Nicole, Sharon and Steven know the answers
We never fail to be surprised by how many questions our members have when it comes to the detail of Age Pension entitlements. Our recent update on the 1 July Age Pension rule changes attracted 75 comments, which kept our advisers and Customer Services Team busier than ever, explaining the rules. These questions and answers are too good not to share, so today we are highlighting five of the most common entitlement questions we continue to receive.
But first, let’s start with what you can do yourself, to quickly get a snapshot of your own situation, before needing to ask any other questions. The main issue for many people is whether they will actually qualify for a full or part Age Pension. You can find this out by using our free and confidential Age Pension Entitlements Calculator. Your assessment will include Age Pension eligibility and whether you are likely to qualify for a Commonwealth Seniors Health Card or not. This will give you a foundation upon which you can start to plan the details of your retirement income.
Do I need to update my details?
There is often confusion regarding what Centrelink clients might need to do as rates and threshold changes occur.
Michael asked:
‘Does all this mean that there will be an automatic adjustment to my part Age Pension from 1 July?’
And our in house Guru, Steven Sadler, clarified this point:
‘Yes, Michael, Centrelink do automatically recalculate all Age Pension payments when changes like this occur, without any action required. Having said that though, Centrelink may have some outdated income or asset values on file for you. So it would be a good idea to check and update everything to ensure you get the most amount of pension entitlement possible.’
So please bear in mind these two reminders:
- You need to supply full details to assess your pension likelihood, so using the free calculator is a first best step.
- And whilst Centrelink will re-evaluate your situation when rates or thresholds change, it’s smart to use these changes as a prompt to review your own income and asset declarations.
Here’s the other Age Pension FAQs that keep coming up
Is Carolyn’s house an asset?
‘I will be considering retirement at the end of 2023. I note the increase to the single home owners threshold in July. My house is valued at approximately $850,000. Does this mean I will not be able to get the Age Pension or will any pension be reduced due to my house value. I am currently taking a small pension stream to top-up my part time employment.’
Trusted Retirement Essentials adviser, Sharon Sheehan, replied:
‘Your own home is an exempt asset for Centrelink purposes, so it is unaffected by any changes to thresholds. It’s only if you don’t live in your own home that it is counted as an asset, for example if it is used as an investment property.’
Is Peter a single or part of a couple?
‘I am still on a ‘part of a couple’ Age Pension but should be on single entitlements as per Section 24 of the Social Security Act, Centrelink informed me. But after five months I’m still waiting on a ruling. My partner is not an Australian citizen, therefore is ineligible for welfare benefits. What is the criteria? Was there a new rule in 2018 regarding the definition of a partner?’
Steven explains the ruling:
‘Thank you for sharing your experience with us! We wish you luck in getting the desired outcome. From our experience Section 24 of the Social Security Act is intended to allow Centrelink to treat special cases as singles (such as victims of domestic violence not yet formally divorced/separated). Situations such as yours where your partner is simply ineligible would not allow you to be treated as a single person. But we’d love to hear if you are successful.’
Julie needs help with Work Bonus credits
‘Can you explain the $4000 income increase to single pensioners. I was told it’s not money but points. How does this benefit work with someone earning $1856 a fortnight? I was approved in April for an Age Pension and since have received some radical and totally different payments each fortnight. Centrelink told me it all has to do with this $4000, but I am so confused about my differing payments.’
Nicole cuts through the confusion:
‘Thanks for reaching out. This is definitely something many people are confused about. What you are referring to is the Work Bonus, not the income test. Once you are approved for any Age Pension you become eligible for the Work Bonus to apply. This means that Centrelink ignores the first $300 per fortnight of employment income when calculating your entitlement. If you have no employment income then your work bonus ‘income bank’ increases by $300, e.g. if for three fortnights in a row you had no employment income then you would have increased the income bank by $900 so in the next fortnight you might earn up to $1200 ($900 income bank plus the $300 for the current fortnight) before Centrelink will assess the income.
Normally you would have to be on the Age Pension for some time without employment income to build up a bank but from 1 December last year Age Pension income banks were increased by $4000 from a maximum of $7,800 for someone who has built their income bank over some time, up to a maximum $11,800). Therefore, if you are earning $1856 per fortnight, the first $300 is ignored, the remaining $1556 is not assessed but does reduce the income bank. When the income bank gets to zero, then the normal situation where $1556 per fortnight is assessable will be the usual outcome. So you probably received higher Age Pension entitlements for the first few payments until the one-off increase in your income bank was exhausted.
