Securing your future

Centrelink

Centrelink deliver a range of government funded social security benefits to assist individuals and families. The type and amount of benefits you can receive depend on your personal and financial circumstances and your stage of life. Common benefits include:

  • Age Pension
  • Service Pension
  • Disability Support Pension
  • Newstart Allowance
  • Family Tax Benefit
  • Carer Payment
  • Carer Allowance
  • Widow Allowance
  • Pensioner Concession Card
  • Commonwealth Seniors Health Card

What is the Age Pension?

The Age Pension is a social security benefit designed to provide an adequate retirement income for recipients. The qualifying age for both men and women is based on a sliding scale and is gradually being increased every two years. As at 1 July 2023, the qualifying age will be 67. In the Federal Budget released in May 2014, the Government has proposed to increase the age pension age to 70 by the year 2035.

What is the Service Pension?

The Service Pension, managed by the Department of Veterans’ Affairs, provides income support to eligible veterans and eligible partners, widows or widowers. The Service Pension rates are the same as those for the Age Pension and are generally subject to the income and assets tests.

What is the Work Bonus?

The Work Bonus was introduced on 20 September 2009, to replace the Pension Bonus Scheme which was closed on 19 September 2009. It provides an incentive for pensioners over Age Pension age to participate in the workforce. Customers registered prior to its closure will continue accruing entitlements as previously. To compensate for the closure of this measure, the Work Bonus will operate as a pension income test concession for people of Age Pension age. The concession means that the first $250 of employment income per fortnight is not counted for income test purposes. This concession equates to a maximum increase in Age Pension entitlement of $3,250 pa (single or couple combined).

Age requirements

To be eligible for Age Pension you must be 65 years of age or older. From 1 July 2017, the qualifying age for Age Pension will increase from 65 years to 65 years and 6 months. The qualifying age will then increase by 6 months every 2 years, reaching 67 years by 1 July 2023. For the latest information visit www.humanservices.gov.au. Refer to the table below to determine at what age you will be eligible for the Age Pension.

If you were born between You qualify for Age Pension at age
1 July 1952 to 31 December 1953 65 years and 6 months
1 January 1954 to 30 June 1955 66 years
1 July 1955 to 31 December 1956 66 years and 6 months
From 1 January 1957 67 years

Age Pension rates

The amount of Age Pension you receive will depend on the income and assets test. The Age Pension is treated as taxable income and pension rates are indexed in March and September each year. The table below shows the maximum Age Pension rates for singles and couples each fortnight.

There are different rates of Age Pension payments for single people and couples. Your rate also depends on your income, assets, and other circumstances.

Pension rates per fortnight Single Couple each Couple combined Couple each separated due to ill health
Maximum basic rate $797.90 $601.50 $1,203 $797.90
Maximum Pension Supplement $65.10 $49.10 $98.20 $65.10
Energy Supplement $14.10 $10.60 $21.20 $14.10
TOTAL $877.10 $661.20 $1,322.40 $877.10

The income and assets tests

When determining your eligibility to receive the Age Pension or Service Pension, Centrelink applies two forms of assessment: the income test and the assets test – the one that results in the lowest payment rate will apply.

Understanding the assets test

For the purposes of the assets test, an asset is any property or possession that you fully or partly own. Assets are valued according to their market (sale) value.

Some of the assessable assets covered by the test are:

  • funds in bank accounts, shares and managed funds
  • superannuation funds (once over Age Pension age)
  • motor vehicles, boats and caravans
  • household contents and personal effects
  • property such as holiday homes
  • account based pensions and other income streams.

Assets exempted under the test are a principal home and some retirement income stream products, such as annuities purchased before 20 September 2007

For social security purposes the assets test limits differ depending on whether you are single or married and whether or not you own your home. There are also different rates for a couple separated by illness and a couple where only one partner is eligible for the Age Pension. Visit humanservices.gov.au for full details.

Assets test free area for full pension

Pensions start reducing when assets are more than the following amounts.

Family Situation Homeowners Non-homeowners
  1 July 2016 1 January 2017 1 July 2016 1 January 2017
Single $209,000 $250,000 $360,500 $450,000
Couple combined $296,500 $375,000 $448,000 $575,000
Illness separated couple combined $296,500 $375,000 $448,000 $575,000
One partner eligible, combined assets $296,500 $375,000 $448,000 $575,000

 

Assets test limits for part pensions

Part pensions cancel when assets are more than the following amounts.

Family Situation Homeowners Non-homeowners
  20 September 2016 1 January 2017 20 September 2016 1 January 2017
Single $793,750 $542,500 $945,250 $742,500
Couple combined $1,178,500 $816,000 $1,330,000 $1,016,000
Illness separated couple combined $1,466,000 $960,000 $1,617,500 $1,160,000
One partner eligible, combined assets $1,178,500 $816,000 $1,330,000 $1,016,000

 

For every $1,000 of assets over these amounts, the rate of Age Pension payable reduces by $1.50 (single and couples combined). The taper rate is expected to increase to $3.00 come 1st January 2017.

Understanding the income test

For the purpose of the income test, income is defined as any money earned, derived or received for your use or benefit and includes:

  • deemed income from bank accounts, investments, shares and interest
  • gross income from salary and wages
  • income from business and real estate
  • deemed income from superannuation if you are over Age Pension age (and from 1 January 2015, account-based pensions).
  • Annualised pension payment from certain account based pension purchased prior to that 1st January 2015 that exceed a deductible amount

 

Single

Fortnightly income up to $164 over $164
Reduction in payment none – full payment 50 cents for each dollar over $164

 

Couple combined, couple separated due to ill health

Fortnightly income up to $292 over $292
Reduction in payment none – full payment 50 cents for each dollar over $292(combined)

Commonwealth Seniors Health Card

Even if you don’t qualify for the Age Pension, you may be eligible to receive the Commonwealth Seniors Health Card (CSHC). The CSHC provides a range of benefits, such as discounts on prescription medicine, Australian government funded medical services and other government concessions, to self-funded retirees who do not qualify for the Age Pension but have an adjusted taxable income of less than $51,500 pa for singles or $82,400 pa (combined) for couples. New account based pensions commenced on or after 1 January 2015 will be subject to deeming. However ABPs that commenced prior to 1 January 2015 will be grandfathered so that nothing is included in the income test (assuming paid from a taxed super fund) if you are a holder of a CSHC immediately before 1 January 2015 and continuously in receipt of the CSHC.

Pensioner Concessions Card

The Pensioner Concessions Card is available to you if you receive income support payments such as the Age Pension, Disability Support Pension or the Service Pension. Cardholders are eligible for reduced cost medicines under the Pharmaceutical Benefits Scheme (PBS), as well as other concessions, including reduced water rates, energy bills and property rates, a telephone allowance, reduced public transport fares and reduced motor vehicle registration costs.

A Progressive Financial Solutions adviser can help you calculate and determine how much social security benefits you may be entitled to receive.