All the rules you need to know
Ever since the Robodebt debacle many of our readers have been understandably anxious about what they do, and don’t, need to tell Centrelink. There are times when you must tell Centrelink and times when you don’t have to, but it’s in your best interest to tell Centrelink quickly. A great example of this is spending money on a renovation to your home. In this situation you spend an assessable asset (money in the bank) and add value to a non-assessable one (your home). This could improve your eligibility situation and the amount of your Age Pension payments so it’s a good idea to let Centrelink know quickly.
Advising Centrelink can be quite a minefield and it’s easy to both over and under report. So we asked our resident expert, Steven Sadler, for his tips on what you must, or should, let Centrelink know. Here’s Steven’s checklist.
Bank accounts
Most people presume Centrelink have consistent access to your accounts or that the banks report balances to them. But Centrelink does not know how much money you have at any given time. They rely on you telling them of any changes. You can apply a bit of common sense though. There is no need to declare that you just spent $200 on dinner, but any permanent increase or decrease in your account balance by $2,000 or more should be declared within 14 days of the change. Conversely even if no big changes more/less then $2000 have occurred, there will generally be a more gentle incline or decline in balance over the course of a year. For this reason, we recommend updating Centrelink on your account balances at least annually but potentially every six months or even three to make sure that you don’t miss out on any pension entitlements or accrue a debt from overpayments.
Superannuation
You don’t have to tell Centrelink about changes in your superannuation balance as Centrelink gets twice yearly updates from most super funds. But this doesn’t apply to Self Managed Super Funds (SMSFs) so SMSF holders do need to keep Centrelink up to date. Also, for everyone with superannuation it could be in your interests to update Centrelink more frequently if your balance has declined significantly. You could be eligible for more Age Pension. This could occur, for instance, If you spend a lot of your super e.g. to pay for a renovation or take a major holiday, or if your investment returns are negative. You are completely within your rights to rely on Centrelink’s six monthly updates when your super returns are high.
Shares
Similar to super, in March and September each year Centrelink updates the share values based on markets at those times. All you have to do is update Centrelink if you buy or sell any shares BUT you can go back and request a recalculation in the event your share value drops dramatically and you want a review.
Investment property
Centrelink updates these values every two years. As with shares, there could be significant downward trends that you may wish to notify Centrelink about. For example if a new sewage plant is announced next door and your property value has taken a hit.
Managed Funds
These tend to work in the same way as bank accounts. The onus is on you to notify Centrelink of any permanent increase or decrease of $2,000 or more.
International travel
If you are travelling overseas it is important to notify Centrelink. They will ask your departure date, which country you are travelling to (if multiple just pick whichever one you are spending the most time in), if you are travelling via a cruise or not (no one has been able to tell us why this is important) and your expected return date. If you have a partner and they are travelling with you, you can update both at once. This article has more information on both temporary and more permanent travel overseas and what you need to do.
Extended domestic travel
On its own there is no need to notify Centrelink. One area where people can trip up is by renting out your house while you are away as you can do so for up to 12 months and not have the house counted as an asset, just the rental income is assessable. So you do need to tell Centrelink about the rental income.
Inheritances
An inheritance will affect your assets and similar to bank accounts you need to keep Centrelink informed. If for instance it is received in the form of cash you just need to update the new bank balance once the money is received. What you do with the money will impact how Centrelink treats it. For instance you could repay the mortgage on your home in which case it won’t affect your Centrelink entitlements. Similarly with paying for a renovation or an overseas holiday. But it will be an asset if used as an investment. Our advisers can help you work through this. You do need to provide updates of all movements from when the money comes in to where it lands, not just the final balance. Often gifting comes up because “Mum left all the money to me but I know she wanted it to go to the grandkids so I’ll divvy it up” which if it isn’t in the will as going to them, it will be counted as a gift and any amount that exceeds to gifting limits will still be counted as an asset. You can read more about the gifting rules here.
Read more detail on the way you can manage inheritances in another of this week’s articles.
Depreciating Assets
Cars, bikes, boats and caravans etc.will most likely depreciate over time. You don’t have to update Centrelink but it’s a good idea to do so. Depending upon the assets, take 5-10% of the value off each year to reflect market value and potentially improve your entitlements.
It is important to keep Centrelink up to date as no one wants to incur a debt that can prove difficult to repay. You also don’t want to be underpaid. If you need help to understand what you do and don’t need to tell Centrelink consider booking an Age Pension Consultation. You can also get help to reduce the impact of some events such as an inheritance on your Age Pension situation with a Maximising Entitlements Consultation.
Have you ever been caught out?
