23rd Oct 2017

Cash or shares: how is an Age Pension affected?

money stack

John is considering a venture into the share market but is unsure how his part Age Pension will be affected by making the switch from savings to shares.

Q. John

With almost $80,000 dollars in my bank account, I decided to put about $30,000 into shares, which would pay dividends fully franked, but am unsure as to how this will affect my part Age Pension.

A. Both shares and money held in a savings account are treated the same by Centrelink and are assessed under the income and assets test.

Under the assets test, it's the value of the financial asset that is assessed and under the income test, it's the deemed income that is counted.

Based on the above, it is unlikely that your part Age Pension will be affected by making such a change; however, this information is general only and you should confirm with a Centrelink Financial Services officer how your personal circumstances might be affected.

Related articles:
Deeming rates for Age Pension
Income and asset tests


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23rd Oct 2017
So for instance you bought 1,000 ANZ shares and received 1,000 x .80c each share every 6 months, so $1,600 would be income from assets, centerlink would deduct that from your payments.
23rd Oct 2017
Against the 3.35% deeming rate on the $30000 (now invested) and a deeming rate of 1.75% on the remaining $50000 ($975 + $875 = $1850).
23rd Oct 2017
A lot depends on how you are assessed, if you are on the asset assessment, you share asset would be deemed as earning whatever the deeming rate is, it's also worth remembering that if the shares are fully franked the tax paid on the shares is allowed to be claimed back, provided you haven't gone over the tax free allowance, using the figures provided the tax paid would be $480 if the company tax rate paid was 30%, I also believe Centrelink check twice a year to see if the value of you shares has changed.
23rd Oct 2017
Makes no difference whether it is in cash, shares or some other assets as all are deemed to be earning the deeming rate.
Nan Norma
7th Feb 2018
I think you might be wrong Bonny. A certain amount comes under the deeming rate and after that, you come under the asset rate which is higher.
23rd Oct 2017
What about the fortnightly amount one can earn without affecting the pension?
Cowboy Jim
7th Feb 2018
Reckon, income is income, never mind where it comes from. Even the $25 a week I am getting from an O/S pension is counted. But I think there is a difference applied if your income comes from work. Ask Centrelink as that could be something new.

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