They say a picture is worth a thousand words. But in the world of retirement income, an example is often worth even more. That is no doubt why our many members enjoy our comments and Q&A articles – by reading about other people’s situations, they can apply the answers to their own.
We recently reported on the income and assets tests – how they are applied and the new limits from 1 July this year. These articles encouraged a flood of questions. Some, due to the level of detail and privacy required, need to be handled offline. But many were able to be answered swiftly. When it comes to quick answers on any entitlements, Steven Sadler (Head of Customer Services) is our man. So read on to learn more about the income rules and how they might affect you.
Chris is on a Disability Support Pension (DSP) and asks:
I’ve been on the DSP for 22 years. I’m now 68 so should I stay on the DSP or apply for the Age Pension. I was told the Age Pension has the same cut-off points (thresholds).
Steven says:
Hi Chris. Technically the DSP does offer a couple of extra benefits the Age Pension doesn’t. The main advantage of the Age Pension is that it is a bit quicker and easier to apply for and maintain. Having said that, if you have been on the DSP for 22 years, I’m guessing you know how it all works by now and so it’s probably better to stick with it, presuming you are still eligible.
David has an investment property and asks:
I’m 69 and not working. I used my entire super savings to pay off my mortgage, and I now live off the rent from my investment property, which is about $22,000 a year. But I was told by Centrelink that as my investment property is worth about $475,000, I won’t qualify for even a part-Age Pension. Is this right?
Steven says:
Hi David. Presuming you are single (as you have not mentioned a partner) then the maximum assets you can have as a homeowner is $686,250, so the investment property alone would not rule you out. If you have other financial assets, add them to the value of the investment property to see if you come in under this threshold. The free Retirement Essentials Age Pension Entitlement Calculator was designed to help in this regard.
Linda needs to know about accumulation rules:
I am 64 and retired but my super ($170,000) is still in accumulation mode.
My husband receives an Age Pension.
I will soon receive an inheritance of $360,000. I intend to place this amount into my accumulation super account for the next two years to avoid it being assessed for my husband’s Age Pension under the income and assets test. If I decide to withdraw, say, $40,000, for a new car does my super account remain in accumulation mode?
Steven says:
It’s always best to double check with your super fund Linda, but once you are over age 60 and have met a condition of release e.g. you have retired then , yes you can make a withdrawal and leave the remaining balance in accumulation.
Paul wants to know about share income:
If I hold $250,000 in investments, will Centrelink only assess the deeming rate on this sum? Or if I choose to engage in share trading will they also be interested in income made (net of Capital Gains Tax)? Will this additional income have an effect on my thresholds?
Steven says:
Hi Paul. The only income that Centrelink assesses any financial asset to be earning is the deemed income using the official deeming rates. Dividends, interest, and returns on super etc. are not assessed as income; the financial asset is assessed using deeming instead.
Kenneth thinks he might now qualify:
Here’s the detail he shared to check:
I have $300,000 in the bank
I have $326,000 in super
My car is valued at $29,000
I have a lodger paying $200 a week
I have $5000 in another bank account
Am I able to get a part-Age Pension? And can Retirement Essentials process the application form as they did my Commonwealth Seniors Health Card (CSHC) for me?
Steven replies:
Hi Kenneth, based on those figures you would be just under the asset threshold for a single homeowner and would be eligible for a small pension. And yes, we’d be happy to assist with processing the claim forms for you. You can get started by logging back into your account.
Bozena asks about early pension entitlement:
Hi, is it possible to access an Age Pension before reaching your pensionable age? A friend of mine says yes, but at a reduced rate. I do not believe that is correct.
Steven agrees:
Hi Bozena. I think perhaps your friend was referring to an Account Based Pension (ABP) through their super fund? You are correct though; the Australian Government Age Pension is only paid once you turn Age Pension age which is 67.
JG asks about work income:
I will be 67 next year and am currently working part-time (30 hours per week) and earning a net salary of $1800 per fortnight. Will I qualify for the Age Pension?
Steven clarifies:
Hi JG. Centrelink assesses your gross income, not net, and the current threshold (presuming you are single) is $2,444 per fortnight. There is a good chance that this threshold will increase between now and when you turn of age.
A final comment from Ken:
And last, but certainly not least, here’s an interesting point of view. Many members note that their pension entitlements are far from a burden or a cost to current taxpayers as they have paid taxes across their lives. But Ken believes that it is fair to note that Federal Budget spending is for the current year, or the forward estimates (the next four years).
Says Ken:
Just because you have paid taxes all of your life ought not and does not have any relevance to your entitlement to the Age Pension. Paying taxes is to fund government expenditure for that particular year.
We trust that these diverse questions and their answers have helped you to better understand Age Pension rules. But should you require further help, the following two consultations are sure to assist:
An Age Pension consultation where you can ask any questions about your own particular situation
OR
A Maximising your entitlements consultation which helps you discover if you can make any changes to maximise your Centrelink entitlements.
What’s your point of view?
Sometimes it’s fair to ask if the rules associated with the Age Pension aspect of retirement income have just got too complicated … what do you think?
Married couple, husband is on old age pension.
How much can wife earn before pension is affected?
