use a lot of this just for living expenses while waiting for my claim to be processed so yes the 13 weeks to process claims needs to be addressed.
well if u work part time i dont think you need to retire before receiving the pension or part thereof so i would advise putting in your application 13 weeks before or check what the current delay is and put in accordingly (eg 18 weeks not 13)
Hi Patrick, thanks for getting in on the conversation! Just be mindful of how early you lodge a claim, if you lodge more then 13 weeks prior to becoming eligible then your claim will be declined. 13 weeks is the maximum head start you are allowed.
I had a change in circumstances by having a visitor stay for 3 months. Because this visitor was of the opposite sex I was put on a couples pension instead of a single.
The visitor could obviously not receive any benefit from centrelink so I lodged a section 24 to have the decision overturned.
That was in November 2023 and I am still waiting for a decision in July 2024.
very poor service on centrelinks behalf.
Very helpful thank you
Can you clarify the example you use above of someone over the threshold applying eight weeks early. How can you get an employment separation certificate if you haven’t finished work? Won’t they just knock back the application?
Hi Kara, you would obtain the separation certificate after you finish work and then provide it to Centrelink. Yes there is a chance the claim could be declined if reviewed by an assessor prior to your resignation however with Centrelink’s current processing times this is unlikely. If it did get declined then as per the article you would simply appeal the decision once you have the document so that you could then be approved from the date of resignation onward.
This is about how the pension is backdated, not responding to what you have in the email -Will my Age Pension payments be backdated is one of our most frequently asked questions. As with many questions concerning Centrelink payments the answer is … it depends.
I was told a number of times my pension would not be backdated, but after a 4 month wait they said that ‘after careful consideration they decided to backdate it to lodgement day. So you article was not helpful at all, a waste of time infact.
Hi Allan, I’m saddened to hear you feel the article was a waste of time. I’ve had a look for any emails we have received from you as mentioned in your comment but could not find any. I’d be happy to discuss your concerns further if you were to email them to hello@retirementessentials.com.au
Wish I had known this earlier. Our application took over a year to be accepted. We sent many copies of certificates.
Hello Steven,
If I have to withdraw some money from my pension fund, the fund will have to reassess and recalculate my pension (monthly in my case). I guess I have to wait until the fund completed this process, before I can inform Centrelink. My concern is if the fund informs me of their reassessment past the 14 days. Will Centrelink penalize me?
Hi Charles, this should not be an issue because Centrelink do not assess your superannuation pension so you do not need to wait for that to be recalculated. You only need to let Centrelink know about the reduced balance of your pension account after the withdrawal has come out and show where the money went so that Centrelink knows it was not re-invested somewhere else.
Thanks for the updates Steven appreciate being kept advised of all the legalities of Centrelink.
Can you please advise what kind of proof Centrelink want when you spend your own money ie: on a renovation for instance? If using various trades for instance would you need to account for every penny? Ie: painters, pavers, carpenters, new kitchen etc…
Is this only applicable to superannuation pension income stream or savings accounts etc… once you’re on a pension at pension age 67.
Does it include Superannuation still in accumulation mode just prior to actually being 67 and retiring?
Hi Susan, thankfully you don’t have to account for every dollar spent, Centrelink will be happy to presume that some money has gone to bills, groceries, cost of living etc. So long as the majority of the funds are accounted for Centrelink will be satisfied. For further assistance you can book a consultation HERE.
Your advice looks very helpful for retirees and future retirees. Does this service cost $ us as individuals?
Hi Steve, great name by the way, yes we do have fees for our services. CLICK HERE to see the range of services we offer and the fees applicable.
Hi. Can I get a full pension if my brother lives in my house??
He does not work. He does not pay me rent or buy his own food. I pay for everything
Hi Debbie, thankfully Centrelink do not take issue with immediate family living with you so your brother’s presence will not impact your Age Pension.
