Five things you may not know

Last week we introduced you to the concept of the five pillars in retirement; the major sources of support that ensure income and financial wellbeing post-work.

These are:

  • The Age Pension
  • superannuation
  • the primary residence
  • savings and investments and
  • work.

This week we are sharing details on the Age Pension application process as well as the maximisation of entitlements. We are doing this because Australia’s Age Pension provides at least partial retirement income to 80% of Australians by the time they are in their 80s.

First here’s some context about the Age Pension, then we’ll consider ways you can maximise your entitlements – as well as the five things that you may not know that can streamline the entitlement process at any age or stage.


Currently about 70% of Australians over Age Pension age receive a full or part Age Pension.

By the time all retirees hit their 80s, an additional 10-12% will apply for and receive the Age Pension. This is generally because they have spent down their assets and now meet the means test.

Receiving this entitlement is not a homogenous experience. Pensioners can encounter very different levels of comfort in retirement.

The first point of difference is that about 85% of those receiving a full or part Age Pension are living in their own home, so they retain a degree of accommodation security

The balance of those on a full Age Pension who are renting can come close to the generally accepted  poverty line which is half the median household income.

Those on a part Age Pension may also have sufficient personal savings to live a more comfortable existence.

Whichever Age Pensioner profile you have, or may be going to experience, it is highly likely that cost of living increases are having a big impact on your weekly budget. Making sure you get as much as you can is of critical importance.

What can you do?

There is a widespread fallacy about the Age Pension that it is important to dispel.

This is that, once you qualify, it is a ‘set and forget’ formula – you will simply receive the same rate of pensions from here on in.


And then there is a similar belief that if you have received a knockback, you are unlikely to ever qualify – again incorrect, as the numbers tell us that most people eventually do become eligible.

So the first important thing to know about the Australian Age Pension is that there is almost always something you can do.

And that you need to commit to keeping up on all the changes that occur frequently during the calendar year. These include base rate changes, deeming rate changes, supplements and income and asset thresholds. Put simply, if you don’t know when these change, you won’t know that you might now qualify for extra income.

The good news is that you don’t have to go trawling through the internet to find this information in a timely fashion. That is what your membership of Retirement Essentials provides. Whenever changes occur, we notify all our members and adjust all online calculators accordingly.

At any time, you can log in and recheck whether your current entitlements might increase, or whether you are now due for payments you had not previously received.

Government departments are not sentimental about mistakes – and Centrelink is no different.

The onus is totally on you to get your details right – and update them as your situation changes.

The hard fact is that you will not get back pay if you have made a mistake in your own favour.

And you will have to pay back if you have made a mistake which works in Centrelink’s favour.

This is why Retirement Essentials has created the Age Pension Entitlement Calculator. Frequent use of this calculator (i.e. when rates or thresholds change), supplemented with a consultation with an experienced adviser if you have further needs, will ensure that you don’t get caught out and miss extra income.

Staying Centrelink savvy

We asked the Head of our Customer Service Team Steven if he would share the five things that people often don’t know about the application and review process. Here are his handy tips:

Bank accounts

Across the years many of us seem to accrue bank accounts like odd socks. Often they have tiny balances, spread across a few different banks. Before you apply for an Age Pension (or reapply if you’ve previously missed out) make sure you consolidate to just the account/s you really need. The reason is that your application won’t be approved before you have supplied all asset information and it may take some time to gather documents across multiple accounts.


You may also have more than one superannuation account. It usually makes sense, regardless of whether you are applying for an Age Pension or not, to consolidate your super. Some accounts may have provision for life insurance so you may be doubling up on these charges as well as administration fees. Finding lost super is now easy, using the MoneySmart online link.  It’s not smart to put yourself in the position of needing to chase too many providers for evidence of your accounts for Centrelink dealings.

Foreign pension status

If you are a possible recipient of a foreign pension it is important that you clarify how much you might receive, as Centrelink will assess this income before approving any application. Many people think they will only get a few dollars a week from another government and that this won’t make any difference. It will. So start the ball rolling early by applying and then you have clear guidance on the amount as well as the documentation that Centrelink will require.

Thresholds matter

Applying for an Age Pension is a big job. There is the application and the process of submitting a lot of supporting documentation. It is important you do so as soon as you can (up to 13 weeks before the official pension age) so that you don’t forgo income you could have earned. But there is no point in applying if you are well over the income or assets thresholds. And if you are well over the limits but apply, you won’t be told you are ineligible until after you have completed the entire form and submitted all documentation.  You can easily work this out up front by using the Retirement Essentials’ Age Pension Eligibility Calculator, free of charge. If you are well over the limits, then now is not the time to proceed. But you might well be eligible for a Commonwealth Seniors Health Card (CSHC), particularly now that the income thresholds are rising so significantly on July 1.

If you just miss out, then you may want one of our experienced advisers to check your sums as it could still be possible that you are eligible. This is when knowing the fine print of Centrelink rules is a bonus.,

Finalising lodgement

Don’t think that filling in the 26-page form and similar sized income and assets declarations is the end of the matter. Your application is not lodged until all the supporting documentation has been provided. Yes, it’s not done until it’s totally done. So you will not receive back pay to when you submitted the forms – only to when the complete application and other required records are received.

In summary,

Keeping an eye on your full, part  or possible future pension entitlements is very important and can lead to increased income in retirement as a reward for your vigilance. If keeping track of what is going on sounds too hard or too tedious, then Retirement Essentials’ Age Pension Eligibility Calculator and adviser consultations can be used to ensure you are not going without your maximum possible entitlements.


Check Your Entitlements