Perhaps you didn’t update Centrelink and they chased you up.
Or maybe you didn’t tell them about money you spent on a renovation and cost yourself some Age Pension payments.
We’d love to hear your experiences.
I notified Centrelink 2 years ago about our sale of an investment property.
I received a reply signifying it was noted, but our Assets statement has still not been updated.
Should I keep notifying Centrelink?
Hi Richard, it is always best to make sure Centrelink have the correct income and asset values listed for you so that you are getting the correct amount of Age Pension. If they have erred and not processed an update correctly you may be eligible for back payments.
I would like to know how Centrelink value an investment property asset. Is it as per rates notice or average value of similar properties
Thanks
Ali
Hi Ali, Centrelink use the rates notice as a guide but as that is based on land value only as opposed to overall property value so they do take into account the value you declared. If they are happy with what is declared and the rates notice then it will be accepted as is but if they have concerns the value has been declared too low then can send out an agent to do a roadside valuation.
I have some inheritance funds I invested in term deposits which have matured and I rolled over. Do I need to regularly update Centrelink? All inheritance $ were reported when I applied for the oension. Do I need to report the minimum income stream amount of $229 per fortnight?
Hi Kim, it is best to update Centrelink on the balances of all of your bank accounts at least once a year so that they have accurate data and can calculate the correct Age Pension for you. The amount you receive from your super pension is not assessable and does not need to be declared.
i sold my home last year as i could no longer afford to make the mortgage payments and am now living with family paying room rental. i now have bank assets from the sale. i checked the centrelink eligibility calculator and i was still elligible for full age pension. i have put into a term deposit account. how does tbe interest effect my pension? Do i need to report this to Centrlink or will they be advised by the ATO ?
Hi Shirley, you should declare to Centrelink that the funds are in a term deposit and provide the most recent renewal certificate as evidence of the balance. Moving forward you only need to let Centrelink know if the balance changes because you either add or withdraw from it. If you continue to just reinvest the same amount then Centrelink do not need an update.
How does Centrelink look at relationships of people age pension age?
I don’t want my retirement plan affected if my partner is considered a dependent.
We are both approaching 60, do not live together, but may need to if this accommodation issue continues.
We have both previously been married and won’t venture that way again.
Both have our own dependents.
He will be claiming age pension, I will have my own income.
I get that young people plan futures together and income test applies. But at AP age, is assessing a marriage like relationship different when we both declare independence, not dependence.
Thanks
Hi Jay, Centrelink determine whether they class you as a single/couple based on 5 key pillars which you can read about HERE.
How does Centrelink assess a Defined Benifit pension
Hi Greg, Centrelink assess Defined Benefits as income based on the gross total minus up to 10% depending on the untaxed portion.
I’ve only updated Centrelink once in almost 10 years. I’ve always assumed that because we are well under the limit for income and assets and receive a full pension, there’s no need. Our savings could fall to $0, they’re not going to increase our pension are they. Similarly why would I tell them if I gifted money – it wouldn’t make any difference to our pension.
Hi Robyn, generally speaking no you don’t need to update Centrelink if you are on a full pension because lower income/assets will not get you any more pension. Where it could become an issue is if you were to come into some money like an inheritance or lotto win then Centrelink may query why your assets are not higher then you declare because they will add that new amount on top of the older, higher balance.
Very helpful.
My husband is on a part pension only as I am 8 years younger and still running our business. His input in the business is only about 5 hours a week now, which we have told Centrelink about. Our income is up and down like a yoyo from one week to the next though. Is it ok if we just leave it until the end of the financial year to reconcile with Centrelink? We are putting the money in an account in case there is an overpayment we need to pay back. Or are there other consequences we aren’t thinking of?
Hi Christine, well done on a great approach by putting the money aside to allow for potential back-pay. What you are suggesting is perfectly fine with Centrelink, the main concern is the potential to have to pay back funds but you are already prepared for that.
The only comment I would like to submit is to praise your organisation for its advice and guidance through the mine field of Centrelink confusion.
My husband and I have just put in our applications after having worked our entire lives to arrive at a point financially where we need assistance.
Your organisation is such a guiding force I only wish we could afford to have had you handle our affairs from the start. In the meantime I thank you for your informative emails which give us both some idea about this new frontier we have now entered. Many, many thanks.
Hi Amber, thank you for taking the time to provide your feedback and we’re glad to have been of assistance. It may be late for yourselves but hopefully you can help others by spreading the word.
I’ve just been to Centre link to apply for the aged pension, I’ve worked full-time my entire life, then some. I’ve been told my eligibility is unlikely due to my savings. So confused do I spend my life savings just to get the pension, I find it very hard to get a straight answer.
