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Your Age Pension questions answered


National Seniors Financial Literacy Service share the most commonly received questions and answers from members about the Age Pension.

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Navigating the Age Pension requirements and limitations can be a confusing experience – but National Seniors has a free Financial Literary Service available to members that can help.

Below are the most common questions our Financial Literary Service receives from members about the Age Pension.

1. How much can you gift on the Age Pension?


You can gift up to $10,000 in one financial year or $30,000 over 5 financial years (but no more than $10,000 in a single financial year).

If you go over this amount, the excess (the extra money you pay over your gifting limit) will be counted in your assets test and deeming (or the rate of income the government assumes your assets have earned) and will also be applied to your income test for 5 years afterwards.

If you get the gift back, Centrelink will use the date you got it back in their asset and income tests.

2. How often should I update my assets with Centrelink?


You should update your asset details with Centrelink any time your situation or the value of your assets change – this could be buying or selling an asset, receiving an inheritance or gift, or depreciation of assets such as cars or caravans. It can also include changes to any retirement funds such as superannuation.

Centrelink will generally complete a balance update for most recipients annually (usually in July), however you are obliged to report changes greater than $2,000 in financial assets you own to Centrelink within 14 days.

If your asset has decreased in value, this could mean an increase to your pension amount. If your asset has increased in value, you may see your pension amount decreased.

Centrelink applies a bulk valuation update for shares in public companies in March and September, but you can choose to have this reassessed at any time.

You can follow the instructions on the Centrelink website for managing your income and asset details.

Full pension assets limits

Your situation

Homeowner

Non-homeowner

Single

$270,500

$487,000

A couple, combined

$405,000

$621,500

A couple, separated due to illness, combined

$405,000

$621,500

A couple, one partner eligible, combined

$405,000

$621,500

Source: Centrelink


Part pension assets limits

Your situation

Homeowner

Non-homeowner

Your situation

Homeowner

Non-homeowner

Single

$599,750

$816,250

A couple, combined

$901,500

$1,118,000

A couple, separated due to illness, combined

$1,063,500

$1,280,000

A couple, one partner eligible, combined

$901,500

$1,118,000

Source: Centrelink

3. What is counted as an asset?


According to Centrelink, the below items are classed as assets for the purposes of the assets test:

  • Financial investments:
    • Bank building society and credit union accounts
    • Cash on hand
    • Deeming accounts
    • Term deposits
    • Uncleared cheques
    • Managed investments (including margin loans)
    • Shares and securities
    • Superannuation investments
    • Annuities and income streams
    • Money loaned
    • Money held in solicitor trust accounts
    • Bonds and debentures
    • Gold, silver, or platinum bullion
    • Gifting.
  • Home contents, personal effects:
    • Furniture and appliances
    • Personal effects such as jewellery and laptops
    • Motor vehicles, boats, and caravans
    • Licences (such as commercial fishing or taxi licenses)
    • Surrender value of life insurance policies
    • Collections for trading, investment, or hobby purposes (such as stamp collections)
    • Non-business livestock.
  • Managed investments and superannuation:
    • Managed investments
    • Investment and unit trusts
    • Life insurance and friendly society bonds
    • Property development funds
    • Self-managed super funds
    • Funeral bonds
    • Superannuation if you’re over Age Pension age or you receive payment from it.
  • Real estate:
    • Primary place of residence: Your primary place of residence is exempt from asset tests.
    • Real-estate excluding primary place of residence: Any real estate you rent out, leave vacant for any amount of time (such as a holiday home), or let somebody else live in for free.
    • If you own and live on a farm: it is assessed differently. Learn more here.
    • Granny flat interest agreements: If you transfer assets or money in a ‘granny flat interest’ agreement (such as transferring a title to your child with the expectation you will live in it for the remainder of your life), it may be assessed as an asset, rather than your primary place of residence.
    • If you live in a retirement village: Based on how much you paid as your entry contribution, Centrelink will then determine whether you are classed as a homeowner and if it will be included in your assets test.
  • Annuities, income streams and superannuation pensions: 
    • Any income stream made through a series of regular payments from accumulated super contributions or purchased using superannuation or other money such as: annuities bought from life companies or superannuation pensions bought from a super fund.
  • Shares:
    • Publicly listed and unlisted companies
    • Private companies.
  • Sole trader, partnerships, private trusts and private companies:
    • If you’re a partner in a business or a sole trader, some assets used for the business will count as yours and will be included in your assets test.
    • If you’re a controller of a private trust or private company, some assets and income will count as yours based on your level of control, as well as the assets and income generated.
  • Deceased estate:
    • Assets from deceased estate will need to be reported to Centrelink 14 days from receiving them, or being able to receive or benefit from them.

