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ยป Getting the aged pension

Date published: 25/10/2010

Getting the aged pension

Many people are generally a bit fuzzy on what sort of entitlements they’re going to receive from Centrelink on retirement. It’s no wonder, as with most bureaucracies, Centrelink rules and regulations can be a bit confusing despite its best efforts.

So, in this article, SuperLiving is going to break down exactly what you need to qualify for the aged pension, and how recent changes will affect you.

How old is old in the government’s eyes?

The first basic criteria you have to pass to be eligible for the aged pension is the age test. There’s a full table available here , with recent changes announced in the 2009-2010 federal budget having an impact on retirement age.

From July 1, 2017, the retirement age will be 65.5 years, an increase from the current 65. It will then rise by six months every two years until 2023, when the retirement age will be 67.

So, if you’re planning to retire around that time, keep a lookout for the changing age requirement.

After all, it would be bit disheartening to find out you have to continue working for another six months when you’ve had your heart set on retirement.

The dreaded asset and income test

You may think the money you’re living on now is inadequate, but the government might disagree.

To receive a full pension, singles usually can make up to $146 per fortnight or, for a couple, a combined income of $256 per fortnight.

To qualify for a part pension, a single person must make less than $1578.20 per fortnight and a couple must make less than $2415.20 per fortnight combined.

Many forms of income are subject to an income test and this will determine the final figure for your income level.

In terms of assets, a single person who is a homeowner can have up to $181,750 in assets (over and above the value of the home) to receive the full pension.

Assets could include cars, cash accounts or household contents (you can find the full list at here ).

To get the part pension, a single homeowner must have less than $659,250 in assets.

If you’re single and a non-homeowner, you can have up to $313,250 in assets to get the full pension and less than $790,750 to get a part pension.

If you’re one half of a couple, you can have up to $258,000 combined if you’re a homeowner and want to receive the full pension.

If you want a part pension and you’re a homeowner, you must have less than $978,000 in assets combined.

If you’re one half of a couple and you don’t own a home, you can have up to $389,500 combined to receive the full pension and must have less than $1,109,500 combined in assets to get a part pension.

A full table is available here , but if you’re wondering why the rate is less for homeowners than it is for non-homeowners, it’s because Centrelink deems your home to be a valuable asset which can be sold for income support should the need arise.

Residence requirements

To get the aged pension, you must be deemed to be a citizen of Australia. Centrelink’s guidelines for this are fairly straightforward.

To lodge an aged pension claim, you have to be an Australian resident and be in Australia on the day your claim. To qualify an as Australian resident, you have to be living in Australia as:

# an Australian citizen;
# the holder of a permanent resident visa; or
# a New Zealand citizen who was in Australia on February 26, 2001, or for 12 months in the two years immediately before that date.

Once you’ve satisfied these conditions, then you have to meet the 10-year residency requirement.

This simply means that you have been an Australian resident for a continuous period of at least 10 years, or for a number of periods which total more than 10 years, with one of the periods being at least five years.

Okay, I qualify. How much do I get?

As part of the 2009-2010 budget, the full pension rate has gone up $14.20 per fortnight for a single person while a couple can receive a maximum increase of $10.70 a fortnight per eligible person.

That means the current rates for a full pension stand at $658.40 per fortnight for singles while couples can get $496.30 a person per fortnight.

These amounts don’t include any pension supplements you may be eligible for.

One of the major changes in place is how the pension supplement is paid out.

In the past, a single person on the full pension got a GST supplement worth $19.50 per fortnight, a $6 pharmaceutical benefit, a $5.32 telephone allowance and $19.95 for utilities, totalling a maximum $50.77 per fortnight.

This has now increased to a total of $57.70 for a single person and $43.50 for each person in a couple.

Now, those payments will rolled together and you have the option of getting it paid out quarterly instead of fortnightly.

The rationale is that most bills are issued quarterly instead of fortnightly, and receiving the money on a quarterly basis will make it easier to track.

Summing up

This is just a basic guide to the aged pension, so if you have any questions about the aged pension or the changes to the aged pension, check out the Centrelink resource for the aged pension or call 13 23 00.

For more information, or to discuss your specific situation, please contact me directly.

James McGrath
SuperLiving

Now that you have read this, what do you think?  Do you have other ideas?  Please share you views with other members (eg by blog or discussion form) and/or request professional member(s) to contact you directly.

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