If you are still confused about how this applies in your situation, both now and going forward, and want to better understand your situation we are always happy to discuss in more detail during a Consultation.
Ted is in residential age care
‘I am a homeowner, but I have been in a nursing home for 18 months. Is the value of my home an exempt asset?’
Nicole explains the way this might be viewed:
‘We hope you are doing well, Ted. This is a tricky one. Often, the home is exempt for up to two years, for the purposes of calculating Age Pension entitlements, but it may be exempt indefinitely if a partner remains living in the home. If your home is exempt for only two years there could potentially be a significant effect on your Age Pension payments at the end of this period. However, there is a whole other set of rules for your aged care fees in terms of how your home is assessed and its value may already be impacting your means-tested fee. We can help you to understand broadly how this may work in our Consultations, but to fully understand your position and to help prepare yourself for upcoming changes I suggest you find a financial planner in your local area that specialises in aged care advice.’
Can Phyllis be penalised for helping out?
‘I’m on a part Age Pension and have loaned $250,000 to my daughter. I have sent Centrelink a contract showing that the funds will be paid back in two years. I’m still counting it as my asset with the remaining $70,000 that I have in hand. Can you tell me if anything will change for me?
Nicole believes more detail is needed:
‘ It’s great that you have been able to help your daughter. In terms of the impact to your entitlements, it depends where the funds have come from. If you took funds you already had in cash or other investments and gave them to her then it is likely that you will have $250,000 less of investment assets, and $250,000 in a loan asset. So essentially your overall assessment may not change as your asset and income position is the same. However, a few other factors can change your assessment. To discuss your situation in more detail, we would be happy to go into more detail in an Entitlements Consultation.
Retirement essentials offers guidance and support across your retirement journey. Two important aspects of this guidance include maximising entitlements and answering your specific concerns in a Consultation. We’re always here to help.
I work part time and receive a part pension. do I need to add my part pension into my tax return.
Hi Sue, thanks for kicking off the comments with a great question! The Age Pension is a taxable payment so generally speaking yes you should include it in your tax return. Thankfully Centrelink will proactively send you a “Payment Summary” at the end of financial year to aid you.
i would image to say.. do I eligible to go to age care,or nursing home or retirement village when I do not have investment or Superannuation also no own of property. Just have saving account with say $5000. Any impact to me.
My friend retires this December aged 67, my question on her behalf is: if she does not access her super immediately, can she still contribute to her scheme. If so would affect her applying for the aged pension.
Hi Peter, it’s so kind of you to look for some guidance for your friend as she heads into retirement. Your question is a bit of a tricky one as there are different types of super contributions which have different age limits and other restrictions. I would love to help her to figure out what she can and can’t do, and discuss implications on age pension but we would need an appointment to get a little more information before I’d be able to explain how it works. She can book an General Advice Consultation which would allow us to discuss her situation in more detail and provide the guidance she needs. She can book an appointment through this link.
i am 74 and retiring next year, my wife is 12 years my junior
if we put some of her super into a ttr do the drawings affect my pension
also what about my drawings on my super ?
Hi Gerald, thank you for your question! The short answer is that yes, if your younger partner transforms her super from accumulation phase in to pension phase then your Age Pension payments can be reduced. It works a bit differently to how you think though as it is not the amount she draws down that is assessable, its the total balance in the account! I’d recommend booking a consult with one of our specialists as they can explain all the pros/cons you should consider to give you confidence that you are making the right decision. CLICK HERE to make a booking.
My wife and I are looking at a reverse mortgage for $50,000. Which we will spend on a holiday and some repairs and home improvements. My wife receives a part pension as I am younger and not at pension age yet. How will the reverse mortgage effect my wife’s pension
Hi Bruce, thank you seeking our guidance. Reverse mortgages are tricky to give certainty on as it depends on the specific type you get and how you use the funds. Based on your wording it sounds like you will be receiving/using a lump sum which means the $50K will be assessed as a financial asset on top of any other assets held. This could mean your wife’s part-pension reduces if she is being asset tested. If she is being income tested then this additional asset is not likely to impact her payments.
I receive super pension – part is a tax-free component.
Are tax-free components included in income when assessment for Age Pension is made?
Hi Joseph, thanks your comment! Generally speaking no, tax-free components are not assessable however as with all things Centrelink, the devil is in the detail. There are rules around which pensions and how much can be exempt from assessment so some pensions can have some of their tax-free component still be assessable.
