News and Articles

More than a million Australian retirees are potentially eligible for the Commonwealth Seniors Health Card (CSHC) and haven’t applied. This card offers savings that can make a real difference – on prescription medicines, bulk billing, and even some state-based discounts. Some estimates suggest savings of up to $3,000 per year or $60,000 over a 20 year retirement. But how much does the card really deliver? Some retirees expect thousands in discounts, only to find they don’t qualify for rebates in their state. Others are pleasantly surprised by unexpected perks that make a real difference. Knowing what’s available where you live can help you make the most of it. For an update on the different concessions and health care cards, read our latest guide: Concession and health care cards update.

Last week we confirmed the 20 March Age Pension rate increase of $4.60 (singles) and $7.00 (couples combined) for 20 March. This week we are pleased to confirm that all Retirement Essentials calculators have been updated with the new rates, ready for you to access.

Many people might dismiss the $4.60 per fortnight for singles as barely covering a cup of coffee. It’s even less in the case of couples. Yes, it’s true this is a small increase. Even lower, however is the increase in the Commonwealth Rent Assistance (CRA) maximum payment which amounted to less than a dollar, despite rental increases in 2024 of nearly 7%.

It is possible that this is the full extent of relief Age Pensioners will be given until the next round of indexation in September. But given the proximity of an early Federal Budget (March 25 brought forward due to the election by mid-May), it’s also a strong possibility that extra cost of living relief specific to older Australians will be included in this early Budget.

In the meantime, how to view these changes? As they say in the classics, it’s often not what you’ve got, rather what you do with it. And whilst that may sound flippant, far from it. Because buried in the detail of the base rate changes are further changes, which can help you review what you’ve got and see how to maximise all entitlements.

We’re referring of course to the income and assets test qualifying limits. They are both now more generous, with a $9.20 – $18.40 increase in income limits and asset limit increases of $1500-$2000. There’s a detailed explainer on how these limits work here, but the following is a quick refresher on why these tests matter so much.

The twice-yearly Age Pension increase is due to land on 20 March 2025. We reported in mid-February our predictions for singles and couples, and we’re pleased to say our predictions were correct within a few cents. The table below shows the increases, as confirmed by the Federal Government, including supplements for singles and couples. 

March Age Pension increases

The Federal Government has confirmed the new payment rates from 20 March 2025 for recipients of the Age Pension, Disability Support Pension, and Carer Payments. Singles can expect a total increase of $4.60 a fortnight and couples can expect a (combined) total increase of $7.00 a fortnight.

Why the unfreezing of deeming rates in 2025 matters.

Using deeming rates is the way Centrelink calculates the income you earn from your financial asset, regardless of whether you receive that income or not.

In May 2020, the then Morrison Government froze deeming rates to protect retirees during the economic uncertainty of COVID-19. This temporary measure was extended twice, most recently to July 2025, to help pensioners manage rising living costs.

The most recent freeze is now scheduled to end – but will it? With a federal election approaching and cost-of-living concerns still high, some wonder if the Albanese Government might extend it again.

If the freeze does end, how much might deeming rates rise? And how can (or – is it possible for ?) retirees (to) prepare?

What are deeming rates?

Centrelink uses deeming rates to estimate income from financial assets (excluding homes, home contents, cars, etc.) rather than using actual investment returns or the income you received. 

The current rates are:

Singles: 0.25% on assets up to $60,400, 2.25% on amounts above

Couples: 0.25% on assets up to $100,000, 2.25% on amounts above.

Deeming rates were much higher in the past, but were reduced as interest rates fell. They have remained unchanged since 2020.

How will an inheritance affect your Age Pension entitlements? Many Retirement Essentials  ask this question. As life expectancy increases, it’s not unusual for people to receive an inheritance much later in life—often when they are already retired and receiving an Age Pension.

If you do receive a lump sum inheritance (or any lump sum), there are some important things you need to know to avoid unexpected pension reductions or even overpayments that need to be repaid.

You must tell Centrelink

It’s essential to notify Centrelink within 14 days of receiving any lump sum. Failing to do so can result in overpayments that must be repaid, which can be difficult if the funds have already been spent. 

