22nd Feb 2019
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Can you get Age Pension in a couple if your partner is working?
Author: Ben Hocking
Can you get Age Pension in a couple if your partner is working?

The application form for an Age Pension requires details of your partner. You must provide the identify details for your partner, even if your partner is not old enough to be applying for an Age Pension. Thus, you must provide personal data regarding both members of the couple even though you are asking for an Age Pension for only one partner.

When you reach the Age Pension age and your partner has not, you will still be assessed under the income and assets test as part of a couple, and will receive the couple's rate of Age Pension, one member eligible.

If your partner does not work and is not eligible for an Age Pension, they may be eligible for Newstart Allowance. 

What does Centrelink mean by ‘couple’?
Centrelink defines a couple as any two adults who share domestic arrangements and present socially as ‘a couple’.

For Centrelink purposes you are considered to be a member of a couple if you and your partner are living together, or usually live together, and are:

  • married; or
  • in a registered relationship; or
  • in a de facto relationship

Centrelink does not consider you a member of a couple if you are living separately and apart on a permanent or indefinite basis. Although you can still be a member of a couple if you are not physically living with your partner.

A member of a couple is determined by circumstances including:

  • financial aspects of the relationship
  • nature of the household
  • social aspects of the relationship
  • any sexual relationship
  • nature of the people's commitment to each other.

Can you apply for a special exemption?
If Centrelink decides you are a member of a couple, but you believe this will cause you unfair hardship there are special provisions in the Social Security Act, where you can apply to be assessed as a single.

In situations where the department considers that there is a special reason in the particular instance, and it would be unfair to administer the rate of payment, or income and assets test provisions that apply to couples, the Secretary can determine, under the provisions of section 24, that the person should not be treated as a member of a couple.

When section 24 is applied, the person is deemed NOT to be a member of a couple and is treated as a 'single' person for all purposes of the Social Security Act. As a result, the person is paid the single rate of payment and only their individual income and assets are included in the assessment of the rate of their payment.

It is not possible to predict all the situations where section 24 should be applied as the circumstances of each particular situation need to be considered on a case-by-case basis.

Three questions that need to be considered as part of the assessment while looking at the full circumstances of the case are:

  • Is there a special reason to be considered in this couple's circumstances?
  • Is there a lack of being able to pool resources for the couple as a result of the circumstances?
  • Is there financial difficulty as a result of the couple's circumstances?

Case study
Yanni met and married Connie while on a 12-month holiday in Greece. Yanni is an Australian resident, while Connie is a Greek resident. Yanni and Connie have decided that they wish to settle in Australia. Yanni returns to live in Australia, but Connie must remain behind in Greece pending consideration of her application for Australian residency. Yanni applies for the Age Pension, but Connie can contribute nothing to the relationship financially. The couple has no other financial resources and are in financial difficulty.

In this situation it may be appropriate to treat Yanni as not being a member of a couple and grant the Age Pension at the single rate.

Assessing your eligibility
As you may know, your Age Pension eligibility is calculated by applying both the income and assets tests, with the resulting lower payment determining under which rules you are paid. If, under either of the calculations the resulting payment is $0, then you will not receive an Age Pension.

Currently, the income threshold for a couples Age Pension is $79,736.80, however, this includes income from investments.

The assets test, like the income test, has two thresholds and is split into two categories. The full Age Pension is received when a lower assets test threshold is not exceeded. This threshold for non-home owners couples is $594,500. For home-owning couples, the lower threshold is $387,500.

Centrelink asset test limits for Allowances and full Age Pensions from 1 Jan 2019

Situation

Homeowners

Non-homeowners

Single

$258,500

$465,500

Couple (combined)

$387,500

$594,500

Illness separated (couple combined)

$387,500

$594,500

One partner eligible (combined assets)

$387,500

$594,500


Once the lower thresholds are exceeded a person or couple's entitlement to the Age Pension is reduced by $3 a fortnight for every $1000 their assets exceed that threshold. No Age Pension is received once an upper threshold is exceeded. The upper threshold for non-homeowner couples is $1,027,000. For couple homeowners the upper threshold is $848,000.

Centrelink asset test limits for part Age Pensions – effective from 1 Jan 2019

Situation

Homeowners

Non-homeowners

Single

$564,000

$771,000

Couple (combined)

$848,000

$1,055,000

Illness separated (couple combined)

$998,500

$1,205,500

One partner eligible (combined assets)

$848,000

$1,055,000

How is superannuation assessed in this situation?
While one member of a couple is not of pension age, you may be eligible for a higher rate of pension during this time. This is because any superannuation held in the younger partner’s name is not counted as an asset until they reach Age Pension age.

In this situation the age pensioner will only have the value of their superannuation counted under the assets test and the net value of the pension they receive, after deducting the purchase price of the pension, under the income test. The partner who is not of Age Pension age will not have the value of their superannuation counted unless they are receiving a pension.

Case Study
Michael is applying for the Age Pension has he will shortly reach eligibility age. But Sarah his partner will only be 63 when Michael reaches Age Pension age.

Sarah continues in her part-time teaching job as she enjoys the work and earns $30,000 per annum as a permanent part time teacher.

Michael has $240,000 in his superannuation fund account. Sarah has $180,000 in her superannuation account but this amount is not included as she has not reached pension eligibility age.

Michael and Sarah have other financial assets of $45,000 in bank accounts and they own their own home, have two cars plus a caravan. The ‘garage sale’ value of their personal items, household contents, vehicles and recreational items amounts to $60,000 and they have no outstanding debts and their tax affairs are in order.

Michael and Sarah are considered a homeowner couple by Centrelink. Their financial assets will be $285,000 and their other assets are valued at $60,000. For the Age Pension means test, Michael and Sarah are homeowners with assessable assets of $345,000.

Their annual assessable income consists of Sarah’s salary of $30,000 and $7988 of deemed financial income.

The current asset test limits for the full Age Pension (accurate from 1 Jan 2019) for a home-owning couple are $387,500 and Michael and Sarah’s total assessable assets ($345,000) are under this threshold. However, to be eligible for the full Age Pension payment they would also need to receive less than $304 a fortnight in income. Their $37,988 annual assessable income actually equates to $1461.08 per fortnight, meaning that Michael, would instead qualify for only a part pension.

To make the most of your money in retirement, first you need to know the rules. The PensionChecker™ tool has all the information you need.





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