Hi, I am separating from my partner on whom I have been dependent for many years. He is now unable to support me as his financial situation has taken a dramatic drop. But because I have very little savings of my own, he is ok to continue supporting me between the date I apply for the age pension for however many weeks it takes to actually get payment. How will Services Australia/Centrelink view this arrangement? Will they regard his support in the waiting period as proof that the relationship is not really over? How do other people with low savings manage please?
Hi Megan, this is a tricky scenario to navigate as Centrelink assess these situations on a case by case basis. You can definitely try to declare yourselves as separated but ultimately Centrelink will make their own decision. There are 5 key components that Centrelink take into consideration when considering whether two people are a couple or not, you can read more about them HERE.
Hello Steven
I have visited the Centrelink website a few time searching for this info so thank you for your column. My question is as to whether you can start filling out your application before the 13 week mark so you are ready to lodge when the 13 week mark arrives. I cannot see any link to Centrelink forms. It just states you are not eligible to lodge an application until this date eg 13 weeks before my 67 birthday.
PS Bill Shorten stated on the news yesterday aged pension claims are now 60 days down from 76 days. Hmmm
Hi Lynn, glad you found the info helpful! If you are applying yourself via a physical paper form then yes you can fill it out whenever you like and just sign/date and then lodge it at the 13 week mark. If you are applying via Centrelink’s website then it will not let you lodge prior to the 13 week mark so you have to wait. Similarly with our service, to avoid the risk of lodging the claim too soon and getting declined we only allow our service to be bought if you are within the 13 weeks early period.
Really great explanation of a confusing system. The only thing I would add is that you can update your assets online thru Mygov. However it is not that easy.
A friend has been living off his super and not claimed the pension which he was eligible for 4 years ago. When his super runs out he’s going to claim the pension. I might add the super was only around $7000 he lives frugally. Will he be back dated? Thank you
Hi Lilian, as per the article, if you have been eligible for the pension for some time then Centrelink will only backpay to the date of lodgement, not eligibility. Your friend should probably look at applying now/sooner if they are eligible.
I am 67yrs and was just approved a part time pension 22/7/24 and as my partner still works I submit their payslip fortnightly as their gross pay impacts on what I get. Although we are both in equal partnership for utilities, groceries and other bills my money is substantially lower than theirs and we each have personal obligations such as life insurance, health insurance and, at least for the next year or so, a car to maintain. My question relates to whether I have to report to Centrelink a manual one off (or twice yearly) small withdrawal ($5,000) from my personal super fund that will enable me to meet my personal living expenses?
Hi Gail, good question and the answer is that it depends. Centrelink will get an update on your super balance from your super fund in March and September each year. So if you make the withdrawal just before either of these months then you can let the super fund update Centrelink for you. If you made the withdrawal in say May or November then it would be best to notify Centrelink so that your pension can be recalculated accordingly and you don’t miss out.
In my case after working full time most of my life , I had expected to get aged pension I was very naive as I was younger than my husband I do not qualify , I am now 70 still no pension I think this is wrong when I had paid my taxes all my working life .
So be warned if younger than spouse. I would of kept working had I known this.
My wife claims a carers pension for our daughter (not a huge amount, $150 a fortnight) she is 68years old. Retirement essentials told her she could not get a health care card because of this pension. She saw in the paper a financial adviser says she is entiletled. What is the situation? Regards Mark
Hi Mark, thank you for raising the conflicting information, I have double checked this to be certain but I can confirm that what Retirement Essentials advised is correct. THIS is Centrelink’s website confirming that you are not eligible for a CSHC if you receive an income support payment and if you click on the link in that page to see what an income support payment is defined as (HERE) you will see that the carer’s payment is included.
excellent information
Always feel well informed reading same
Many thanks
I wonder how much it costs our federal gvmt to administer all these rules? Surely it would be better to just allow everyone to qualify at 67 years. We need to take a leaf out of New Zealand’s book with age pension.
Hi, my husband is over 70 and we were wondering if its possible to have an investment property and be working part time and receive an aged pension if he retires?
Hi Leonie, it is possible so long as the total value of your income and assets are under the allowable thresholds.