Entitlements Learning QANDA

Life happens. Divorce, floods, leaving work are all triggers for changes in your financial situation. And your entitlements. Most of us benefit from learning from those who have gone before in all sorts of life changing events. Today we share some of the typical questions our team receives on a daily basis. Most of these questions are fairly straight forward and can be quickly answered. But for the person who asked the question, the ramifications of knowing these rules can be important, particularly when it comes to simplifying your dealings with Centrelink. Here’s how our team has clarified the situation for some of our members in the past month.

Paul asks:

What happened to our Age Pension increase?

Hi. We have just checked our part Age Pension payment for October, but despite the 20 September increases to the Age Pension, we don’t seem to have received anything extra. Why would this be the case?

Steven replies:

Hi Paul, thanks for seeking our help! Generally speaking Centrelink do not err in the processing of increases. This leads us to believe that there may have been another change in your financial situation that mitigated the increase. This might be an increase in your superannuation balance or extra income. The best thing to do is call Centrelink on 132 300 to clarify what figures they are using to calculate your pension and if there have been any recent updates to these amounts.

Debbie asks:

How soon can I apply?

l was born in 1963 and l just turned 60 in August. Can you please let me know when I can get the Age Pension and what age should l start to apply, as I’m not very sure of the rules.

Steven replies: 

Hi Debbie, great work taking in an interest in this now so you can plan ahead! You will be eligible to lodge your claim for Age Pension 13 weeks prior to turning 67, so there are still a few years to go. In the interim you can get an idea as to how much pension you might receive by using our free online calculator HERE. The good news is that you have about seven years to maximise your super and savings before you apply.

Chris asks:

Is an insurance payout assessed under the assets test?

In the event of a total loss of my primary residence due to fire or flood, does the insurance pay out of, say, $1,100,000 have to be declared in the income and assets test? Or is it exempt whilst construction of a new home is carried out?

Steven replies: 

Hi Chris, hopefully this situation never arises for you but it is good to know just in case! It is best that you declare the amount received to Centrelink and then also clarify how much will be used for the construction so they are aware of this as well. The amount will be exempt from asset testing in this scenario, as long as you do put the money toward a new home. If you kept the funds to live off and moved in with someone else then yes, this payout would become assessable.

Mim asks:

Where’s my energy supplement?

What happened to the proposed $500 energy supplement promised by the Federal Government?

Steven replies: 

Hi Mim, we’ve actually covered this in a previous article which explains that the energy supplements are being credited directly into your account with your energy provider, so you will receive a reduced bill from them. Unlike previous supplements, it will not be remitted as a cash payment into your bank account.

David asks:

How will Centrelink view my divorce settlement?

We are going through a separation and once my partner has refinanced I will receive $200,000. Do I have to spend all this on a home for it not to be counted as an asset?

Steven replies: 

Hi David, sorry to hear of your separation. You are correct that the only way to have this money exempt from assessment would be if you were to spend it all on buying or building a new home for you to live in (i.e. not an investment property).

Glenna asks:

What will happen to my part Age Pension when I stop work?

I have superannuation, car and cash to the value of $400,000. I work 15 hours a week and currently receive a part-Age Pension. I am 73 and think I might stop working soon. Will my pension payment stay at the same reduced amount, or will it increase?

Hi Glenna, thank you for reaching out for further assistance. It is hard to know for certain without understanding your full situation, but based upon what you have said it is likely that Centrelink are using your income to determine the amount of Age Pension you receive. As such, if you retire then your pension payments would be likely to increase. To get more certainty to make a more informed decision you can use our free, online calculator HERE to run the numbers and check your specific entitlement.

What about you?

Do you have any urgent questions about your entitlements or super?

You can check your own Age Pension and Commonwealth Seniors Health Card entitlements using our Age Pension Entitlements Calculator at any time – it’s always up to date.

If you want more tailored guidance, then Retirement Essentials has a range of consultations which will enable you to undertake a guided review of your retirement income possibilities.