How Centrelink runs the ruler over your superannuation

Centrelink uses a glad bag of rules when assessing super: Here are some of them.

How Centrelink assesses your super

If you are applying for or receiving Centrelink payments, your superannuation balance will not be taken into consideration if you haven’t reached Age Pension age.

When you do reach Age Pension age, your superannuation is counted in the assets and income test.

What you do with your superannuation is up to you, but the way you employ the funds will be taken into consideration when Centrelink assesses your financial situation to decide if you are eligible for a payment.

When you retire, you can ask your super fund to pay the money into your account as a lump sum or as pension. You may also decide not to draw on your balance.

Your super balance is assessed under the asset and income test. If you are part of a couple and your partner is under Age Pension age and their fund is not paying them a pension, then their super balance is not counted in the income and assets test.

If you are drawing an income stream from your super, how Centrelink assesses it will depend on whether the funds are exempt or partly exempt from the assets test, asset-tested long term or asset-tested short term.

Under the assets test, the balance on the latest statement from your superannuation fund is the amount that is assessed.

Under the income test, Centrelink uses the gross payment you get, minus your capital returns, if the income stream is:

  • non-account based
  • account based, if it started before 1 January 2015 and you got a pension or allowance without a break since 31 December 2014. 

Otheriwse, Centrelink will apply deeming rules to your superannuation under the income test. These are an assumed estimate of what your financial assets are earning in interest. Find out more about deeming and the current rates.

Exemptions to the deeming rules can be obtained if your super is fully preserved or inaccessible.

This information is general only, because the factors taken into consideration when Centrelink assesses your super can vary from one individual or one type of super balance to another.

To receive advice tailored to your particular situation you should visit a Centrelink service centre or call the Financial Information Service.

All content on the YourLifeChoices' website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care, but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness with regard to your circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances. Financial comments provided by readers cannot be relied on as professional advice, but as general comments only.

Are you eligible for an Age Pension? Do you know your rights? The RetirePlanner™ tool has all the information you need. 