Hi Yvonne, I’m sorry to hear you are struggling to get clarity. We offer consultations for exactly this purpose to help people understand the long term pros/cons of keeping your money invested vs spending a little and then factoring in Age Pension. CLICK HERE to make a booking and we’ll be happy to do the math with you so you can decide what is best for you.
I recently rented my caravan out through Camplify and managed to get a significant rental period. The result was as that I received a payment up front for $7900 and will receive the final payment of $7900 in 5 months time.
I sent Centrelink the information asking how they wanted the income reported ( possibly regretting that now!). I t seemed a new issue for them and at first they didn’t seem to really know how to report it.
In the end I had to submit a Profit & Loss Statement associated with the caravan. I have done this and are still waiting on their response. The submission was almost two weeks ago.
Regards
Rob
I thought you only had to tell Centrelink if you left th country for more than six weeks.
Hi Lesley, Centrelink request that you notify them of any/all international travel however there is no impact to your pension if the travel is less than 6 weeks.
Hi
Are the requirements the same if you only receive the CHSC
Thank you
Hi Karen, yes Centrelink expect the same of anyone who receives any benefit from them.
We recently went to Bali for 6 nights (not recommended these days, by the way – noise, traffic & hustle everywhere) and were surprised to get a call from Centrelink a week or two later asking us about it.
We had no idea of the need to advise them and it seems Border Security/Immigration reported our movements.
We still received wages from our small business during this time and reported the income as normal however it seems this confused the Centrelink system and resulted in an over-payment of Age Pension. Even though I have a Business Analyst/computing background I still cannot fully understand the logic of what went wrong, despite several calls from Centrelink.
Naturally I apologised for my lack of knowledge and said I understood if they deducted the over-paid $100 or so from the next payment.
“Sorry, not possible” was the reply. “We have to send you a letter of demand, which you can object to if you wish, then you can pay back the money, in installments if you wish.”
I couldn’t believe the inefficiency – I was on a recording and was happy to authorise the deduction but it was not allowed. Instead a demand letter had to be mailed out to me and then I had to make payment. What an incredible waste of resources!
And this was then all repeated for my wife.
If a small business was run like this, it would probably go broke. The guys at Centrelink do an unenviable job – I feel sorry for them – but their workload is evidently made worse by management systems which are archaic and inefficient.
One lesson I’ve learnt is to report your overseas travel. However, I’m not sure if that would resolve the issue entirely as, if I’ve understood it correctly, if you receive pay when away, such as holiday pay, they will have overpaid you (because they assume you are not paid when away?) and you will have to pay some back, using this convoluted process. Perhaps the second lesson is to not take your holiday pay!
What a mess! I wonder how much tax-payers money would be saved with a Universal Pension?
The $2,000 limit has been in force for years so why is it not going up with inflation or is this just another way to keep staff employed at centerlink.
I recently received a property separation settlement of $290000. we are in the process of getting divorced. I used the money to buy a house to live in, furniture and a car. I’ve also installed solar panels, a split system air con and I’m having a patio built. so all the money has been used. I’m on a full pension. Did I have to declare the money before I spent it. I also had to pay $30000 tax on the money which I wasn’t expecting.
Hi Sybil, technically yes you should have notified Centrelink when you received the funds initially as it may have put you over the threshold for full pension. You would then have updated them as you spent the money and your assets reduced back down. If Centrelink find out about the payment in future then it may be an issue but given you have spent the money you are now eligible for the full pension again so there is no immediate concern.
last May I receive? income for a short term contract and went to Centrelink to report the income, less expenses. I was told that I didn’t need to report that straightaway and they would use my tax return to assess my income. I have not yet submitted a tax return, and I am concerned that there will be back dating and a reduction of my aged pension.
can you let me know if I should report income to Centrelink by a certain time?
Hi Edie, reporting income after it has been received does run the risk of being overpaid and having to pay back a debt so we would recommend updating Centrelink as soon as the funds are received/you have a contract or pay slip to show as evidence of the amount.
thankyou, Steven, that’s why I am worried. I prepared an income and expenses sheet as I have done every year, in May, and the staff at Centrelink refused to take it. on the grounds that my tax return would give them the info they want at the end of the year. shall I try and submit that document online again?
