SuperGuide

Superannuation and retirement planning information

October 2024 Retiree newsletter

What happens to my Age Pension if I sell my home?
Now updated with part 2 (if you are moving to a lifestyle village) and part 3 (if you are not purchasing a new home straight away). Read more.
What happens to my Age Pension if I sell my home?
Now updated with part 2 (if you are moving to a lifestyle village) and part 3 (if you are not purchasing a new home straight away). Read more.
Case study: Recontribution of death benefits?
If your partner dies and you would like to combine your pension with their death benefits, this strategy could provide the way. Read more.
Case study: Recontribution of death benefits?
If your partner dies and you would like to combine your pension with their death benefits, this strategy could provide the way. Read more.
Retirement: The goals are shifting
The old definition of retirement no longer fits a new generation of older Australians who are redefining this new chapter of life, often swapping old careers for new opportunities. Read more.
Retirement: The goals are shifting
The old definition of retirement no longer fits a new generation of older Australians who are redefining this new chapter of life, often swapping old careers for new opportunities. Read more.
Proposed increases to the cost of aged care
If you or a loved one are considering aged care then it could pay to get a wriggle on – the cost of care, both in and out of home,… Read more.
Proposed increases to the cost of aged care
If you or a loved one are considering aged care then it could pay to get a wriggle on – the cost of care, both in and out of home,… Read more.

Advice options for planning your retirement

Thursday 21 November 2024 at 4:30 pm AEDT

The vast majority of Australians plan and start their retirement without any advice, with cost and trust being the main barriers. In this webinar we explore some of the key options for advice and guidance, including from financial advisers, super funds, retirement coaches and retirement income modellers.

Q: I’m 82 years and my wife is 80 years. I have a few questions about eligibility for a part Age Pension.

  • What assets are exempt in the assets test for a part pension from Centrelink?
  • What is the level of income and how is it calculated under the income test with Centrelink?
  • Is an annual income of $76,800 derived from a super income account and a term allocated pension eligible for a part pension?
  • Are annuities and term allocated pensions partly exempted under the asset test?

A: If your term allocated pension was started prior to 20 September 2007, 50% of its balance is exempt from the Assets test.

In the Income test, the actual income you receive from the product minus an annual deductible amount is assessed.

Your product provider will be able to provide you with a ‘Centrelink schedule’ that shows what to declare to Centrelink.

The assessment of your super income depends whether it is a defined benefit pension, an account-based pension, or a lifetime pension.

Defined benefit pensions have no asset value and the actual income (less up to 10% tax-free component) is assessed as income.

Account-based pensions have their balance counted as an asset and deemed income counted in the income test. Note that account-based pensions opened prior to 1 January 2015 instead have income assessed under deductible amount rules if the account holder has been continuously receiving Centrelink income support since that date.

Lifetime pensions purchased since 1 July 2019 that comply with the capital access schedule have 60% of their purchase price counted in the assets test until you turn 84, or for a minimum of 5 years after purchase, after which 30% of the purchase price is counted as an asset. In the income test, 60% of the income received is counted.

Older lifetime pensions are assessed differently and the relevant detail can be obtained from your provider.

Your home is exempt from the assets test.

Often, the best way to determine whether you are eligible for Age Pension is to go ahead and apply with Centrelink. They will then assess all your income and assets and calculate the rate of pension you are eligible for (if any). The providers of your income streams can tell you the information that Centrelink will need for the assessment of those products.

Our article on retirement income options also contains more detail about Centrelink means test assessment of the income stream products available in today’s market.

If you’re the proud owner of an account-based pension you may be interested to know that super funds think of your money as ‘sticky’ because it is so unlikely for members like you to move their savings. Don’t let your fund take you for granted – take the time to consider how to choose a pension fund and be prepared to switch providers for better features, lower fees, and higher returns.

Important: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

Superguide Pty Ltd ATF Superguide Unit Trust as a Corporate Authorised Representative (CAR) is a Corporate Authorised Representative of Independent Financial Advisers Australia, AFSL 464629.