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    COMMENTS

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    Sundays
    25th Apr 2018
    7:55am
    This information is incorrect. If you have reached pension age your superannuation is counted as an asset by Centrelink whether you are drawing a pension or not and the amount you have is deemed. The only exceptions are people who began an income stream before 1 January 2015 as they are assessed under grandfathered rules. I would like to know where YLC got the information that says that if your fund is not paying you a pension the balance is not counted in the income and asset test and that sentence contradicts the earlier correct statement.
    tj
    25th Apr 2018
    11:48am
    Thought the same as soon as i read the piece about ''you can ask not to receive a pension'' When i applied for the OAP i had to have a consultant from my super fund to arrange my affairs so i could receive a part pension (as i didn't qualify for sole pension as i have a wife of not OAP age yet) along with an income stream as well .Was told that is the way it is ,if you have super you have to use it .
    McDaddy
    25th Apr 2018
    12:16pm
    I think there is a heading missing from the large gap in the text above, which should read something like" if you haven't yet reached Age Pension age........"
    Sundays
    25th Apr 2018
    12:57pm
    Tib, look at the first sentence underneath the 2nd photo
    Tib
    25th Apr 2018
    1:07pm
    It mentions "When you do reach Age Pension age, your superannuation is counted in the assets and income test."
    The other comment probably applies to other payments such as disability if you are over 55.
    Tib
    25th Apr 2018
    1:21pm
    But I agree it could be clearer.
    Old Geezer
    27th Apr 2018
    11:55am
    Your super is only counted before you reach retirement age if you are drawing an income stream for it. If it is still in the accumulation mode then it is not counted. That is how many couples get the OAP as they have all their money in the person who is below retirement age super account.
    Cheezil61
    25th Apr 2018
    8:18am
    Interested to see other comments here. I'm 3months away from preservation age (57 in July this year), still work fulltime & hoping to quit or change jobs around 60yo but so confused by all the Centrelink & Super info available everywhere, it's so hard to know what to do/how to plan! How do you find trustworthy (& budget friendy/inexpensive) personally tailored financial advice from ONE place??
    The system is bs for a non intelligent being such as myself. Familiarity & lack of time to learn & restore the magnitude of necessary info a big part of the problem...
    Doomed to fail & be poverty stricken forever I guess!
    Cowboy Jim
    25th Apr 2018
    9:43am
    When we were your age we went regularly to the information sessions organised by C/Link's financial advisers. These sessions are free but you are required to register and book; looks like they wanted the groups small in numbers and individual questions could be adequately addressed. We learned a lot from these meetings but it is hard to plan anything these days with the Govt. changing the goal posts constantly. C/Link frequently advertises these sessions in your local free papers.
    tj
    25th Apr 2018
    11:50am
    Don't forget you cant get the OAP at 60
    Sundays
    25th Apr 2018
    11:55am
    Also, your superannuation fund is likely to run free seminars. They usually advertise on their website, but contact them for more information. Their website will also contain calculators you will find useful. You may have reached your preservation age, but won’t get any old age pension until you reach 67. Yes, you can withdraw your super, if you are permanently retired but will it last 10 years. A better option would be to pay off your mortgage, and other debt. If you can, keep working and salary sacrifice extra into super. To have a reasonable retirement you need to have no debt and a nest egg if possible.
    McDaddy
    25th Apr 2018
    12:17pm
    https://www.humanservices.gov.au/individuals/enablers/about-financial-information-service
    Anonymous
    25th Apr 2018
    1:03pm
    Cheezil, I agree with other comments here. If you go to your nearest Centrelink Office, they will give you the date and time of their next seminar, designed for retirees/near retirees. They also have financial advisors who can help as well, in a face to face situation. I also relied on advice from a planner employed by my super fund (no cost to me), which I found extremely helpful and useful - maybe you should enquire if your own super funds provides such a service.
    McDaddy
    25th Apr 2018
    1:05pm
    Centrelink staff who provide this information are NOT advisers, just to be clear.
    Rae
    25th Apr 2018
    1:07pm
    Go to your local library and grab a few of the thinner books on superannuation, budgeting and saving. I found "The Richest Man In Babylon" helped me the most.

    I read it years ago now but it explains very quickly how a minimal change in lifestyle can result in huge benefits.

    The worst mistake is making the smallest payment. You should get the mortgage finished ASAP.

    Sometimes changing jobs is as good as a holiday. Why wait? You could start looking and applying for a new position right now.

    The added bonus may be a long service payout or some such that could be thrown at any debt or used to top up savings.

    10 years seems like a lifetime if your not happy in your work. It can pass surprisingly quickly if you have plans and something to aim for.

    Make sure a little money is being put by to pay for a trip somewhere as a reward when you hit 67.

    Don't sell yourself short. You're doing well to have a job and to realise you need future planning but watch out foe those who want your money. Your posts present a smart woman who can get there by yourself just fine.
    Tib
    25th Apr 2018
    1:19pm
    Be careful with financial advisors who have a whole lot of products to sell you. Your super fund may help you or Centrelink. If you get the wrong advisor and you don't know what your doing, you may never retire.
    JB
    25th Apr 2018
    2:39pm
    It is all very confusing wondering what to do especially if you are single . Either way I bought the book by Scott Pape “The Barefoot Investor” . It answers lots questions and is a good read as well . Good luck .
    Tib
    25th Apr 2018
    3:29pm
    JB why does being single make it more confusing?
    Cheezil61
    25th Apr 2018
    4:00pm
    Thanks all,
    Cowboy & Sundays, that info is helpful re sessions at C/Link & Super providers however I am 4 hours away from the city & not much available locally (& a long trip to city when working full time shiftwork & not much spare time at all unfort, but worth checking out.

    No OAP til 67 (current rules) as tj mentioned but pretty sure I'll be on deathbed (thanks to the shitty job!) by then anyway. Hoping to wing it with the super I have (3yrs wages worth, but making it to last approx 10yrs, hmmm) & understand I will be poverty stricken, even if I can get Newstart, which I doubt ($300 per fortnight is tricky even if mortgage is paid by then & no Disability available for me (mental illness) I daresay.

