What went wrong?
Five reasons Age Pension applications can fail
Being entitled to an Age Pension doesn’t mean you’ll automatically receive your fortnightly payments from Day One of your retirement.
Being entitled doesn’t even mean your application will be successful. There are quite a few hurdles to overcome if you are planning, or in the midst of, an application. Today Guru Steven Sadler (our very knowledgeable Head of Customer Services) steps us through five reasons Age Pension applications can fail – and how to avoid them.
Don’t double declare your super and your income stream
Centrelink asset and income tests can seem complex. But one hard and fast rule is that you do need to declare (under assets) your superannuation account balance. Centrelink will then deem the amount this balance earns (see current deeming rates here ). What you don’t have to do is to declare the income you drawdown from your super, in the form of an Account-Based Pension or other type of income stream. Yes, this is income, but as Centrelink has already counted it (by deeming an income on your assets), it doesn’t do this twice. Many applicants are surprised to get a knockback due to failing the income test. Some shouldn’t fail it, but they have incorrectly declared income already taken into account.
No longer employed
You may have started your planning early and at that time you were still working and earning a wage or salary. When you are ready to apply for an Age Pension because you are retiring, it’s best to apply after you have stopped working. If not, it is likely your income could prevent you receiving your full entitlements. There is no point in saying, oh, but I won’t be earning $80,000 a year from next week onwards. If that represents your earnings today, that is the amount on which your assessment will be made. Which leads us to a more general point – if you’ve had a couple of goes at filling in a Centrelink application for the Age Pension, take the time to go back and check that each and every detail is current. Getting a knockback and needing to appeal or reapply is an awful lot of effort!
Incorrect or incomplete documents
Centrelink requires legally valid documents to prove your ownership of the assets you declare. Bank account transaction lists are not necessarily legally valid – normally you are required to share a bank statement instead. The difference is that the former often do not have your identifying detail displayed, but bank statements do have all detail required and are thus considered legally valid. Some banks are easier to deal with than others, but you will need to comply with the request for either an ‘out-of-cycle’ or ‘interim’ statement as part of your application.
Yes, you are receiving a pension
A specific error common to many applicants who have a Self-Managed Super Fund (SMSF) is the belief that they are not receiving a pension. That’s understandable as they are obviously not receiving an Age Pension, but a high proportion of SMSF members are currently withdrawing regular payments from their super in the form of an Account-Based Pension. These amounts need to be verified, normally by supplying a member statement in the form of an SA330. Assuming that you are definitely not receiving any form of pension is often a gateway to a mistake.
Out of sight doesn’t mean it doesn’t exist
Much of the detail of our commercial lives can fade from view as we transition to retirement. This often occurs when it comes to private companies or private trusts. We simply forget these entities and so can fail to declare them when we are dealing with a government department or agency. This doesn’t work when it comes to an Age Pension application; you need to declare all company and trust earnings. It may be that you haven’t filed a tax return on these dormant entitles for a year or two or more. Until you’ve done so, and have a Notice of Assessment, there is little point in pushing ahead with an application.
Should you appeal or reapply?
Just because you have had your application refused does not mean that you are ineligible. You may be eligible but have not successfully proven so.
If you get a knockback you have up to 13 weeks to appeal it. But only do so if you know you are actually eligible.
If you have supplied incorrect information, you can always relodge an application as there is no point in appealing an application that is never going to be eligible. But if you do reapply, your benefits will only be dated back to the most recent application date, not the original one.
Need some help to navigate your application – or lack of success so far? Steven and his team are experts at knowing the rules and how they apply in individual circumstances. Perhaps you, too, could benefit from one of Retirement Essentials individually tailored consultations to help with an initial application. Or you might want to consider to consider ways your wider financial situation can be leveraged to maximise your entitlements.
We were in the age pension, Then Joe Hockey changed the rules for taper.
Since then we have not been able to claim the age pension.
However,
Now that we are spending money on our home updating, we will be below the asset threshold again by next month.
I was originally informed that we would continue to keep our age pension card and the pension would be re-instated when we are below the maximum asset level again.
Centrelink now say we have to go through the whole hoops of applying again, although nothing has changed except the assets we have.
Is this correct? Meaning I have to find proof of arriving in Australia in the 1950s again.
As well as all the other paperwork.