Hi Edie, yes if the staff in branch are not being helpful I would definitely lodge it via your online account.
reading your emails and attachments are great information but as i will probably never get a pension(presently 71years old), i had a 2year cat fight with central circus and only after initiating a ministerial complaint did i get my medical health card, do i need to reapply for that every 2 years, as stated in 1 article they get auto updates on tax and super and share holdings is this correct or what and if we travel overseas do we need to advise them when this happens as we do not get a pension(unfortunately we were stupid enough to diversify investments in super, shares and a rental house , yes and studied many degrees and paid max tax most of my working life )
Hi Keith, thankfully you don’t need to continually re-apply for the CSHC. Once you are on it Centrelink presume you remain eligible and send out a new card each year. The onus is on you to notify them if you no longer are eligible due to exceeding the income threshold.
g’day
do I need to notify Centrelink when my superannuation payment is transferred to my bank. it’s over the $2000 a month?
Hi Graeme, thankfully no you do not need to do this. Centrelink do not assess superannuation pensions as income, they are treated as assets like bank accounts.
Understood, but I think the question is about the increase in the bank account balance by $2000 each month. Is that not an increase in one asset (bank account balance) and a decrease in another (estimated super balance).
Even though the source of the increased bank balance is a super pension stream, is it not still a reportable asset?
Hi Steven, two Stevens can’t make a wrong! Thank you for clarifying the angle I may have missed. Technically speaking yes you are correct about the bank account increasing by a large enough amount that it should be declared however I imagine the increase is rather temporary. That money will begin being spent and so by and by your balance each month remains about the same. Money comes in but then goes out again before coming back in so unless you are taking money from super payments to invest in a savings account or some other asset that continues to grow in value then no I would not be updating Centrelink on my bank account balance each month.
My husband passed away over one year ago and Centrelink sent me an income/assets test form about 3 months ago. I filled this in truthfully and now I have been sent another one. Is this normal?
Hi Jan, that is not normal for Centrelink to send another one so soon after. You can likely ignore it but I’d recommend calling them on 132 300 to make sure in case something went wrong with your previous submission.
I can see how this applies to those who are receiving a pension payment, but is there also a requirement for us to report changes if we don’t qualify for a pension payment but do have the Low Income Health Care Card?
Hi Mark, as far as we are aware the only update you need to give Centrelink when on either the Low Income Health Care Card (or the Commonwealth Seniors Health Card for that matter) is if your income exceeds the allowable threshold. Otherwise there is no need to advise Centrelink of any other changes in income/asset values.
I have a cshc, 70 yrs old, still work 22 hrs a week and draw down minimal pension. I haven’t yet applied for a an aged pension
When I do to apply will I have to justify what I have spent in the last 5 years? What kind of records do I need to keep?
Hi Heather, thankfully that won’t be necessary because Centrelink’s focus for the Age Pension is on your current situation as of the day you lodge the claim and then any changes moving forward. They look back at the previous financial year if you have a private company and/or trust or a SMSF but only the most recent financial year. The last 5 years are only relevant if you have given any gifts during that time in which case you just need to know and declare the value of the gift and when it was given. No documents required.
As I am not on Age Pension but am self funded retiree. Therefore, I have got Commonwealth Seniors Health Card.
Please advise do’s and don’ts for this entitlement is based purely on income.
Hi Naresh, for the CSHC you only have to update Centrelink if your income exceeds the allowable amount. No other increases or decreases in income or assets need to be declared.
Hi, my wife and I have a share portfolio, some cash in the bank, and some money in Super, we both receive a part pension. If we sell some shares and put the funds into our Super, would this affect our pension? We do not draw money from the Super funds.
Hi David, thanks for reaching out! Centrelink assess superannuation and shares the same way so no there would not be a change in your pension if you were to do this. You should still tell Centrelink and provide sales receipts so they can update your profile and remove the shares but by and by you’ll still have the same value of assets, just spread differently.
Hi, I am confused about the reporting in assets. I understood if anything changed by more than $1000, reporting was required. Is this not the case?
My wife and I now receive a very small aged pension payment.
However, each month our super decreases and our bank increases (before reducing again) as we receive our super pension payment and withdraw an amount to pay our credit card balance – which we use for all our expenses. It can amount to over $5k per month reduction in our super balance.
It seems it is in our own best interests to report the reduction as it will have a positive effect – increasing our pension. Maybe minor, but it is ours to claim, and if it went in the other direction Centrelink would no doubt reduce the pension, and probably charge interest if we failed to advise them.
However, I uploaded an update to our super balance almost a month ago, and Centrelink has not updated the information and now advises no further updates are possible until it does! What can I do?
Hi Mike, thanks for sharing your experience. You can potentially expedite the update by calling Centrelink on 132 300. Often it locks you out simply because the system cannot automatically process the changes and a human being needs to do it. By calling up you will likely get someone who can go in and process it on the spot for you.
How does a a defence force pension (DFRDB) affect the age pension?