    "Sundays" I am currently salary sacrificing max allowable amount of super p.a ($25,000 without penalty) so no option to increase unfort. However I am hopeful the mortgage will be clear by 60yo (one bonus amongst the negatives).

    McDaddy thanks, I will check that link out, it looks helpful also.

    Rae that book sounds like a good idea. I'm currently in a well paid job & will hopefully get some meagre entitlements or possibly a redundancy on finishing up (tho not sure if that will be a good thing or hinderence with Centrelink?) & am currently paying a lot of this current salary off the mortgage (that lifestyle change has kicked in since last relationship split, am getting pretty good at budgeting & going without a lot of the things others don't go without lol) My forecast for having the mortgage paid out is around 18months time.
    PS thanks for the kind words Rae.

    Tib I was thinking the same re Financial Advisors, worrying.

    JB thanks, that also sounds like a good idea (Scott Pape well known)

    Ok so I'm not doing as badly as many but was feeling pretty negative & without hope (would been different story if I had not had to pay out 2 exes $100,000 each in property settlements) but this advice is all very helpful, thankyou so much!
    Tib
    25th Apr 2018
    9:02pm
    On the property settlement thing , I feel your pain. Love is a many splendid thing .. If you can afford it.:)... should of bought a dog.
    eggs and co
    25th Apr 2018
    2:36pm
    Talking to some friends recently who had retired directly from an Australian Public Service onto a "defined benefit scheme" superannuation pension, I was told that they are no longer eligible for a part pension. It appears this cost saving idea in 2014.
    Sundays
    25th Apr 2018
    5:51pm
    Don’t worry about them too much eggs and co. The rules were changed, and it was unfair. However most people on Defined benefits too a cut in the OAP. If they get nothing it’s because their income is over $1983.20 a fortnight if single and $3036.40 if a couple. They’re doing ok

    25th Apr 2018
    3:16pm
    Gobbledegook from those who make the rules, doubtless motivated to confuse and hand out as little as possible.
    JB
    25th Apr 2018
    5:07pm
    Sorry TB didn’t mean it that way . Sometimes if you are on your own with no one to discuss it with it can be a bit stressful. This doesn’t apply to me but I found my sister being by herself had a lot of questions regarding retirement etc . Didn’t mean to offend
    Cheezil61
    25th Apr 2018
    6:15pm
    I was not offended by your comment JB, in fact agree, it can be harder guiding the ship alone with this sort of thing & sometimes feel it would be helpful to discuss as a team if I had a team lol...(that's not to say I want to be on a team)
    Rae
    26th Apr 2018
    9:35am
    Just be careful Cheezil as there are many who would love to get at your savings and the nice commissions they could make from it.

    Forewarned and forearmed is always a good idea.
    JO
    27th Apr 2018
    11:52am
    Financial Information Services Officers at Centrelink will book in office as well as telephone interviews. Also if not on a defined benefit pension, you should consider an Industry Fund to manage your a super /pension. See recent ratings ones such as Australian Super, Host Plus etc are good return with minimal fees. Is all about the fees as you can pay more fees in retirement on your sum than whole time working, even more important if share market dips and returns lowered most non industry supers you still pay high fees as based on balance not earnings. (Learned from Scott Pape The Barefoot Investor)
    Cheezil61
    27th Apr 2018
    8:58pm
    Good info, thanks
    Tzuki
    28th Apr 2018
    10:53am
    There are a lot of more knowledgable people than I am here - I am so confused re all the OAP/Super rules. I am 63 1/2 and my husband is retiring in Dec. I am unemployed and have been looking for a job since being retrenched (casual for 8 years, so no payout) 3 years ago. It has been hard and I am concerned if I qualify for a govt pension of some sort when my husband retires in December or if I have to apply for Newstart. Do any of you know please?


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