Centrelink and retirement

With the right advice, even the most financially prepared retiree may be able to receive some Government support in the form of a part pension or benefit card.

The purpose of Social Security is to support Australians in retirement. Obviously, some individuals will qualify for more support than others, but you may be surprised at the various ways in which Centrelink can help. Even qualifying for a Commonwealth Seniors Health Card could save you money.

Financial planning experts can help you structure your retirement income to ensure that you can take advantage of the Government support that you have earned. To make an appointment with Telstra Super Financial Planning you can call Telstra Super on 1300 033 166 or request an appointment online.

Can I qualify for Government assistance?

Below we discuss the more commonly accessible forms of Centrelink support – the Age Pension and Commonwealth Seniors Health Card, but depending on your circumstances you may also qualify for one of the following payments:

  • Pension Loans Scheme - for people of Age Pension age whose capital is tied up in assets.
  • Pension Bonus Scheme - for people who defer claiming the Age Pension and continue to work.
  • Utilities Allowance - help in meeting the costs of regular bills such as gas, electricity and water.

     

    Detailed advice on the full range of options offered by Centrelink can be found at Centrelink.

    Age Pension

    The Age Pension exists to provide an income for people who have reached retirement age, are no longer working and have little or no retirement income.

    The maximum pension rate as at 20 March 2010
    Single $644.20* per fortnight
    Couple $485.60* (each) per fortnight

     * These amounts exclude a pension supplement that is currently: single $56.90, couples $85.80 each.

     You may qualify for the Age Pension if you:

  • pass both the Income and Assets tests
  • are an Australian resident or meet other residence requirements
  • are male aged 65 years or over
  • are female and above the qualifying age.

     Date of birth  Qualifying age
    Before 30 June 1944 63
    1 July 1944 to 31 December 1945 63.5
    1 January 1946 to 30 June 1947 64
    1 July 1947 to 31 December 1948 64.5
    1 January 1949 and later     65

    Income test

    To receive the maximum pension amount your fortnightly income must not exceed the limits set out below. Income over these amounts reduces the maximum pension payable by 40 cents in the dollar for a single person, and 20 cents in the dollar each for couples.

    Income you may earn to receive pension payments

      Maximum pension Part pension*
    Single  up to $142.00 less than $1,544.20
    Single plus 1 child up to $166.60 less than $1,669.85
    Couple up to $248.00 less than $2,362.00
    Illness separated couple up to $248.00 less than $3,052.40
    Additional children add $24.60 per child     

    * This figure may be higher if you are eligible for Pharmaceutical Allowance. These figures may be higher if you also qualify for Rent Assistance.

    Assets test

    To receive the maximum pension amount your assets (excluding your primary residence but including your retirement income stream balance) must not exceed the limits set out below. Assets over these amounts reduce the maximum pension payable by $1.50 per fortnight for every $1000 above the limit (single and couple combined).

    Assets test for home owners to receive pension payments

       Maximum pension  Part pension*
    Single up to $178,000 less than $645,500
    Partnered† up to $252,500 less than $957,500
    Illness separated couple† up to $252,500 less than $1,187,500
    One partner eligible† up to $252,500 less than $957,500

    Assets test for non-homeowners to receive pension payments

       Maximum pension Part pension*
    Single up to $307,000 less than $774,500
    Partnered† up to $381,500 less than $1,086,500
    Illness separated couple† up to $381,500 less than $1,316,500
    One partner eligible† up to $381,500 less than $1,086,500

    * Pharmaceutical allowance included. These figures may be higher if you also qualify for Rent Assistance.
    † Combined

     

    Additional payments and benefits you may be entitled to as an Age Pension recipient:
  • Pharmaceutical Allowance
  • Rent Assistance
  • Telephone Allowance
  • Utilities Allowance
  • Remote Area Allowance
  • $500 Advance Payment of Age Pension
  • Pension Concession Card.

      Commonwealth Seniors Health Card

      The Commonwealth Seniors Health Card is only available to self-funded retirees who are not receiving any Age Pension. While you still need to qualify based on an income limit, it is a lot more generous than the test for the Age Pension.

      As a Commonwealth Seniors Health Card holder you are entitled to:

    • a discount on prescription medicines
    • bulk-billed GP appointments (at the discretion of the GP)
    • a reduction in the cost of out-of-hospital medical expenses, above a concessional threshold.

        You may also be entitled to (as at 1 January 2010):

      • A Seniors Concession Allowance – $196.30 paid quarterly.
      • A telephone allowance – $23.40 paid per quarter. A higher rate of telephone allowance applies if the retiree has a home internet connection and this amount is $35.20 per quarter.

         

        To receive a Commonwealth Seniors Health Card, your taxable income* must not exceed these limits:

        Single  $50,000
        Couple† $80,000
        Illness separated couple† $100,000
        Dependant children Add $639.60 per child

        * Currently, income from superannuation retirement income streams such as Telstra Super RetireAccess, will not be counted as taxable income for the purposes of the Commonwealth Seniors Health Card.
        † Combined

         

        How do my income stream payments and withdrawals affect my Centrelink payments?

        If you receive income payments from an income stream like Telstra Super RetireAccess, you have the flexibility to change the amount of your income payments and make additional withdrawals. Payments from an income stream such as Telstra Super RetireAccess are likely to count as income for purposes of determining your eligibility to receive the Age Pension and other Centrelink benefits.

        Regardless of whether or not your payments are tax-free or taxable, if you are the recipient of a Centrelink benefit or hold a Commonwealth Seniors Health Card you need to let Centrelink know whenever you make a change to the income payments you are receiving or make a lump sum withdrawal.

        If your annual assessable income increases it may mean that you no longer qualify for the benefit. Conversely, if your income decreases, you may be entitled to additional benefits.