With the Work Bonus arrangement I am in receipt a part pension based on assets test . When I declare earnings ,not enough to effect transfer to income test, my Work Bonus is decreased.
Subsequently when earnings are enough to have pensions assessed on income I have a reduced Work Bonus.
It appears that I am subjected to Income And Assetts test,contrary to Centrelink Guideline.
Multiple review requests over 12 month period have been ignored and as the requests are outstanding I cannot adjust my Income and Assett details.
How does one get information without recourse to FOI requests,Appeals to Minister etc.
Hi Patrick, thank you for sharing your experience with us! I’m sorry to hear of the hassle you have been going through for the past 12 months but do commend you for proactively seeking alternatives and not just accepting what Centrelink have said. It is unlikely that Centrelink are assessing both your income and assets at the same time but can feel like it as Centrelink will swap back and forth between the two as often as need be to ensure you receive the lowest amount of Age Pension. In terms of next steps I would first recommend raising a formal complaint by calling 1800 132 468. IF that does not result in a satisfactory explanation/outcome then yes you can raise the matter with your local MP who has the ability to raise the matter via their own channel with Centrelink.
I’m hoping I can ask an aged pension question please to your team. I’m currently receiving a part aged pension due to the fact I have an investment property valued currently at $650,000 & receive $320 p/w rent. I’m considering selling the house. If I were to sell the house for $650,000 would it make a difference to my aged pension – if I no longer have the house as an asset but have income instead?
Hi Jennifer, thank you for reaching out for support! For a definitive answer you would need to book a consultation with our specialists so we can fully understand your situation and advise on the impact however, generally speaking, no there would not likely be any change. Whether you have an investment property worth $650K or cash in the bank worth $650K, you still have the same total value in assets. Given the asset value is so high the loss of rental income is not likely to have any impact on your Age Pension payments.
when will I receive the cost of living allowance.
Hi James, thank you for shining a light on this! The “cost of living payment” was a one-off payment back in 2022 that has already been paid to those who were eligible. I believe you are referring to the upcoming “Energy Relief Payment”? This payment is due to be paid directly onto the power bills of all those who are eligible over the coming months and everyone who is entitled should have received it by September. If Centrelink are unsure of your eligibility they will contact you to confirm.
we are at retirement age but we assist my sister with her rent of 300.00 per week how does this effect us when we apply for the pension
Hi Peter, thanks for commenting and I commend you for helping to support your sister! Centrelink will assess the money you give her as a gift. We have written about gifting recently so you can read more about it HERE.
Hi, I’m retiring in October this year at age 65 years 10 months. I receive a DFRDB Pension through CSC of $28,238 indexed twice a year. At the top of my PAYG payment summary it defines my Pension as a capped defined benefit superannuation stream. Is this the same as the “Total Defined Benefit Income” included in the Aged Pension and Health Card Entitlement Checker?
I’m just trying to work out if and when I may be entitled to the Aged Pension.
Kind Regards, Ian
Hi Ian, thanks for being so specific and articulating your query so well! When completing our eligibility calculator you should enter the total gross amount you receive ($28,238) into the “Total Defined Benefit Income” field.
I relocated from Darwin to Brisbane last year in August and was given 12 months to purchase house. With interest rates up and the price difference is high I have decided to stay in a rented house. I would like to share the proceeds from the sale of my house with my children. How do I go about this.
Hi Ramalingam, I hope your move went smoothly! You can gift money to your children if you wish. We actually just covered this in a recent article that you can read HERE.
Hi team. my question is: when is a partner not a partner? please let me explain my situation. i turn 70 in a few months time, currently retired, have a commonwealth seniors health card, have a very small smsf that my partner is a trustee for and receive no income except for some franking credits. my partner and i sleep in separate rooms and she provides me with an allowance, pays my medical cover and a roof over my head.
i have used your very helpful questionaire some time ago) to see if i qualify for an age pension but failed due to my partners assets and income.
i dislike asking my patner for money so i rarely do and would rather go without.
i’ve worked all my life, sometimes holding down 3 jobs so when it has come to this where my pride and self esteem suffers, i am half hoping you may have some answers. thanks for listening.
Hi Peter, thank you for the thorough explanation. Given the level of support you receive from your partner Centrelink would likely assess you as a couple. There are 5 key areas Centrelink assess to determine if two people are considered a couple or not that you can read about HERE.
I am 71 yrs old but have exhausted my superannuation. My wife, 62, works part time and obviously earns a salary.