Hi Ash, any couples’ income in excess of $372 p/fn could impact the pension but there are other things to factor in such as deemed income and work bonus deductions which could mean the actual figure for your situation could be different.
Hi there, have been a member for around 3 years now, have to say you Guys do a sterling job.
You people are the one bright light in the ongoing darkness of bureaucratic confusion [Centrelink]
I’m 84yo and have recently completed Centrelink forms SA002 [Pension] and SA369 [Income/Assets] What a marathon! Never again!
Finally, after many lengthy and stressful late-night sessions compiling obscure fragments of previously useless data, it was done!
I’ve sent the lot to Canberra [mid-July] now we wait, I’m told it could be 3 months before I get a response.
I realise now, [to late of course] I could have sought help from you folks at RE, never mind, you’ll be my first call next time.
Good work.
Cheers
Thank you for the compliment Ron, we wish you all the best with your claim.
Hi. I am 68 and will be 69 in March 2025. as my wife is 2 years younger than me, and i retire this month, and our assets between both of us is $600,000 and she keeps working earning $30,000 a year, am I still able to claim a part pension.
Hi Doug, yes based on those figures you would be eligible for a part pension. CLICK HERE to see how much.
If my wife has an Account based Pension that she started in 2017 is the whole amount considered Income for the purposes of the Age Pension Income Test?
Hi Ken, Centrelink assess ABPs the same as bank accounts, as assets based on the total balance. Your wife can draw as much as she likes because it is no different (in Centrelink’s eyes) to having the money in a bank account and then making a regular ATM withdrawal so it is not fair to consider it income.
Re Chris’s question. It is much simpler to be on Age pension if one wishes to travel overseas. I’m not sure if it is even possible to opt to stay on DSP but if it is there would only be a financial advantage if he is single and paying private rent in shared accommodation. Age pension is still subject to the (very unfair) sharer’s provisions whilst DSP is not
Hi l often read about distributing funds to allow you to get the aged pension, but l notice you never write about funeral bonds that are not assessed by centrelink and for a couple this could $17,000 per person, which could make the difference in receiving a pension. I am interested in why you don’t Thanks
Hi Jenny, thanks for the feedback, we will pass it on to our content creators.
Regarding the man on DSP who has asked if he should switch to the Age Pension. There is one good reason to switch and that is because some doctors will bulk bill Age Pensioners but not Disability Pensioners. Having said that, if he has superannuation holdings that he is not currently accessing, he might find that if he switches to Age Pension, he will likely be forced to take an income stream. I think he is still possibly better off remaining on DSP for as long as possible, as I believe any tax perks have been taken away from Age Pensioners. Please correct me if I am wrong.
yes it has
In the pension rules rules it differentiates between a homeowner and non-homeowner.
If you still have a mortgage are you a homeowner still, or a non homeowner, cause you actually still don’t own your home if you have mortgage. Is that correct?
Hi Brian, even if you still have a mortgage you are considered a home-owner, it’s your name on the title and you could sell the house if you so wished so it is yours.
I am 69 yo and will be retiring come November 2024. By that time l have $454,000 in super. No other assets apart from a car that is under my wife’s name. My wife is 72yo and no super. Will l qualify for Age Pension?
Hi Rodolfo, based on those figures yes you would be eligible for a part pension.
Hi, My problem with getting age pension is not about income test, it’s about residence rules.
I applied for age pension as a couple back in May 2024. I’m 67 this month, August 2024, my wife was 67 in June 2024. I’m Australian Citizen since 1986 ans was a refugee arriving in Australia in May 1980. My wife came to Australia in April 2022 under the partner visa and was granted permanent visa in May 2024. The outcome for my age pension application is Center Link granted the payment for myself only.
I wonder if family members of a refugee are exempt from the residence rules for age pension payment.
Could you advise me on whether Retirement Essentials can help me to appeal their decision.
Kind regards,
Tuan
Hi Tuan, based on your explanation we believe Centrelink have made the correct decision and there are no grounds to appeal it.
Hard to get correct answer when ask around. We own our own home and live in it. It’s not flash. We have no super left as we took it out to pay bills and house off when we lost employment. We have about $350.000 in bank which is what where living off. And I’m 66 now and wife’s 65 almost 66. My question is how much can we have in bank and if one of us was to get work, how much could we earn weekly or forthrightly and would we still be able to get age pension with what we have.
Hi Ray, might be best to book a consultation with one of our specialists who can go over everything with you. You can book HERE.
We foolishly sold our lovely house as we found 5 acres were too much for us . We just had enough money to buy a small house nearby . The house sold for 1million and 80 thousand and after paying back family remembers for a bit we had borrowed we ended up with being able to deposit it in an account for 1 year which would enable us to live on the interest . We have never drawn a pension and are in our mid 80’s . I guess we won’t get one now eh . Our son has loaned us some money to last till we start getting our interest .
If receive a small British monthly pension, does this payment affect receiving a full Australian aged pension? Is the British pension amount counted as income?
Hi Alison, yes foreign pensions are assessed as income.
My husband and I want to apply for a CSHC. We are both 67.
I have the forms but can’t find any information that says if I need to fill in 2 separate forms or will one do?
Hi Caroline, you can both apply using the one form so long as you tick yes to question 8 which asks if your partner is also claiming or not.