The key to maximising your Age Pension comes from understanding how different types of assets and income are treated by Centrelink. The family home, for example is generally exempt.
Pre 2015 Pensions
Superannuation income streams have traditionally been very helpful for pensioners who have too much assessable income. This is because Centrelink ignore a proportion of the income that is drawn from super pensions that started prior to 2015 . In many cases they ignore all of the income that is being drawn.
Since January 2015, new super pensions are treated the same as bank accounts, shares and other financial assets – they are ‘deemed’. This means Centrelink will assume the account is earning income at a prescribed rate (currently up to 3.25%pa) – regardless of the amount actually drawn.
If you have an account that was opened before 2015, you will continue to enjoy the existing rules unless you rollover to a new account.
Furthermore, should you do anything that would cause you to lose your pension temporarily (such as take on a new job), your super pension would switch to the new assessment regime when you re-apply for the age pension.
As such, it’s important that you take care not to do anything that would cause your pre-2015 super pension to be re-assessed, or you could be in for a rude shock.
Centrelink assessment and super pension structures can be complex, so it is essential that you seek professional advice before acting.
Please call me to discuss further.