Small rise in Age Pension numbers as exodus to Queensland continues

Fears of a huge ‘welfare’ bill as the population ages are proving unfounded, with the number of Age Pension recipients rising just 2 per cent in the past five years.

Data from the Department of Social Services confirms Queensland as “Australia’s retirement hot spot”, with four of the nation’s top five Age Pension postcodes in the Sunshine State. They are Bundaberg, Hervey Bay, East Toowoomba and Caloundra, and all have more than 10,000 age pensioners.

The Herald Sun reports that Victoria’s age pensioner numbers “are shrinking at the fastest pace in Australia as seniors head north or retire richer”.

Queensland added 36,858 age pensioners between March 2016 and March 2021, while NSW lost 1130 and Victoria lost 4512. Western Australia added 21,195 pensioners, South Australia 4503, Tasmania 2589 and the Northern Territory 1280.

The number of people with a Commonwealth Seniors Health Card (CSHC) has jumped 49 per cent to 424,500. CSHC holders must pass a ‘generous’ income test – a couple can earn $89,000 – and there is no restriction on assets.

Social researcher Mark McCrindle says the jump in cardholders proves “a rising number of seniors were asset rich”.

“The baby boomers are increasingly self-funded,” Mr McCrindle says.

“It’s a sign that superannuation is doing its job and property investment is doing its job.”

CSHC holders can access a growing number of discounts for transport, council rates and energy bills.

Read more: The crucial upcoming Age Pension change

Council on the Ageing Australia (COTA) chief executive Ian Yates told the Herald Sun more baby boomers were delaying retirement and working into their 70s, which made them ineligible for the Age Pension, at least initially.

“More people are retiring with more superannuation and other assets and may return to the pension system later.”

This backs up the Retirement Income Review findings that the Age Pension is affordable for the nation.

“The government and opposition ought to be thinking about reassuring future retirees that the pension is sustainable,” Mr Yates says.

Read more: Renovations and the Age Pension

Age Pension basics

What is the Age Pension?
The Australian government provides an Age Pension as a safety net for eligible citizens who cannot fully fund their own retirement through retirement savings. According to data from the Australian Bureau of Statistics, the Age Pension and other government pension payments remain the main source of income for most retirees.

How does the Age Pension work?
Managed by and paid for via Services Australia, or Centrelink as it is more commonly known, there are strict eligibility criteria, which include residency period, age qualification and an assessment of income and assets. This means not every Australian will be eligible for an Age Pension. How much you receive depends on how much other income you receive and how much your assets are worth.

Am I eligible for the Age Pension?
To be eligible for the Age Pension, you must meet certain criteria, which are assessed by the Department of Human Services, including:

Qualification age
From 1 July 2017, the qualification age for the Age Pension began to rise. It is increasing by six month every two years until it reaches 67 by 1 July 2023.

Residency requirements
When claiming the Age Pension, you must be resident in the country and must have lived in Australia as a citizen or permanent resident for a continuous period of 10 years, or for several periods that total over 10 years and include a continuous period of five years. There are certain exemptions, and you can find out more at servicesaustralia.gov.au

Income and assets tests (moneysmart.gov.au)
These tests measure your income (how much money you get) and the value of your assets (what you own, for example, any investment properties).

If your income or assets are above certain limits, your pension payment will be reduced, or you may not be eligible at all.

Your income includes money from:

  • employment
  • pensions
  • annuities
  • investments
  • earnings outside Australia
  • salary packaging.

Your assets include such things as:

  • investment properties
  • caravans, cars, and boats
  • business assets.

Your family home, if you live in it, isn’t counted as an asset. However, if you decide to sell, it could affect your pension.

If you have any assets overseas, their value will be converted into the equivalent sum of Australian dollars.

Easy ways to maximise your Age Pension, according to Retirement Essentials

Pay off the mortgage
Using savings or investments to reduce or pay off a mortgage cuts costs and usually increases Age Pension payments as assets decrease.

Renovate the home
Savings that are used to pay for renovations reduce assets and can improve your pension payments and increase the value of the home, which isn’t assessed as an asset. 

Limit gifting.
You can only give away $10,000 a year and $30,000 over five years before Centrelink assesses you as if you still have that money. Your pension will also be reduced.  

Do you understand how pensions work? Do you need expert help to understand retirement and pension payments?

Read more: Age Pension 2021 – what you need to know

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Written by Will Brodie



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