By Max Grant.
Let’s face it, Centrelink can be a nightmare to deal with. If waiting on hold for up to an hour or going to your local branch wasn’t hard enough, try navigating some of the complex definitions and thresholds that change on a regular basis.
Yes, it’s fair to say Centrelink has more rule changes than the AFL. We get a constant stream of questions regarding Australia’s favourite institution and what you might be eligible for as you close in on retirement.
In response, we decided to put together a list of our top seven Centrelink FAQs to help build your knowledge and know your rights when it comes to the subject of retirement and Centrelink.
Here they are from one to seven:
1. Am I eligible for an Age Pension from Centrelink?
To be eligible you must be a certain age* and depending on your circumstances be under or within certain Asset and Income testing thresholds. At the very least, to be eligible for Age Pension you must be 66 or older.
Here is a table demonstrating how Age Pension age is currently increasing according to when you were born:
* Despite what you might hear or read, there’s no such thing as a ‘retirement age’ in Australia, nor any laws that dictate when someone can retire. In theory, you can choose to retire whenever you want if you have the financial resources to afford it.
In practice, there are two age rules that impact when most Australians can retire because they allow you to access funds to support your retirement. These are:
Preservation age: This is the age when you can access your super provided you have also met a condition of release (such as retiring or turning 65).
Age Pension age: This is the age when you can access Australia’s Age Pension, provided you’re an Australian resident and you qualify under the income test and the assets test.
2. How much can I gift before my payment is affected?
You can gift $30,000 over any 5-year rolling financial year period, with a maximum of $10k per financial year without your Centrelink payment/entitlement being affected.
If you or your partner gift money, income, or assets, over this amount Centrelink may assess it as an asset for a period of 5 years.
Before you or your partner make a gift, it could be wise to contact Centrelink, or your financial adviser, to check how it will affect your payment.
3. As a self-funded retiree, is there anything other than the Age Pension I could be eligible for?
For those that are Age Pension age and do not qualify for a pension, you could be eligible for a Low-Income Health Care Card or Commonwealth Seniors Health Card (or both).
Check the current income test on the Services Australia website for more about the income test for a Low-Income Healthcare Card and whether you qualify. It is important to note that you can be any age and be eligible for a Low-Income Health Care Card
You must be Age Pension age to receive a Commonwealth Seniors Health Care Card in addition to meeting a few other criteria.
4. What benefits do I get from the Low-Income Health Care Card?
Most of the benefits are the same as the Pensioner Concession Card, though as holder of the Pensioner Concession Card you get a discount on your rates notice and an additional discount on the cost of your motor vehicle registration.
The benefits you will receive as a holder of the Low-Income Health Care Card include:
- Cheaper medicine under the Pharmaceutical Benefits Scheme
- Bulk billed doctor visits (this is up to your doctor)
- A bigger refund for medical costs when you reach the Medicare Safety Net.
Your state or territory government and local council may offer you more. They may lower your:
- electricity and gas bills
- property and water rates
- public transport fare
- motor vehicle registration.
Whilst it does not sound extravagant, we find our self-funded retirees to be grateful for the discounts the card provides.
5. How does my partner’s assets and income affect my Age Pension payment?
For Age Pension purposes your partners assets and income will be used to determine your entitlement. Generally, all assets are assessable but there are some exemptions. For example, a common (mostly unknown) exemption is that superannuation held in accumulation phase whilst you are under Age Pension age is not assessable for Centrelink testing purposes.
6. Do Centrelink know all my information and how often do I need to update Centrelink?
Centrelink will ask a lot of personal questions, but they do not know what is happening with your finances on a day-to-day basis. It is your job to notify Centrelink within 14 days of any significant changes in your personal financial circumstances.
When you undertake an application, Centrelink will ask you for some documents to support your claim for a payment or concession card. It does not have the power to spot check your bank accounts as some people claim.
7. Can somebody do all this Centrelink stuff for me?
Yes, you have the option of implementing a nominee arrangement. Muirfield finds that our clients appreciate the option of nominating us as a correspondence nominee to assist with the management of their Centrelink payments and concessions.
This ensures that any applications, updates, or problems are handled in the most efficient and effective way possible.
Contact us if you would like to discuss how we can help with Centrelink and your retirement.
There are lots of nuts and bolts when it comes to Centrelink and knowing what you’re eligible for, but the process for claiming payments and concessions can be straightforward once you’re all set up.