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.
- Retirement Forecasting (Compare two scenarios of how your assets and income will look during your retirement journey).
- Understanding more about super (Assess the options to help make your super work better for you).
- Maximising your entitlements (Assess any changes you might be able to make to maximise your Centrelink entitlements)
- Understand impacts of your home mortgage (look at the benefits of repaying or maintaining your mortgage in retirement)
We are in the process of applying for a part pension for me and a CSHC for my husband. Can you clarify how my husbands income is assessed? Is it the gross cash component? Or does it include super by employer and tool of trade vehicle?
Hi Marcia, thank you for seeking our assistance! You actually shouldn’t be trying to apply for the CSHC and the Age Pension (AP) at the same time. Centrelink assess you as a couple and so as a couple you are either entitled to a part Age Pension or a CSHC. You can’t have one person getting a pension and the other getting a CSHC. If your partner is too young for the Age Pension then they are also too young for CSHC and if they are earning too much income/have too much in assets for the AP then that means that you do too. I’d suggest calling Centrelink on 132 300 to withdraw whichever claim (likely the CSHC) is not applicable as it will cause them delays and ultimately they will contact you to clarify which one is applicable if you continue to persist with both.
Thanks so much for clarifying for us. We appreciate it so much.
My husband and l are both retired.
My super is in pension phase and my husband’s is in accumulation
I am on a part age pension and my husband is eligible next year to apply.
If we take money from my husbands super is this classed as income
Hi Barbara, thank you for your comment! No money taken out of your husband’s accumulation account is not classed as income but it will be considered an asset so it is best to advise Centrelink of the amount withdrawn and show bank statements to clarify the new balance of your account(s).
Can you salary sacrifice and receive the pension.
Hi Wayne, thank you for your question! Yes you can salary sacrifice and receive the pension so long as your gross income before the salary sacrifice is under the applicable threshold.
hi if I sell a motor vehicle for $42,000
and put it in super. would that affect my pension payment. the vehicle will be replaced but with a much smaller and cheaper vehicle.
thanks for any advice
Hi Bryan, there are a few variables to potential Age Pension benefit implications when making changes to assets or income, due to how you are currently being assessed and overall circumstances. Therefore, I would suggest scheduling an Entitlements Consultation to discuss your situation to evaluate if there is likely an impact on your Age Pension entitlements. Alternatively, you could use our Free Entitlements Calculator here. Hope this helps, Megan
If my wage is $100000 per year and I put the $27500 into Super then my taxable gross income is $72500. Because my partner is over 67 and no income and is applying for a part pension, would she put down that my income is $72500 on the application?
Hi Malcolm, concessional contributions into superannuation may help to reduce your taxable income however, the income test for Age Pension benefits is assessed on your gross income, not taxable income. Therefore, you are required to report your gross income. Hope this help, Thanks, Megan
We have recently sold our apartment and bought another property leaving about $550,000 left over. We plan to invest the bulk of this surplus in our self-managed super fund. What notifications to Centrelink are necessary and when should they occur?
Hi Jim, you will need to update Centrelink within 14 days of all this occurring. Providing them with your new address, copy of sale and purchase statement from your solicitor if you have one and a bank statement showing the balance in your bank account. Once the funds are contributed into your superfund, you will also need to provide them with bank statements showing the transactions from your personal account into the superfund. Basically providing them with paper trail of these funds is key. Hope this helps. Thanks, Megan
Hi I have a One path pension and am receiving a monthly deposit from this. I only have $170,000 in this fund.
I want to use some of the money to help my daughter buy a house and I want to take out $20000 for myself which will only leave about $100K.
Can I take out this money and if so do I pay tax or how can I work it?
Hi Karen and thank you for your comment. The potential impact on tax and or Age Pension entitlements by withdrawing money from your Onepath Pension would depend on your overall circumstances and the structure of this account. To give you guidance on this, we would need to discuss in more detail with you within our General Advice consultations. In this consultation we could also go through the potential assessment of you financially assisting your daughter as either a loan or gift. You can book these consultations here. We look forward to meeting with you, Megan.
My wife is quite younger than myself (20years) and therefore when i retire she will still be working. our assets are under the limit to receive full pension, but what about her income?
She currently earns approx $60,000pa Gross. would i be correct in stating that because of her income , I would not be able to receive a pension payment?
Hi Steve, great name by the way! You are correct that your partner’s salary will be taken into account and impact how much pension you can earn however the maximum amount a couple can earn is $95K per year so you should still be eligible for a reduced pension.