Choosing the right Pension

The different features of the Age Pension and the Disability Support Pension explained

Choosing the right Pension

Debbie McTaggart explains the different features of the Age Pension and the Disability Support Pension for those in need.

Q. Margaret
I am approaching 65 and have been contacted by Centrelink to see if I wish to move from my Disability Support Pension (DSP) to an Age Pension. I am not sure which option is better for me. Can you advise the difference between these entitlements?

A. If you are receiving a DSP and are approaching Age Pension age, you will receive a letter from the Department of Human Services asking if you wish to switch to the Age Pension. This is an important decision as once you switch, you can’t revert to a DSP and you may lose some of your allowances.

The Age Pension is generally the most appropriate payment for people who are over Age Pension age. The rate of payment, income and asset tests and concession card provided to age pensioners are the same as for the DSP. Also, once you reach Age Pension age your payment will become taxable, whether you remain on DSP or transfer to an Age Pension.

To help clarify which may best suit your individual needs, it is worth understanding the following differences:

Age Pension

  • there is no medical eligibility review
  • if you are a carer, you may also be entitled to a Carer Allowance if you are on the Age Pension
  • there is no limit to how many hours you can work or volunteer
  • if you are intending to spend an extended period of time overseas, then the Age Pension is more generous
  • you can have more land exempted from the asset test under certain circumstances

Disability Support Pension

  • the higher rate of the mobility allowance is not paid to those on the Age Pension
  • if you are single and sharing private accommodation, you may be eligible for a higher rate of Rent Assistance
  • if you are studying you may be entitled to the Pension Education Supplement
  • Incentive Allowance is only paid to DSP recipients

Possibly the most compelling reason to switch to the Age Pension is if you plan to spend more than six weeks overseas. Changes which came into force on 1 January 2013 mean that, after six weeks, your DSP will be stopped unless you meet certain criteria. If you switch to the Age Pension you can remain outside of Australia for up to 26 weeks before your pension is affected. However, if you leave Australia within two years of switching to the Age Pension, then your pension will be stopped altogether.

You can find out more about how your pension will be affected if you travel overseas by reading the YOURLifeChoices article, Will I get a pension overseas?

You should contact Centrelink before making any decision to switch from one payment to another. Your individual circumstances will be taken into account and you will receive detailed information on how you will be affected.


    To make a comment, please register or login
    5th Jul 2013
    The National Disability Insurance Scheme which we are all paying for is going before Parliament at present. A person listening to a panel discussion last Friday was curious as to why the CEO of Disability Services Australia was less than enthusiastic about the Scheme in its present form. It was pointed out that anyone 65 years or older would not be covered by the scheme, the reason being it would make the scheme cost prohibitive (given an aging population etc). If you have a disability at the time you reach 65 years of age you will be covered for the benefits of the scheme when you pass age 65. If you become disabled at age 65 or over you will not be covered and there is no other safety net scheme to provide support and services other than present State and private Health Insurance product/services. Don't have a stroke or get osteoporosis, dementia, etc after age 65 as there will be no Federal assistance
    6th Nov 2014
    Yet people will be required to the age 70 now 67
    This is nothing but age discrimination.
    5th Jul 2013
    I vividly recall receiving that same phone call from a very fine sounding young man from Centrelink. I had just ceased radiotherapy treatment for a very nasty malignant tumour (are there any other types?) and starting the long haul back.
    I had been on the DSP for around 12 months and was just about to turn 65. The phone calll came as quite a surprise, for which I was clearly unprpared.

    After a moments thought, my first answer to this young man was, are you asking me to choose between being sick and disabled, or being old? We shared a great laugh, so, I chose the latter with alacrity without even considering the repercussions. Gladly and gratefully, I have not become sicker and more disabled and am now just "getting older".
    5th Jul 2013
    Can someone please tell me what the pension age for stopping work is... I was born in 1959 and have been told I will have to retire later than age 60!!!!
    6th Jul 2013
    I think you will find it is 65 now. I was born in 1946 and had to be 64 to get the aged pension.
    5th Jul 2013
    I found the paperwork was the absolute FASTEST ever encountered with the department.!!!! Wham, Bam, Done, all within one (1) week!!!
    I am still amazed.
    7th Jul 2013
    Anyone born after 1956 will be 67 years old to get aged pension.
    8th Jul 2013
    So that means my age pension has gone up by 7 years !!!! Because I was supposed to be 60!! Not impressed with that...
    14th Sep 2013
    And if you are working you will be paying for NDIS to 67 but will not be covered by it after 65
    Plain discrimination against the aged - sure am glad that the taxpayer pays a salary to a minister for the aged who seems to be only interested in collecting salary but does nothing for the seniors
    Ageing but not Old
    11th Jan 2014
    I was born in 1949, female, so my retirement age is 65, I believe. However, I have been looking for p/t work for over two years, (while being on the DSP). I am desperate to find work for a number of reasons: Among which is the fact that I will lose the mobility allowance once I turn 65, as I was told I will be FORCED to switch to the aged pension at that time. That is a $120 a fortnight drop in income if I'm still looking for work. I'm just covering my regular bills/outgoings with only a little left for expenses such as repairs for my 21 year old car, which I sometimes have to use for job applications/interviews etc. No extra for anything over $50 per fortnight puts me in the red, pretty much. I'm not sure I can stay on the DSP even IF I am working at that time! Because of my disabilities, I don't think I can handle a full-time job, but losing the little bit extra will leave me in the same spot, or possibly worse off, since I also will have tax payable on a job income, etc.

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