The second money mistake is to not know the details on timing – this can have serious consequences if you get it wrong.
The Age Pension used to be much simpler, including the qualification age of 65 for those no longer working.
It’s currently 66.5 and due to increase to 67 on July 1, 2023.
What many retirees and those planning retirement don’t realise is that you don’t have to wait until the official pension age to apply.
Centrelink rules allow you to lodge your application 13 weeks ahead of time. It used to be that the lodgement of an intention to claim was enough for backdating eventual income. But this provision has been removed. Pensions are now backdated to lodgement of a completed claim.
And therein lies the catch.
You can apply for an Age Pension online provided you have a MyGov and/or Centrelink account. If not, you will need to set them up and may need to go through an identity check before starting the application process.
Separately, you can use the Retirement Essential service, whereupon we become your nominee and manage the claims process on your behalf, including applying, following up and any challenges as needed. This application could also be on your partner’s behalf or a combined claim.
We strongly advise all our members to start this process as early as they are allowed to (i.e. 13 weeks before age 66.5). Every week’s delay on a full single Age Pension is nearly $500 out of pocket, for couples, it’s (combined) more than $700.
How Laurie lost $110,000
Laurie came to us about a year ago. He’d been retired since 2017, drawing down his super, believing he needed to spend that first.
He’d never bothered checking his eligibility as he assumed he was above both the income and assets threshold.
He was wrong.
And sadly, had been wrong for four years. We calculated that Lawrie and his wife Sandra had missed out on nearly four years of a part pension of $27,000 per annum, not to mention the savings from a Pension Concession Card (PCC) on energy, utilities, rates, and PBS prescriptions.
Laurie and Sandra were quite shocked at the amount of money they had foregone but did allow us to quickly process his application and ensure he wouldn’t miss out going forward.
Do you know the basic rules?
Or is it time to check your eligibility?