As I basically live off her earnings and get a part pension, I struggle somewhat. Any suggestions to improve my financial situation?
Hi Gavin, it’s Sharon. Yes there may be, depending on whether you are paid under the Income Test or the Assets Test, as your wife is under Age Pension age. You may benefit from a consultation with us so we can get a better understanding of your situation. I’d be happy to help you discuss your scenario to determine if there are options available to you. Our choice of consultations are available to book here
With many older Australians residing in apartments, do pensioners receive any specific assistance to help pay the high quarterly body corporate levies?
Hi Geoff, that’s a really good question, and unfortunately there is no really good answer. Body Corporate levies are only paid by homeowners, and there is no payment for this. Renters can receive a Rent Assistance payment, but there are no homeowner payments unfortunately. This is really a lifestyle decision to purchase an apartment. What we usually factor in when we speak with our customers is how their retirement income is looking over their retirement years, and what their retirement income goals are, to see how this can be best achieved for them. That’s all part of our general advice discussions we have in our meetings. We have our retirement forecasting tool we can use in our meetings if you are keen to see the impact of this on your retirement expenses over a prolonged number of years to help you maintain your chosen lifestyle. If you would like to book a Strategy Consultation meeting with us, the bookings can be made here
Hi Megan/Nicole/Sharon/Steven,
My wife and I immigrated to Australia since April 1990. We’re both naturalized citizen of Australia and were born in 1958. I suppose we may be eligible for our age pension when we turn 67. However, we are now living in Thailand since January 2019. We realize Thailand isn’t one of the age pension agreement countries with Australia and the 35 years residency requirement would apply. And we’re told that we need to be and live in Australia for 2 consecutive years once our pension is approved. Could you advise us on our option(s). Will pay you the consultancy fee for your service. Thanks.
Hi Henry, thanks for your question. Yes the 35 years residency requirement applies if you leave Australia. The pension supplements are not paid on top of the base pension if you live outside Australia. There are rules around returning residents who apply for Age Pension after being overseas, and them needing to remain in Australia for two consecutive years, and we do offer General Advice consultations to discuss your scenario more fully. We look forward to helping you and these appointments can be booked here
Iam 65 and living off my super that I pulled out
I own my house and have no loans , and i have a inheritance to come ,am I entitled to the pension or part pension ,
Hi Antoinette, this is Sharon, you have a good question. Many people find themselves in this scenario as they approach retirement. Centrelink has an Income Test and an Assets Test which you need to meet. You need to be age 67 to be approved for Age Pension. We can help you understand how your situation qualifies for full or part Age Pension, as we need more information in order to respond to your question. We do have a free eligibility calculator here which checks your eligibility once you enter details of your assets and income. I would be happy to help you better understand your options if you would like to book a consultation to discuss further with me here
Hi Guys,
My wife and I are both aged pensioners (79yrs) and receive a part aged pension. We both have/had superannuation. Last August my wifes superannuation payments finished and our combined income was reduced accordingly. We were advised by Centrelink that this would not make any difference to my wifes part pension which would remain the same as when she was receiving her superannuation. Is this correct?
Hi Ron, thank you for sharing your situation with us! Centrelink base your Age Pension payments solely on either your income OR assets alone (not an amalgamation of both). If Centrelink are assessing you based on your income (super drawdowns do not count as income) then it is possible that reducing her super (an asset) to $0 would have not impact. There are a few ways to look at it though so I would recommend speaking with one of our specialists about how to Maximise Your Entitlements.
Hi, I am still working full time at 67 yrs but plan to retire soon. My husband has retired, 68 yrs but unable to get an Australian pension due to my salary. We both receive a UK pension and each of us also receive a private pension monthly. How do Centrelink assess this when calculating your pension?
Hi Tina, congratulations on the upcoming retirement! Centrelink will asses your UK pensions as income however the “private” pensions you mentioned I presume are account based pensions set up through your superannuation? If so they are assessed as assets. CLICK HERE to read more about account based pensions.
Good Morning,
I had been living and working in Australia for decades, then I retired and now I’m back to Italy and I get my Australian age pension. Yeas ago my husband died therefore I started earning my Italian survivor’s pension and that is intended as a new “income” and due to that it’s taxed by Australian authority in this way: “Your pension amount starts reducing by $0.50 for every $1 your income exceeds above amount and does not include the work bonus”.
As you know there’s a treaty between Italy and Australia to avoid double taxation therefore I get the gross of my Australian age pension and then I must pay taxes for my Australian age pension in my Italian tax return.