PS: attempting to contact centrelink by phone is a third-world issue, trying to cancel or change an appointment with them is impossible by phone.
Thank you,
Hi Martin, thank you for sharing your experience with us! What Centrelink have told you is correct, you do need to lodge a new Age Pension claim, however you will not need to provide ALL of the same supporting documents. Things like proof of citizenship only need to be verified once so that was already done when you claimed previously. This new claim you need to lodge will be a little easier to get approved. We’d be happy to help guide and support you through the new claim if you would like so I will send you an email separate to this comment with a breakdown of our services and how we can be of assistance.
if Martin went to a Centrelink senior centre counter they will make an appointment for you
Contacting Centrelink from overseas is impossible they dont acknowledge emails or letters and phone calls are a long wait with no result. They got away with robo debt but now use people to do the same.
The way Centrelink treat retired Aussies is disgraceful, in any other line of work you wouldn’t have a job if you worked the same.
Very good feedback
I am an Australian resident (British Citizen). I will not be earning from end June 2023. I have 8,000 in Super and 20,000 in savings. I have no home in Australia. I have no other assets in Australia. I own a home (jointly with my wife) in Italy but have no other assets there. My wife has a UN pension. I sometimes leave Australia to go to Italy for up to 3 months. I have not left Australia for over 2 years. Am I eligible for a pension?
Hi Kieron, thank you for sharing your situation! There is a bit to unpack here and the comments section is not the best forum to do so. So that we can confidentially discuss your situation and explain what entitlements you may be eligible for it would be best to book a consultation with one of our specialists. CLICK HERE to learn more.
Kieron
Frankly, the idea that you even consider asking for an Australian pension is gobsmacking! Those of us who are self-funded retirees here, are proud not to receive a pension, even though we worked hard all our lives. A pension is a privilege not a right. Shame on you.
it’s a right not a privilige.
I’ve been living in the USA since 1986. I have a social security income stream from the USA, approx. 1200 AUD per month. I’m repatriating to Australia and filed a claim for age pension in early March 2023.
No decision reached from centerlink to date. Centerlink keep sending the same message ” in process you have no tasks to complete”.
please advise
GJP
Hi Gregory, welcome back home! On top of the regular income/asset assessment that all claims go through, your claim will need to be reviewed by Centrelink’s International Services team and we have been told that they are 8 weeks or more behind in their work. Sorry to be the bearer of bad news but what Centrelink are saying is likely true, your claim is sitting in the queue waiting to be reviewed.
For those who have little to no savings and no superannuation, they need to work to the last day before they get their age pension to actually stop working.
Does that mean they will never be eligible for the age pension?
Hi David, thanks for joining the conversation! If someone has no savings or superannuation then the only barrier to them receiving the Age Pension would be if their income was in excess of the allowable threshold. If their income was this high then they’d have to decide whether the wish to continue working and have more money in their back pocket or retire/reduce their hours to get Age Pension payments instead.
Hi, could you please tell me what the limit of your superannuation amount can be before you are eligible for a pension
Thank you
Hi Marguerite, thank you for seeking our guidance. The limit is not specific to superannuation, it applies to all assets and depends on whether or not you have a partner as well as whether you own your primary residence or not (CLICK HERE for the figures). If Super is your concern then you may wish to book one of our Understanding More About Super consultation with one of our specialists who can review your options and the pros/cons of each.
Hello, i am requesting information regarding the Age pension, i have applied but keep getting barriers put up by Centrelink. i would appreciate guidance. In the presentation of my request to Centrelink.
Hi Ronald, thank you for seeking our guidance! I’m sorry to hear of the barriers you are encountering with Centrelink. Given you do have a claim lodged already starting a new one with us now would not be ideal, instead please CLICK HERE to book a consultation. This way we can have a confidential discussion to understand your situation and clarify the best next steps for you.
After we sold our residential house last year , I recently purchased a house smaller in size and lower in value .and that will result to have around $890 k left in my saving plus my super $230k and plus my wife super.
I noticed from my limited knowledge that amount of money would let us not Eligible for Age pension for 3-5 years.
Thinking to generate more income from my super by boasting it with $330 k before the end of current financial year hopping rules changes in few years time.and I don’t like the idea of purchasing annuity !!