Susan and Terry’s inheritance dilemma

Susan, 70, and Terry, 75, received a $400,000 inheritance. They own their own home with a $180,000 mortgage and have $470,000 in combined super. They also like to keep a cash buffer of $15,000 for emergencies, and value their personal assets at $25,000. 

Currently they are receiving $41,735 in Age Pension as a couple, and they draw down their additional spending needs from their Account-Based Pensions.

Their top three questions were:

Would gifting inheritance money to their children affect  their pension?

Should they pay off their mortgage?

What’s the best way to use the money without losing Age Pension benefits?

Stop now – or keep working?

Retirement at 67 is often seen as the default, but is it really the best choice for everyone? Helen, who turns 67 in April, is weighing up her options. She has $275,000 in superannuation, $25,000 in personal assets, and $10,000 in cash. She earns $68,000 working part-time and receives a UK pension of $9,800 per year. She enjoys her work and isn’t in a hurry to stop, but she also wants to make sure she’s financially secure.

So, should Helen retire now or keep working part-time for a few more years? Let’s explore her options. Helen’s dilemma is a great example of the diverse experiences and attitudes of many Retirement Essentials members.  Some can’t wait to finish working so they can have new experiences and adventures. Others are genuinely loving their work and want to transition to a retirement lifestyle while keeping their options open.

At the time of writing we still don’t know when the Federal Election will be held, except that it will be before the end of May. This means that we still expect a Federal Budget to be delivered on 25 March. Even if an election is called, it is likely we will see a Budget Statement from Treasurer Jim Chalmers sometime in March.

So what will be in the Budget that’s of interest to retirees? That’s the really big question and one to which the team at Retirement Essentials has no guaranteed answers. We do, however, have a point of view about what is likely to come through. And we also have strong views about measures we would like to see included, to ensure that older Australians are treated both equally and fairly.

Here are our Federal Budget 2024-25 guesses and wish list.

Annuity rules explained

When we talk about retirement income, Account-Based Pensions (ABPs) often take centre stage because they’re the most common retirement income streams. But they’re not the only option.

Lifetime income streams, such as annuities provide guaranteed income for life, protecting against the risk of outliving savings. Yet very few Australians retirees choose them – only 3.5% of pension assets are in annuities, compared to 84% in ABPs. (APRA, 2023m as cited in Treasury 2023)

Why don’t more retirees choose annuities?

The Treasury’s 2023 discussion paper on superannuation in retirement noted several key factors which contribute to the low uptake: 

Pricing and longevity risk: Australians are living longer than expected, making annuities more expensive to purchase and provide.

Lack of flexibility: Many retirees worry about locking up their savings and not having access to funds for unexpected expenses.

Upfront cost: The one-time purchase price can seem high, even though it guarantees lifelong income.

We were delighted to receive some great comments to last week’s newsletter, as well as some really good questions. Two that stood out were in response to Amanda Hardy Lai’s article, How much is enough for a comfortable retirement?

Having read Amanda’s article Linda asked a very logical follow-on question:

‘How do you calculate how much you need in retirement funds once you are 70, 75, 80 or older?

(It’s) anxiety provoking not knowing whether you have sufficient funds left in pension funds to survive to an advanced old age after you retire. Please can you do an article on that giving some actual figures for Australians in their seventies, eighties and nineties compared to what you would need at 65?’

And Maree endorsed Linda’s question with one of her own, commenting:

‘Really good question Linda.
It would be great to get actual insight on how much 70, 75, 80 and older people spend per year, what their situation is e.g. their health, where they live, home or care home, whether they had any unexpected expenses that they didn’t plan for e.g. major home repairs, health issues, replacing major appliances and how/if they managed to do all this and continue living a comfortable retirement.
Did they have enough to do any overseas travel, how often, did they go on holidays within Australia, how often?’

Avoiding costly Centrelink mistakes with expert advice from Retirement Essential’s Head of Customer Service, Steven Sadler

Navigating Centrelink rules can be challenging, and many retirees are unsure about their entitlements and how to apply. At Retirement Essentials, we see this confusion play out daily in the questions our members ask.

To shed light on common misconceptions and provide expert guidance, we spoke with Steven Sadler, Head of Customer Service at Retirement Essentials. Steven and his team answer thousands of queries every year, helping retirees to 

understand their Age Pension eligibility, 

submit their applications correctly, and 

avoid common mistakes that could delay or reduce their benefits.