Never delay your centrelink application

It’s estimated that many retirees who have delayed applying for the Age Pension are missing out on an average total amount of $69,000. We highlighted how this had happened to Geoff in August. The reason that he had missed out was that he was initially a self funded retiree and thought he wouldn’t be eligible for the Age Pension for several years. He didn’t really know the rules and was caught out to the tune of $75,000 over a three-year period when he was actually eligible.

Not knowing the rules is probably the main reason that retirees miss out on this valuable income. But there are plenty more. Here’s a shortlist of five shared by our advisers and Customer Service Team for you to check, to ensure that you’re not missing out needlessly as well.

But I’m still working

.. and so can’t qualify. That’s not entirely true. At some stage you will stop work. It may be soon. If you have already reached Age Pension age (66-67 depending upon when you were born), then you can apply before you actually stop. When it comes to the declaration of income, you are able to insert your full work income and this will be used in the income calculation to determine if it is below the income limit. Or if within the next two weeks you will be stopping or reducing work hours (and thus earning less income) then you can declare this expected lower amount.

This means that the income you will be receiving by the time the application is being processed – i.e. after you have stopped work. So factoring in your current full work income is not necessary – as long as you are honest and declare your expected work income from your expected retirement date. And if you are stopping work in a few weeks you can get your application in now and update Centrelink as soon as your arrangements change.

I don’t believe I’ll qualify

Many, many of our customers are very surprised to learn of their entitlements. Like Geoff, they have just assumed that they either earn or own too much. But the Age Pension income and assets test is far from static. It changes regularly, usually every six months. There has also been an expansion of the Work Bonus allowance and changes to deeming rates over time. It really does pay to recheck your eligibility frequently. You can do this for free using the Retirement Essentials Age Pension Eligibility Calculator. This calculator also helps determine if you miss out on a pension, then whether, as is likely, you will qualify instead for a Commonwealth Seniors Health Card.

I am restricted by the Pension Bonus Scheme

Many of our members won’t have heard of this scheme. Some will. It is no longer relevant to most retirees as it has been closed to new entrants for many years. It was an incentive introduced in 1998 to keep working longer, with the delay in your eventual Age Pension being rewarded by a lump sum payment. Whilst a few retirees are still delaying retirement in order to maximise this benefit, unless you qualified and were accepted into the scheme before it closed to new registrations in 2014, it is irrelevant to your application timing. So maybe it’s time to jump on to it and get your Age Pension application in.

I’m waiting until I’ve finished the renovations

Or the cruise. You may wonder what this would have to do with an Age Pension application, but it’s a very real motivation for many people. The reason is that, knowing they will spend a significant amount of money, they believe this will then reduce assets and so they will qualify for an even bigger fortnightly payment. It’s true up to a point. Lower assets can result in higher Age Pension payments. But if you qualify now, then delaying your application is pointless. You can apply, start enjoying regular Age Pension payments, however small, as well as the discounts and benefits associated with your Pension Concession Card. Then when you have paid for those renovations or that cruise, you can immediately report this change in assets and have the adjustment to your pension payment made. Waiting until you have spent this money is not helpful and just means you earn less in the meantime.

I’m waiting until my partner is ready

Thinking you need to apply as a couple is correct. But thinking that both of you have to be ready to receive an Age Pension is incorrect. When you apply Centrelink will assess you as a ‘couple’ or ‘household’ which means both parties assets are relevant. But as we’ve reported many times, those with younger partners who are still working and whose super is still in accumulation mode can often easily qualify as their partner’s super is not assessed by Centrelink. If you are Age Pension age and you believe you may be eligible, simply check this out using our free Age Pension Entitlements Calculator. Delaying your eligibility check may be costing you money.

We speak with many retirees who think, for one reason or another, they just wouldn’t qualify. It’s great to be wrong and be rewarded with income. But it’s far better that this happens sooner rather than later, don’t you think?

If you would like support to apply for your Age Pension, you can book an Age Pension Consultation meeting to help you better understand all the rules. Our advisers can also help identify changes you might be able to make to maximise your entitlements. 

What’s your story?

Have you applied and found out you could have been receiving benefits a lot earlier? If so, what do you believe contributed to this delay?