Can Linda still receive an Age Pension after an inheritance?

Font Size:

Linda receives an Age Pension but is about to inherit a sum of money and wants to know how that will be assessed by Centrelink. 

Q. Linda

I am single, live in my own unit and am a full age pensioner. I have $140,000 in the bank. My boyfriend died in May and left me $400,000 in his will. Can you please tell me what will now happen to my pension? 

A. You will need to advise Centrelink of your inheritance and you should do so within 14 days of its receipt. Some lump sums are excluded from the income test, such as one-off payments that are unlikely to be repeated. Exempt items include:

  • A one-time gift
  • An inheritance
  • An irregular superannuation amount, such as commutation of a superannuation pension
  • Compensation and insurance payouts
  • The value of emergency relief
  • Certain redress payments – for example, historical negligence
  • A prize, reward or lottery win
  • Single or occasional gambling wins
  • A compensation payment you receive from an Australian trust. 

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.

If you have a Centrelink question, please send it to [email protected] and we’ll do our best to answer it for you.

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Overseas travellers may lose Pension Supplement

Overseas travellers who stay away for six weeks may lose Pension Supplement.

Age Pension: new thresholds from 20 September 2017

Changes to income and asset thresholds will take effect from 20 September 2017.

Age Pension – advance payments

A pension advance payment could help Tracy deal with a couple of unexpected bills.

Written by Janelle Ward

31 Comments

Total Comments: 31
  1. 0
    0

    Possibly the one way to keep your pension is getting yourself a more expensive dwelling
    thus using the inherited money to acquire a non means-tested asset.

  2. 0
    0

    The money might be excluded from the income test but not the asset test. Unless she spends some of it, new car, upgrade unit etc. she will lose some or all of her age pension.

    • 0
      0

      New car will result in loss also – not as much, as depreciation will reduce the value of the car immediately it is purchased, but it’s still counted as an asset.

    • 0
      0

      Thanks Rainey, of course the car is counted. Not upgrades to the house, big holiday etc. I was just trying to make the point that she needs to spend some of the inheritance to qualify for a part pension. Shouldn’t have mentioned car as an example

  3. 0
    0

    I agree with Sunday’s comment.The answer to Linda’s question is inadequate because it does not mention the all-important assets test.

  4. 0
    0

    Best for Linda to seel professional advice,

  5. 0
    0

    Can any one tell me my husband and I have been in Australia for 10 years and are now Citizens of this lovely country we have no intentions of moving back to New Zealand we are both on age pension we get the bulk from N Z monthly and a small amount from A U every fortnight. If we renounce our Citizenship from N Z can we go on a full Australian Pension . My husband worked here till his 70 th birthday and payed big taxes and we have owned three properties here and done each one up as we have gone along and do not have spare money now. We spend all our money here . Why can’t we go on a full A U Pension.

    • 0
      0

      Do not think it has anything to do with citizenship. In my case I get
      a small pension from Switzerland, has to do with working years in that country and might be similar in your case. Centrelink had me
      filling in the forms for the Swiss part of it. I have been in this country since 1970 and I am also on a part Age Pension. Also your
      NZ pension I believe is a universal pension, i.e. not means tested.
      A NZ friend is in the same position and has made all the moves, but he gets exactly what you are getting and he lived here for 15 years.

  6. 0
    0

    Nice boyfriend. 🙂 I hope it was at the expense of this children’s inheritance.

  7. 0
    0

    I’m surprised you can have $140,000 in the bank and be on on a full age pension?

    • 0
      0

      yes vinradio I agree (I’d like to have 1/2 of that ), also with $400,000 invested right why worry about how much / if any Pension she would get / lose, some people are just so greedy

    • 0
      0

      vinradio – you can actually have around $159,000 cash in bank – and still get the full aged pension.
      The devil is in the detail. I am the nominated person to act on a friends behalf, with Centrelink. He has $158,000 in bank. Problem is that he is only getting interest of 1.2% at bank. Yet government DEEMS he is getting interest of 3.25% on amount over $48,600. So he is losing.

  8. 0
    0

    The inheritance, providing that it is reported to Centrelink within 14 days of receiving it, will not be counted as an asset for the first twelve months. However, what is done with the money may be subject to income test immediately, so anything over $150,000 in the bank will begin to reduce your full pension to part pension. In the second year all your money will be counted towards the asset test as well as the income test. You have twelve months to decide what to do and you should speak to a professional accountant.

  9. 0
    0

    Well, the first thing you do is to be an honest little vegemite and fess up to Centrelink.
    When they inform you as to what is going to happen re: pension etc. then you either like it or lump it.
    If you lump it, then seek independent professional financial advice.

    • 0
      0

      There has been cases where people have not reported any changes on declarations and when they were caught and charged with Centrelink Fraud they were sent to gaol for 12 months, then had small amounts deducted from every pension when they were released until it was re-paid.

    • 0
      0

      Re. “”fess up to Centrelink”” If you can get thru on the phone waiting for hours on end etc.

  10. 0
    0

    so totally she will have $140,000 plus $400.000 =$540.000,the total amount should be classed as asset,also it sounds like she owns her own unit,the interest amount from the $540.000 is income so that amount should be used on her pension as a deeming rate of %3.75 interest would bring in approximately $21000 annually,that amount should be used in working out what she will receive in her pension

    • 0
      0

      Yes – if single, and own your home, with $540,000 in the bank, would get Agend Pension amount of $36 per fortnight.

    • 0
      0

      That may well be how Centrelink would play it if they were ever informed :-)))

    • 0
      0

      Amazing all these clever people here working it out to the dollar.
      You guys should be accountants for us oldies, we could be much better off.

    • 0
      0

      This is how it pans out. Assets threshold $253,750 since September 2017 but this will come to play in the second year. The first year is exempt. So with $540,000 in the bank earning 2.5% pa and you draw the equivalent of the full age pension yearly, you can survive the next 19 years before qualifying for the full pension again, If you double the annual withdrawal then you can survive very comfortably for next 11 years before qualifying for the full age pension. But if the age pension is terminated altogether in the future then you will be cactus. At least you will live well for next 11 to 19 years.

    • 0
      0

      I’d inform them. They’ll find out, then you owe them.

    • 0
      0

      And people are always having a go at politicians rorting the system????????

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Seniors Finance

Read this before buying candles for Christmas

Gary Mortimer, Queensland University of Technology and Jana Bowden, Macquarie University Christmas marks a peak in consumerism across the West....

Health news

Climate change means Australia faces more heatwave deaths

Experts are warning that heatwaves present a greater risk to public health than bushfires. Heat-related illness is our "silent killer",...

Food

Dairy-free Banana Ice Cream Cheesecake with Blueberry Compote

Nadiya Hussain has become more aware of her dairy intake, saying: "We need to do our bit - I know...

Finance

Supermarkets urged to stop promoting unhealthy foods

Supermarkets have been seen by many, particularly older Australians, as somewhat of a saviour throughout these strange days, but a...

Health news

What a home DNA test can’t tell you

Genetic testing is easier and more popular than ever. Swab tests and saliva tests can be sent to your home,...

Wellbeing

Social connection boosts fitness app use

Most of us have experienced the benefits of exercising with a friend or loved one, it's more fun and it...

Health news

Massive blood test trial offers hope of earlier cancer diagnoses

One blood test could detect 50 forms of cancers if the trial of a liquid biopsy undertaken by the British...

COVID-19

The trends from 2020 that support a positive outlook in retirement

For most of us, the pandemic changed our lives in a big way. We were forced to dig deep and...

LOADING MORE ARTICLE...