That said I wander if it’s possible to avoid the “first” taxation of my Australian age pension, I mean the one based on the rule I’ve quoted above because it generates a sort of double taxation anyhow in my opinion.
Thank you in advance.
Hi Maria, thanks for reaching out all the way from Italy! Sorry to be the bearer of bad news but no, there is no exception or way around Centrelink’s rule. The pension will be reduced by 50c for every $1 you earn above the threshold.
I own my own home and will be applying for the age pension next year although I will only receive a part pension due to assets. I know if I were to sell my home now and buy another more expensive, then that would be exempt from calculations. However, if I sell after I start receiving the pension then I believe Centrelink would still consider my home to be the lesser value of my current home. Is that correct?
I don’t want to sell and move now but may do in the future. My current home is valued at about $500k but I would like to move to a nicer area and perhaps buy around $700-800k. If I were to do this after receiving the pension, would my pension still be calculated on the exempt value of my $500k home?
Hi Kerian, thanks for sharing your scenario! Centrelink assess whichever property is your primary residence as the one exempt from asset testing. So if you are on the Age pension and then move to the newer, more expensive home, Centrelink will apply the exemption to the new home as it becomes your new primary residence. Be mindful that if you go through a period of owning both homes at once then whichever is not your primary residence will be assessed as an asset which can impact your Age Pension significantly.
I’d like to continue to do my Air Force Reserve work after I turn 67. Can you let me know if the Australian Defence Force Reserve income counts towards the Income Test? I’ve been advised it does not – but would like your advice.
Hi Chris, well done and thank you for your contribution to the Air Force Reserves! I can confirm that any employment income you receive, regardless of it’s source/your employer, is counted towards the income test.
Thanks Steven 🙂
I had found this and thought it might be the relevant ruling? To clarify, I only do Reserve work – never Continuous full-time service.
Social Security Guide
Income test
Under the provisions of SSAct section 8(8)(w), income from Reserve service is exempt from the income test. However, income earned from Reserve service during ‘continuous full-time service’ (1.1.C.335) is not exempt and is assessable under the income test.
Hi Chris, thank you for clarifying and my sincere apologies for the incorrect information I initially gave. My understanding was that there was no exemption however as you have pointed out that only applies if it is during “continuous full-time service” which is not applicable in your situation.
Thank you so much Steven
I really enjoy my ADF Reserve work and was hoping to continue it for a few more years. I read the rule about it in the Legislation, but it can all be pretty confusing for us lay-people. 🙂
It’s great to be able to email your team and get your thoughts, and we all really appreciated that you take the time.
I have worked for several years in Germany and Spain and been living for more than 10 years in Australia. I am aware of the social security agreements, however will all the eligible pension years from Germany and Spain be counted in Australia or only from one country?
Hi Frank, sounds like quite the life you have lived with years spent in Germany, Spain and Australia! The good news is that so long as you meet the 10 years in Aus requirement, that is all you need. You don’t have to worry about using years lived in other countries. If you had only been in Aus for say 5 years, then yes you would want to use time spent living in an agreement country but that isn’t necessary for you.
Thank you Steven, I thought that in order to get the full Australian age pension it is necessary to qualify for 35 years. Pension years from overseas are eligible for social security agreement countries with Australia. But I am not sure if several countries would count, I.e. Germany and Spain?
Am I wrong that 35 years are required to get the full Australian age pension?
Hi Frank, thanks for keeping me honest! The 35 years comes into play if you want to either live overseas or travel on holiday for more than 26 weeks, once you receive your Age Pension. That’s when Centrelink look at how many years you have lived here as a permanent resident/citizen. Whilst you are living in Australia or travel abroad for less than 26 weeks, your Age Pension amount will not be impacted. CLICK HERE to read more.
Thank you Steven, However I thought in order to receive the full Australian age pension I need to have accumulated 35 years? Otherwise it will be a pro-rata amount only? Am I wrong?
Hi Frank, that is incorrect. As per the previous link I provided, the 35 years only comes into play if you leave Australia for +26 weeks/move overseas. So long as you are living in Australia and holiday for 25 weeks or less, your Age Pension will not be impacted by the number of years you have resided in Australia.
Sorry Steven, That was a double post.
Will years from Germany/Spain count towards the 35 residency years in Australia? Should I decide to spend more than 25 weeks away?
Hi Frank, no that is not how it works. You may wish to call Centrelink’s International Services team for further clarity on 131 673.