Age Pension FAQ’s

The complexity of Centrelink rules can be overwhelming.  As experts in this field, we regularly receive questions and ‘what if’ scenarios to assist clients to make sense of it all.  For your benefit, we have put together a list of the most frequently asked questions.

What’s the maximum amount of Pension I can receive?

These rates are current as of 20/03/2016.

At what age can I claim Age Pension?

If you are currently 65 you are eligible to apply.

On 1 July 2017, the qualifying age for Age Pension will increase from 65 to 65 years and 6 months.

The qualifying age will then increase by 6 months every 2 years, reaching 67 by 1 July 2023.

What determines my rate of Pension?

Centrelink uses an Asset and Income test to determine your rate of payment.   Your entitlements reflect your level of Income or Assets – the more you earn or own, the lower your entitlement.  Both tests operate independently of each other and your rate of payment will be determined by the test that provides you with the lowest entitlement.  If you are a member of a couple your partners Assets and Income are included in your assessment.

Your primary home is an exempt asset and its value does not impact your rate of payment.

What is ‘deemed income’?

The Income test also includes ‘deemed income’ whereby Centrelink assumes your financial assets generate a predefined level of income.  The assumed rate of income is applied regardless of what your financial assets actually earn.

What should I do if my circumstances change?

If your circumstances change Centrelink needs to be advised within 14 days.  If you do not update Centrelink of the change in your circumstances you may be over paid or under paid.  In the case that you have been over paid, you will be required to pay the extra back.

How often do I need to update Centrelink?

Even if you don’t think your situation has changed, we encourage you to review what Centrelink has recorded every 12 months.   Keep in mind, if your circumstances change Centrelink needs to be advised within 14 days.   You can update Centrelink by visiting your local office or on the phone (132 300).  There are also options available via fax or mail.

If I receive the Age Pension do I also receive the concession card?

Yes – regardless of the amount of Age Pension you receive you will automatically receive the Concession card.  For a list of benefits you may be eligible for, please refer here.

Does Centrelink know what I hold in the bank?

Centrelink does not have access to your personal bank details.  You need to update Centrelink when your bank balances changes by an amount of $2,000 or more.

How much can I gift?

Centrelink allows gifting of up to $10,000 per financial year and up to a maximum of $30,000 over 5 years.

What happens if I gift more than the allowed $10,000?

If you exceed the $10,000 gifting limit Centrelink will continue to count the excess gift as a ‘deprived asset’ for a period of 5 years.  For example if you made a gift of $50,000 in one financial year Centrelink will continue to assess the extra $40,000 for 5 years.

What happens if I receive an inheritance?

The outcome may depend on what you inherit and what you plan to do with the inheritance.  It is important to seek advice about your options.

Generally, the inheritance of money and property is likely to increase your assessable assets and may reduce your Age Pension entitlement.  There may be some strategies to consider to protect your entitlements and we encourage you to seek advice from your financial adviser.

Can I work while on Age Pension?

Yes – As an employee the first $250 you earn each fortnight does not impact on your Age Pension.  The income above this amount will be assessable as income and may impact your rate of Age Pension.  For every fortnight when you don’t earn income, you accumulate the allowed $250.  This is added to your ‘Work Bonus’ balance.  This balance can accumulate up to $6,500 and can then be used to offset income in fortnights where you earn more than $250. For seasonal employees this allows your income to be treated in a more equitable manner.

What happens if I sell my home?

The proceeds received from the sale are exempt as an asset for up to 12 months or until you purchase a new home, or other assets.  During the 12 month exemption, the proceeds are not counted under the asset test but are deemed to earn a level of income, this may impact your Age Pension entitlement.   If you purchase a new home for less than the sale value of your previous home, the difference will then be assessed under both the income and asset test.

 What happens if I lose the Age Pension?

Should your Assets or Income exceed the allowable pension thresholds you will lose your entitlement.  There are alternative concession cards that you can apply for whilst not receiving an Age Pension such as the Commonwealth Seniors Health Care card and the Low Income Health Care card.

If your Assets or Income reduce in future you can reapply for Age Pension.