Centrelink and
Age Pension

Does Centrelink affect me?

Centrelink and Age Pension effect more people than one may think

Did you know a couple with a $5m home and $800,000 in Super would be eligible for the Age Pension?

Did you know a couple with a $5m home and $2m in Super would be affected by the Age Pension, whilst not necessarily qualifying?

Considering your eligibility for Age Pension is an important part of retirement planning. It can influence how much risk you require to meet your retirement objectives and therefore influence how you are invested.

Based on your situation and strategy, we can plan for the receipt of Age Pension early on. For example, we may recommend certain products that receive an exempt status for the purposes of the Age Pension asset test, and hence may increase your Age Pension eligibility. It is important to understand the trajectory of your wealth, otherwise these products may not entitle you to the benefit you expected.

In the example above, this couple may not qualify for the Age Pension holding $2m worth of investable assets, but they need to consider it. For instance they may have plans to gift money to their children that may eventually entitle them to receive the Age Pension. They may have an objective to spend as much money as possible in retirement. The Age pension would need to be considered when budgeting for this objective (first world problems!).

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FAQs

  • You are able to apply for the Age Pension online or by completing paper forms and lodging in person at your local Centrelink branch.

  • To qualify for the age pension, you must be 66 and a half years of age if you were born between 1 July 1955 and 31 December 1956. If your date of birth is after 1 January 1957, you will be eligible to receive the age pension at age 67 if you satisfy the rest of the requirements.

    Besides certain residency requirements, the Age Pension is means tested. This means you must have both income and assets lower than a certain threshold to qualify. It is important to note that Centrelink treats different assets differently for the asset and income test. One of the most significant centrelink exempt asset is your family home.

    Asset test:

    If you are single, you will need to hold less than $609,250 of assessable assets for a home-owner or $833,750 for a non-homeowner.

    If you are in a couple, you will need to hold less than $915,500 of assessable assets for a home-owner and $1,140,000 for a non-home owner (both amounts are combined).

    Income test:

    If you are single, you will need to have less than $2,165.20 per fortnight of (Centrelink) assessable income.

    If you are in a couple, you will need to have less than $3,313.60 per fortnight of (Centrelink) assessable income, combined.

    Couples living apart due to ill health receive higher income and asset test thresholds.

  • There are many reasons a person may not qualify for the age pension. This includes not being an Australian resident long enough, failing the income and asset tests, or not being the right age to receive the pension. Individuals may re-apply once they are eligible.

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