Hi Hani, thank you for sharing your perspective! Based on the figures you have mentioned you are right that you will exceed the asset threshold and not be able to get an Age Pension just yet. As you said though, that doesn’t mean you can’t look at proactive steps to make your money work harder for you! If you are interested in finding out more we do offer Maximising Your Entitlements consultations to guide you through the options available and support you with the pros/cons of each. If you would like to have a chat CLICK HERE.
We are considering downsizing as well in the next couple of years – but are considering buying a smaller more suitable house nearer to centre of town and therefore would be purchasing a smaller home worth more than sales price of our currently becoming more unsuitable home – my theory is it reduces assets for assets test and assets for income test therefore more pension entitlement – any faults in this theory/ is my logic correct/incorrect? Our estimated joint super /bank balance will be in the vicinity of 450k- 500k by then . Current market values mean we will need to spend extra 100k-150k to purchase new more suitable property
Hi Rod, thank you for sharing! Your logic is correct in that your assets will be reduced which does lead to a higher amount of Age Pension however spending money to get a higher Age Pension may not be the best strategy to give you the best overall retirement income. I strongly encourage you to book a Maximising My Entitlements consultation so our advisers can guide you through each of your options and the pros/cons of each so that you can then make the best decision for yourself. If you would like to learn more, CLICK HERE.
I am 65 born 1958
What date should I consult you to assist my Centrelink requirements
Hi Chris, good on you for planning ahead! You will be eligible to apply for the Age Pension 13 weeks prior to turning 67 so that is when we recommend you come to us for help preparing your claim. In the meantime though there are still things you may wish to consider doing to improve your retirement income overall. I recommend you book one of our Maximising Your Entitlements consultations as we can help you understand how long the money you already have will last combined with the Age Pension as well as the options you have to potentially improve upon your current position. If this is something you are interested in, CLICK HERE to make a booking.
Thank you for this article. I am waiting to apply for my age pension (Nov 2023). You said in one of your points that it’s best to apply after you have stopped working. I thought Centrelink allows pensioner to work and hence the “work bonus” scheme. Could you please elaborate? Jen
Hi Jen, thanks for raising your concern! You can still apply for the Age Pension whilst working so long as your gross employment income + income from other sources (rental income, foreign pensions, income deemed from assets etc.) is under the applicable threshold. The issue we were writing about in this article is people who’s income exceeds the threshold but they apply anyway because they will be retired by the time the claim is approved and think this means it’s okay. Centrelink assess Age Pension claims based on your situation on the day your claim was lodged though so you need to be under on from that day onward.
Hello. Is it a requirement to live in Australia in the two years immediately before applying for the aged pensions AND/OR the two years after becoming eligible for it?
Hi John, thanks for bringing up a tricky rule that can catch people out! Generally speaking the answer is yes but it works slightly differently to how you have phrased it. If you most recently began living in Australia in the 2 years prior to lodging your Age Pension claim, Centrelink require you to remain in Australia for 2 years from the day you arrived (not the day you got the Age Pension). If you leave Australia prior to serving the 2 year waiting period then your pension will likely be cancelled and you will need to apply again when you return and also start your 2 year waiting period again also.
Hi Steven
My uncle is an Australian citizen who has been living in Cambodia for more than 10 years and is well over 67 years old with very little assets or income. On his return to Australia does he have to wait 2 years before he can apply for an Age pension? BTW, he intends to reside permanently in Australia on his return. Unfortunately, I have not been able to get through to Centrelink on this matter and can’t find any relevant information online. Any help from you would be much appreciated,
Hi Alan, this is a great question that easy to solve on your own! The 2 year waiting period only applies if you intend to return to Australia, apply for the Age Pension, then leave Australia post-approval. In that situation yes you have to remain living here for 2 years before leaving. For your uncle though as he intends to remain living in Australia then this rule doesn’t come in to effect.
Hi,
My partner and I are Australian, but if we lived in/moved to Italy for a while would we still be eligible for an Aus pension?
Cheers.
Hi Trevor, thank you for contributing! Generally speaking yes you would be but as always there are a few ifs, buts and maybes. If you want to talk about it in details because this is something you plan to do then it would be best to book a consultation so we can confidentially discuss your specific situation and how Centrelink will assess you. To make a booking, CLICK HERE.
