Lump sum pension withdrawal

Paula is considering withdrawing a lump sum from her allocated pension and would like to know if this will affect her Age Pension payment.

Q. Paula

I currently receive a part Age Pension. Please can you let me know if I decided to withdraw $5000 from my allocated pension, on top of the current drawdown of five per cent per annum, whether that $5000 payment would affect my Age Pension?

A. Any withdrawal from your allocated pension is unlikely to affect your Age Pension as it is already assessed by Centrelink in determining your pension payment. However, what you decide to do with the money may have an impact, such as buying an assessable asset, (e.g. a car), investing the money in an interest-paying asset (e.g. shares) or even leaving it in the bank.

If you intend to use the money for house repairs, travel or anything that is not currently assessed as an asset, then your Age Pension should not be affected.

You should clarify your situation with Human Services, which needs to be advised of any amount above $2000.

Written by Debbie McTaggart