4. Do I need to let them know if I buy a car?


Yes. A car is an asset and must be declared to Centrelink upon purchase.

Taking money out of your bank account to buy a car might allow you to get more pension under the Income Test. This is because a car is not a financial asset and not subject to deeming.

Centrelink will assess the value of your car according to it’s current market value (which may be less than what you originally paid for it).

Centrelink may not automatically apply a rate of depreciation to assets on an annual basis. You will have to advise if the value of your car has changed. This could result in a higher pension payment if its market value has gone down.

Read more about this in our article.

5. Will I lose my pension if I work?


This will depend on how much you earn. You are allowed to earn a certain amount of income before the Age Pension payments are reduced or cancelled.

To receive the maximum Age Pension, your fortnightly income will need to be under $180 if you’re single or $320 for a couple (combined). Every dollar you earn over this will reduce your pension income by 50 cents for singles and 50 cents combined for couples.

Pensioners who earn more than $33,000 per year (including pension) will also be taxed.

National Seniors is calling for reforms to the Age Pension income test to allow pensioners who want to work, to work more. Many pensioners have limited savings and would benefit enormously from a few extra years of work to give them a little more income and top up their savings, and it will help businesses currently suffering from massive worker shortages as a result of COVID-19.

Join our Fairness in Retirement Income campaign to show your support and receive updates on our campaign progress.

Join campaign

6. Do I need to let them know about my inheritance or will I lose my pension if I get an inheritance?


Inheritances are hard to predict, so they are exempt from the income test, however what you do with the inheritance could impact your pension.

If you receive a lump sum payment:

Will affect pension

  • If you receive a lump sum and choose to invest it in bank deposits or other investment vehicles such as shares or superannuation, or purchase an asset with it, it will be treated as an asset and also potentially have deeming applied.
  • Giving more than $10,000 a year or $30,000 over 5 years (with no more than $10,000 in a single financial year). This would be subject to means testing for the next five years.




Won’t affect pension

  • If you use it to pay off a mortgage or on home repairs on your primary place of residence, it will not affect your income or assets test.
  • Spend it on something that isn’t classed as an asset (such as a holiday).
  • Gift less than $10,000 a year or $30,000 over 5 years (with no more than $10,000 in a single financial year).

If you receive an asset:

If you receive an asset (such as a car or house) as part of an inheritance, it will be included in your assets test and may have deeming applied (however, cars and homes are excluded from deeming). Assets from deceased estate will need to be reported to Centrelink 14 days from receiving them, or being able to receive or benefit from them.

7. What value should I put for car and contents on my Age Pension application?


The value of assets that typically depreciate such as cars and home contents is not how much it would cost to replace and insure them, but rather it’s market value (how much it would sell for second-hand).

You may buy a car brand new but the moment it leaves the dealership, it immediately depreciates.

Ensure you update the depreciation of these assets regularly with Centrelink, as it could increase how much pension you are paid. Centrelink will also not apply a rate of depreciation on assets on an annual basis, so ensure you do this regularly so you don’t miss out on pension you might be entitled to.

8. I’m about to retire and I’m really worried about having to deal with Centrelink or do the Age Pension application. There’s too many questions and it’s confusing.


Our members often tell us just how complicated and frustrating the process of applying for the Age Pension (and keeping it) can be. Applying for the Age Pension will involve having to answer hundreds of sometimes complicated questions, paying multiple visits to Centrelink offices and experiencing long wait times.

That said, it is an important source of retirement income for older Australians, so the last thing you want to do is avoid applying for it or giving up just because of the hassle involved.

There are services, such as Retirement Essentials, that can provide support and make the process of applying for the Age Pension less complicated and time consuming, help you achieve your maximum pension entitlements, and provide ongoing support. You can access Retirement Essentials eligibility calculator here to see what you could be entitled to.

Alternatively, you can reach out to National Seniors Financial Literacy Service on 1300 020 110, who can provide free advice information around the Age Pension, as well as other areas of retirement income, concessions, estate planning, investments and more.

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