Can you get Age Pension in a couple if your partner is working?

How will you be assessed as a couple? Check your eligibility here?

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.





    COMMENTS

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    Sickofit
    18th Nov 2019
    9:45am
    Why do they make it so bloody complicated!
    OJ21
    18th Nov 2019
    10:27am
    Obvious. They want to deter people from claiming. Have you ever known our Government to help anybody except themselves and their rich friends?
    PJ
    18th Nov 2019
    9:58am
    I'm 65 and my wife is 64 years and 11 months. We will have to go through this nonsense next year - It is pure lunacy!!!
    radish
    18th Nov 2019
    10:22am
    Good morning.
    The calculations in this article are incorrect.
    The current assets limit is $394,500 for a full pension; the fortnightly income limit from all sources is $308 per fortnight ($8008 per annum); the assets test based reduction in pension for a couple when only one member receives the pension is $1.50 per fortnight per $1,000 of excess assets ($1.50 per $1,000 per member receiving the pension). As for the deemed income calculated in the article, it's actually $6,826 not $7,988 . And the $79,736.8 income threshold for the pension? The maximum income for even 50 cents of pension 'when both members are eligible is $8008 plus ($703.5x2x2x26) which equals $81,172 per annum. My sources? Social Security site on the internet. Check it out - its very good.
    Horace Cope
    18th Nov 2019
    10:40am
    And perhaps the assessable income is incorrect. As Sarah is a part-time teacher she will only be paid when she works and not for the 12 weeks of holidays. This is what has caused so much angst with robo-debt which looks at an annual income and divides by 26 to achieve the fortnightly income.
    Sundays
    18th Nov 2019
    4:06pm
    This seems par for the course lately with YLC, with a lack of attention to detail. People are relying on the information to make informed choices. It should be correct. Together with pushing certain barrows eg including the family home in the Asset Test and self serving Podcasts the site no longer seems to represent its target audience
    tobymyers
    5th Jun 2020
    12:37am
    I'm having trouble following all this.
    My understanding is that the threshold of 304 dollars per fortnight is what you can earn before being assessed so that would mean they would assess the income as $30,000 less the $8,000 which makes it $22,000 not $38,000 because your are allowed to earn $8,000 before any income over that amount is assessed.

    Also it doe not explain why they would only pay a part pension based on a married couples rules both being of pension age when in fact there is only one of pension age and if his wife was not working she could collect Newstart which would not be used in the income calculation ?
    So it seems to me the wife would be on Newstart , the man would be on half married rate and there would be no assessed income because the department would have to pay them $1400 if they were both of pension age so surely the Newstart plus the half pension is below the $1400 so why would they penalise them further because the wife works ?

    The Newstart plus half pension would be roughly $1,000 per fortnight paid by the department versus $1400 so it makes little to no sense for me
    Pollyanna
    18th Nov 2019
    10:39am
    I believe they make it very confusing too and very difficult to understand. Can you in every day English tell me if someone is on a disability pension and renting a unit and in a defacto relationship where the man makes a lot of money. Will the woman on the disability pension lose her pension if they get married
    Pollyanna
    18th Nov 2019
    10:39am
    I believe they make it very confusing too and very difficult to understand. Can you in every day English tell me if someone is on a disability pension and renting a unit and in a defacto relationship where the man makes a lot of money. Will the woman on the disability pension lose her pension if they get married
    Mariner
    18th Nov 2019
    10:47am
    Went through that some years ago, wife being 4 years younger. Before age 65 I shifted all my super into her account, she stopped work (quite happy to). Her super was not reportable and I got the married/partner pension and she got nothing but her name on my pension card for medicines. After wife turned 65 her super became reportable and we both ended up on a part pension. When one partner keeps working it becomes complicated, more so if the wages are not in a steady stream.
    Mariner
    18th Nov 2019
    11:10am
    Section 24 is a funny item. A mate married a woman 10 years older when he was 30. After the wife turned 65 he realised she wouldn't get a pension - they went thru some tribunal stating that they no longer have conjugal relations and should be treated as 2 singles. They were granted their wishes and for years now the situation has not changed although he is well over 65 himself. So they keep happily living together in a 2-bedroom unit on 2 single pensions (difference of about $10'000 per year). Should robo debt ever show up they do not have a bean to pay back. OK you guys out there, there might be a way to upsize your income by using Section 24. Did not even know that existed till my mate told me about it.
    tobymyers
    5th Jun 2020
    12:45am
    I think that is the only solution as it seems being married leaves you open to discrimination against you by Centrelink .I know it would be hard to say lets divorce but it may be better to say you have separated physically and emotionally, don't know about the tribunal these days but there are forms you can fill in and let Centrelink decide and then if you are not happy with their decision go back to Section 24 and lodge an appeal claiming hardship.
    Mez
    20th Nov 2019
    1:45pm
    It appears that Centrelink staff are not properly qualified to give advice because their advice varies from person to person within the staff although printed matter is inconcise as well as contradictory in some cases so no wonder there are conflicting opinions!
    Pollyanna
    21st Nov 2019
    9:19am
    You are so on the ball Mez. Thank you
    Pollyanna
    21st Nov 2019
    9:19am
    You are so on the ball Mez. Thank you
    tobymyers
    6th Sep 2020
    2:41pm
    Most of these calculations border on insane to stupid .

    I keep saying it and I will stick by it.
    Many countries assess everyone as a single entity .
    This business of over complicating payments, reviewing , and assessing is pure unadulterated bullshit that cause financial and mental and emotional harm to pensioners,
    Forget the idea od a relationship affecting payments that is stupidity.
    Many relationships today do not fall into the departments idea of what is a relationship and how it affects your eligibility to pension .
    They assume that both contribute or one contributes more than the other when in fact this is rarely true.
    Then to say 2 people can live on $1200 when the individual would have $1800 is insanity,
    Also a single married rate makes no sense asking one to take a $200 to $300 cut in their pension because they have a piece of paper that says they are married.

    Indeed many couple keep income separate and only contribute to expenses together , so does this mean it is any different from taking on a border or two in a spare room ?
    Or even five individuals living and sharing expenses all receiving pensions ?
    If everyone was treated equally as a single then you would have no problems and could cut administration back saving millions of dollars a year.
    Centrelink and the government need to wake up .