Amanda Hardy Lai, Author at Retirement Essentials

Rental income and Your Age Pension: Understanding the rules

by Amanda Hardy Lai | Centrelink Age Pension

Owning an investment property can be a great way to boost your retirement income. And about one in five Australian households owns a property beyond their main home (ABS, 2019–20). So this is something many retirees are juggling when it comes to thinking about retirement.

Here’s the tricky part: Centrelink doesn’t treat rental income the same way the Australian Tax Office (ATO) does. Many people assume the deductions they claim on their tax return – depreciation, borrowing costs, or renovations – will reduce their Age Pension income assessment. That’s not the case, and it can lead to surprises.

Let’s go through the essentials so you can see clearly what counts, what deductions are allowed, and how to avoid negative impacts on your Age Pension.

What counts as rental income?

Centrelink classifies rental income as rent from investment properties or land. Income from boarders or lodgers is assessed separately.

What deductions are allowed?

Centrelink is more selective than the ATO. You can deduct:

Agent’s fees

Repairs and maintenance

Land and water rates

Loan interest (where the loan was obtained to purchase the rental property)

But you cannot deduct:

Capital depreciation

Special building write-offs

Construction costs

Loan establishment fees

Tip: If your property runs at a loss, Centrelink treats the income as zero. You also cannot offset losses from one property against income from another.

Gifting and the Age Pension: What you need to know

by Amanda Hardy Lai | Centrelink Age Pension

Many people like to help family members financially. While gifting can be a meaningful way to support loved ones, it can also have unintended consequences for current or future Age Pension entitlements. Centrelink has strict rules on how much you can give away without affecting your payments, and exceeding those limits can reduce your entitlement for up to five years.

This article explains how the rules work, what the gifting ‘free areas’ are, and uses an example to show how gifts can stack up over time.

The gifting rules refresher

Centrelink applies deprivation provisions when you give away assets or income for less than market value or don’t receive any consideration in return. If how much you gift is more than the allowed free amount, the excess is treated as if you still had it. This means it continues to count for your assets test, and deeming rules apply, so that income is also assessed on the excess. The key point is that even though you no longer have the money, Centrelink will still count it as a deprived asset for five years from the date of the gift.

How much can you gift?

The free areas are the same for singles and couples:

Up to ten thousand dollars in one financial year.

A maximum of $30,000 over a rolling five-year period, with no more than $10,000 in any single year.

If you gift more than this, the excess is treated a

Mapping your retirement planning options without the stress

by Amanda Hardy Lai | Planning for Retirement

Retirement planning can feel like a merry-go round of decisions, leaving you dizzy with the different directions you can pursue. With so many moving parts, it’s easy to feel overwhelmed. Two recent member dilemmas have highlighted how different people approach planning — and how enhanced clarity can make the process feel surprisingly manageable.

Susan: Finding the sweet spot
Susan had done her homework. She knew how superannuation and Account-Based Pensions work, had a target super balance in mind, and knew her desired retirement income. Yet she kept asking herself: how much is enough? Is there a ‘sweet spot’ where her super is just right — large enough to support a comfortable retirement but not higher than necessary?

Her main concern was whether she could afford to retire earlier and ease the pressure of making ongoing contributions, or if she needed to keep working part-time a little longer to build up her super balance. Through a Retirement Advice Consult, Susan explored both scenarios side by side. This gave her clarity not only about the numbers but also about the lifestyle trade-offs involved. She came away confident in understanding whether her $55,000 annual income goal was realistic – without locking herself into working more than she wanted.

Richard and Barbara: Downsizing and super boosts
Richard and Barbara were thinking about downsizing in the next few years, but wanted to understand how the move might affect their retirement plans. Because they hadn’t owned their home long enough (10 years), they weren’t eligible for the downsizer contribution. However, being under 75 meant they could still take advantage of the Non-Concessional Contribution (NCC) bring-forward provisions.

In a Retirement Advice Consultation they were able to model their spending to check whether their current lifestyle was sustainable in the years leading up to the move to a smaller home. From there, we looked at the way that putting surplus funds into super could help stretch their savings further. Seeing these scenarios mapped out gave Richard and Barbara a clearer picture of how their home, super contributions, and Age Pension could work together — and the reassurance that their plan could support both the move and their longer-term financial security.