It’s best to check your entitlements with Centrelink or speak to a TelstraSuper Financial Planning Adviser to determine how spending your super could affect your Age Pension.

However, generally speaking, when you apply for the Age Pension, Centrelink applies both the income and assets tests. You will then be paid based on whichever test results in the lower payment. For example, if your payment was $640 per fortnight under the assets test but $625 under the income test, you would be paid the lower amount that applied under the income test. 

How super fits into the calculation

Once you have reached Age Pension eligibility age, your superannuation will be assessed under the income and the assets tests. Or if you purchase an account based income stream, the balance is assessed as a financial asset under the assets test and deemed to earn income.  

If you take all your super as a lump sum and spend it - then it won’t count towards the income test or assets test, however you will then be more reliant on the Age Pension which may not be enough to support your lifestyle. Spending a larger amount to qualify for a higher Age Pension may not be the best strategy in the long-term. 

Getting the right balance of super and Age Pension

In order to maximise your income in retirement, having a mix of super based income and the Age Pension may result in your money lasting longer.

When you receive the Age Pension you get access to a Pensioner Concession Card (PCC). Holders of a PCC can access concessions on prescription medicines, rates, car registration, utilities and much more.

The income from your super may not be fully replaced by the Age Pension so ensuring you don’t run out of super too soon is important. 

We can help you get the right balance

TelstraSuper Financial Planning has a team of Advisers who can sit down with you and work out what Centrelink benefits you may be eligible for. If you’d like to discuss Centrelink and your super or if you have any other financial advice queries contact us on 1300 033 166 or fill in our online contact form to book in an appointment with a Financial Adviser and have an initial discussion to see if you could benefit from getting advice.

Want to learn more?

The Age Pension and planning for retirement is complex and there’s a lot to think about.  Our online retirement modules can help you work through some of the key things to consider when planning for your lifestyle when you finish working. Each module takes around 5 minutes to complete, but could save you a lot of time and hassle down the track.

VISIT MODULES