Hi Stephen, DFRDBs are assessed as income based on the gross amount minus up to 10% depending on your tax free component.
Just letting you know that if you update Centrelink on your bank account holdings and they have not changed by the required amount, they won’t change your payment. So if your bank account balance has decreased by less than $1000, they won’t pay you any more in pension.
I am quoting now from the back of a letter received from Centrelink in September 2024.
It says that if you are being paid under the Assets Test, you must notify them within 14 days if your assets increase in value by $1000. If you are subject to the Income Test, the figure is $2000.
You have not touched on foreign assets and income. Are foreign income and Assets part of our total assets and income to test eligibility of pension.
Hi Vimlesh, apologies for not specifying it but yes foreign income and assets are assessable the same as Australian based ones and you need to update Centrelink all the same.
Re Aged Pension.
We will be overseas 47 days.
I advised Centrelink on 28th Oct 2024
You can be away for 42 days without any effect.
You can be away for up to 13 weeks without notifying and it does not affect
your pension, IT DOES however affect your rebates for power etc. The amount you lose
is governed by how many days you were away more than 42.
Centrelink are advised by immigration.
But please, use this as a guide and make sure you do your own due diligence.
Hi just read on reporting to c/link haven’t changed anything in 3 years I’m single on age pension own my house no children nothing has changed am i in trouble? ?
Hi Chris, if you receive the full Age Pension ($1,144 per fortnight for singles) then you should be fine but if you are on less then that then you may be eligible for more so I’d recommend contacting Centrelink to clarify what figures they have on file for you and if an update is worthwhile.
Hi if i sell shares and put it all towards a renovation is that ok
Hi Chris, that is fine, you should notify Centrelink though and provide receipts from the sale of the shares and then the renovations. That was Centrelink can update your assets and recalculate your pension.
hi, do i have to provide receipts for home renovations?
Hi Mike, we recommend always proactively providing evidence of large changes to your balances to avoid unnecessary delays. There’s no way of knowing when changes they will ask for further documents for vs what they are happy to take a face value so to avoid waiting weeks just to then get a request for documents, we recommend providing the documents up front when you process the change to ensure it is actioned without delay.
I have found that superannuation in an account based pension account is updated automatically every 6 months as you say, but any superannuation in an accumulation account is treated as a managed fund by Centrelink so the obligation is on you to advise them if the balance changes by more that $2000. Which it can do frequently during the year.
Is donating money to a charity ie RSPCA, Salvos etc… classified as gifting?
Are donations to charities to be advised to Centrelink? If so above what amounts?
Hi Susan, technically yes donations are counted as gifting and have the same rules applied as any other gift despite the goodwill and intentions.
Hi, my wife is on a part pension and I retire in February I have stopped working and have zero income, we have money in bank accounts attracting interest every month, this was reported to Centrelink some months ago and I presume is deemed already so when I receive monthly interest which is over $2,000 per month is it necessary to declare that every month or does that come under deeming already? I’m confused. Thanks
Hi Ron, you are correct that the interest generated by bank accounts is covered by deeming so you do not need to declare it.
Thank you so much Steven
Hello,
In retirement, we try to save money for rainy days as well as for future bills, e.g., energy cost and strata fee. Hence, our account balance increases. When the time is due to pay for the bills, the balance will reduce. With the account balance fluctuations could be $2000 or more, should we report this to Centrelink? Please advise.
Thank you.
Hi Charles, the best thing to do is take a common sense approach. Yes your balance may increase by +$2K but will it be permanent or only for a few weeks until bills come out and it reduces down again.
Thank you, Steven. It will be only for a few weeks.
Hi,
I’m 75 my wife is 64, most of our super is in my wifes name. I have super of approx $140,00 and have the government % put in my bank account as a lump sum in June. My wife is on a disability pension & I receive a full pension.My question is do I have to declare it to centrelink every time as it sometimes takes a while (sometimes 6 months or longer) to use it?
Hi Sir/Ma’am, I’d recommend you do update Centrelink but not just on the lump sum from super, use it as an opportunity to update all of your assets like bank accounts, cars/bikes/boats, contents etc.
Hi,
I am planning to move overseas permanently, will I loose my pension after selling the house here? The value of the house is app 1Ml, but I have to buy another house overseas.
Will I loose the entire pension after selling?
Hi Maria, your situation would involve a number of factors to be considered regarding your pension. Technically no, selling your house with the intent to live overseas would NOT impact your pension as the proceeds from the sale would remain exempt. Having said that moving overseas can have a big impact on your pension that you may mistake for being from the sale of your home. I’d recommend booking a consultation (HERE) to go over it all and be clear.