The Age Pension gets better
Some things just get better with age. Some cheeses, great Australian red wines, and the Age Pension.
How’s that, you ask
- More people are eligible at older ages.
- And many people move to a higher Age Pension as they age and spend down their other assets.
- And everyone benefits from the inflation adjustments, which have actually been a little higher than inflation.
More people are eligible at older ages
The Retirement Income Review showed that 42% of people get the pension at 66 (eligibility age). But 80% of people get the Age Pension by age 80. That’s a very big slice of Australia’s older population that get the Age Pension. So, you might be a little aggro if you’re 66 and not yet entitled to the Age Pension. But depending on your circumstances, it’s very possible you’ll be eligible later.
Most move to a higher Age Pension rate
Some people start out with a full Age Pension. We find about 25% of our Retirement Essentials clients using our Age Pension concierge service get the full Age Pension and about 75% get a part pension. And our Commonwealth Seniors Health Card clients are currently too wealthy for the Age Pension but still get the attractive benefits of the Health Card.
As they age, pensioners are likely to get a larger part pension or move to the full age pension. That’s the way it should be because of the means test. As people spend down their super and other retirement savings, their entitlements should grow.
For example, Tom and Mary started their retirement at age 66 with assets of $750,000 and were eligible for a part pension of $9,831 per year. As they spent down their super to maintain a comfortable lifestyle, they found their Age Pension payments went up. They had less super. Not to worry, the Age Pension kicked in more to support their lifestyle. That’s the way the system is designed to work.
Similarly, many clients who are only entitled today to the Commonwealth Seniors Health Card will find over time, they become eligible for the Age Pension. Maybe a part pension to start and later on a full pension.
And all pensioners benefit from inflation adjustments
An amazing feature of the Age Pension is how its payout rates increase with inflation. There aren’t many ways to get guaranteed protection against inflation increases, for life. The Age Pension has delivered that, with rises every year since 1933 (only 1 last year as the September rise was omitted due to low inflation).
So, the Age Pension gets better with age. And it’s why keeping on top of your entitlements pays off. Being conscientious about your benefits means that you’ll get what you’re supposed to get and underwrite your lifestyle to the greatest extent possible with government help. Our Age Pension eligibility calculator and our Keeping Your Age Pension services are designed to help you do just that. You can find that here
So let us know what you think by commenting below.
Excellent article. Knowing what percentage of elderly use what proportion of the Age Pension is very useful.
thanks, Mike.
Always remember, if you work hard enough you’ll have the privilege of not qualifying for the Health Card OR the Pension !
What is the eligibility for getting a Seniors Health Care Card and the resulting benefits?.
Why is it available to people who can not get the pension?.
If you are getting a part pension, how do you apply?
If you’re already on a part Age pension, you should not be worried about the Seniors Health Care Card, as you should already be on the Pensioners Concession Card, which has equivalent benefits and better. The Seniors Health Card helps people over the Age Pension eligibility age to get medical, pharmaceutical and other concessions while have assets or income at higher levels than allowed under the Age Pension requirements. It’s a very good benefit for many who are not financially eligible for the Pension. Our Age Pension eligibility calculator directs clients to the benefit available to them and our service helps them apply for the right one.
Shall ring RE tomorrow regarding my eligibility. i think the senior health card is a distinct possibility but will talk on 1300527727. Thank you in anticipation. Noel Blake.
Just wondering if my partner is eligible for a CSHC card.Partner is of pension age but i am not.Partner is currently recieving a super pension of approx.$25K per year and i am currently employed on about $105k before tax per year.I am thinking about retiring in about 12mnths and are only just under asset test limit for a couple.(approx $80k under)the top limit.I also own my own house. Is she eligible for the card while i am still working or not.If not what is the cut off point for the CSHC card.If you could answer this for me it would be great.I also believe that my partner can get a pension when i retire even if i am not of pension age as we are not eligible at the moment due to my employment.I can also lower assets into my super in future if need be.
We do not expect you would be eligible for the CSHC as your income is over the threshold. As of today a couple can earn up to $89,290 and still receive a CSHC. Regarding your potential retirement in 12 months time, presuming you have accurately counted your partner’s super pension as an asset, then upon retirement your partner can apply for the Age Pension and skip CSHC all together(as a pension card comes with the Age Pension).
Hi Jeremy do you mean have i included the whole super benifit(balance) in the assests test which i have done or is the 25K per year asset tested some other way in which i am not aware about.
Assuming the money is in an account based pension, yes, it’s the whole value of the account that would be measured for the Assets test. If it’s a defined benefit fund, the income is assessed against the income test.