Hi John
I really don’t understand how the ‘work bonus ‘ works while on the aged pension. I have been doing some Casual work and I notice the bonus decreases each fortnight.
Does this bonus reinstate to a new amount from July 1. If so what is the amount
Hi Julie, thank you for sharing your uncertainty. We have written about the work bonus previously, CLICK HERE to learn more about it.
Generally regarding the Age Pension:
I find the elephant in the room is how couples receive a reduced pension compared to two single pensions. As the government hasn’t reduced taxing either person when they were receiving taxable incomes through out their working lives. The idea that 2 can live with less costs than a single individual also assumes that a person actually doesn’t have advantage of sharing living costs with another one (or more) on a singles pension, under the same roof.
Also (within limits) those who are “home owers” with outstanding mortgages can be at exceptional disadvantage to those who rent, with no assistance available whatso ever.
And with the rental situation as it is. It’s not as simple as selling out with a loss, but finding rental accommadation. Reading the previous comments it very apparent the government considers facilitating the process for eligible citizens to receive their entitlements a very low priority.
Is annuity principal plus earnings on principal the basis of earnings
Hi Ralph, thanks for seeking clarity from us! Annuities are tricky as there are different types and some are assessed differently to others. Generally speaking though Centrelink assess them as an asset based on the total balance and then apply the deeming rate to the balance to determine the income it generates. CLICK HERE to learn more about deeming.
Hello, your news letters are a great source of information thanks so much for sharing.
I am a little confused by mistake #1 and mistake #4. Mistake #1 is, don’t declare income from an Account-Based pension and mistake #4 “Yes, you are receiving a pension” where you say amounts draw from an Account-Based pension need to be verified.
Does income from drawing down from an Account-Based pension affect Old-Age pension entitlements?
Hi Marc, thank you kindly for the feedback, good to know our content is so well received! The regular payments you receive from an Account-Based Pension (ABP) ARE NOT assessed as income. ABPs are effectively assessed the same as a bank account. So assessing your regular payments as income would be like assessing cash you take from your bank account at an ATM as income. ABPs are assessed as assets based on the total balance available in the account, like a bank account. The way Centrelink attribute income generated by ABPs is also the same as bank accounts which is by applying the deeming rate to the total balance. If you’d like to learn more about deeming, CLICK HERE.
Hi, I recieve a state super pension with part of that pension being a tax free component, is this component assesable when appling for an ages pension, thank you
Hi Len, thank you for your question! Centrelink only allow a maximum of 10% to be disregarded, so if your tax free component is less than 10% then it will be assessed as is, if it is more than 10% than it will be capped and assessed as higher than how the ATO looks at it.
i have difficulty with computer operation. Not always I understand the computer mind.
Sorry I missed the point here. Is it not the responsibility of Retirement Essentials to ensure all is correct before it is submitted to Centre link??????
Hi Shamus, Thanks for your question. When providing Retirement Essential’s application service we always endeavour to ensure that the application forms and supporting documents are as accurate as possible while we support you through the process. These mistakes listed above are the ones that we commonly see when applicants have tried to apply for themselves. Not everyone is in a position to access our service so if we can highlight common errors in applications we can try and steer all applicants in the right direction to avoid costly mistakes. Anyone who still feels quite daunted by the idea of applying for the age pension, we’re here and more than happy to help!
Hi. We applied for the age pension on 5th February 2023 we came from NZ in 2005 and from the UK in 1999 do you think it is because of the international connection it is taking so long. We are 76 & 72 years of age.
Hi Alan, thank you for sharing your situation! Having lived in other countries does add extra time on to your processing as your claim needs to go through Centrelink’s International Services department however there are many other factors that can cause delays so this may not be the sole issue. Given you lodged in February we would expect your claim to be approved by now if the foreign residency was the only issue so you should call Centrelink on 132 300 to chase it up.
We are about to reapply for age pension after being rejected due to being over the limit this is now not the case.
Do we have to start from scratch or just supply supporting docs.
Also how do we put in an appeal
Hi Valerie, thanks for your question! In your situation you wouldn’t be able to lodge an appeal because Centrelink’s assessment was correct, you were (at the time) over the allowable threshold. Now that you are under you will need to lodge a new claim and new supporting documents that reflect your current position.