Ben has been lucky enough to track down a tidy sum in lost super but as he is also claiming an Age Pension, he’s unsure of the implications of this windfall. Debbie explains how it works.
I am 71 and receiving a part Age Pension because I earn $10,000 a year doing some part time contract work with the one employer. I am renting and my current assets are under $15,000. I have found out (through myGov account) that just over $59,000 is being held in the ‘ATO Held Super’.
If I was to apply to withdraw this amount will it affect my Age Pension?
A. Firstly, Ben, congratulations on tracking down superannuation that is rightfully yours.
As you are of Age Pension age, any super you have is assessed as an asset if you have not yet commenced an income stream.
If you choose to commence an income stream with this new found super, then it will be assessed under the income and asset test to determine how your payment may be affected.
Finally, if you simply choose to withdraw it as a lump sum, what you do with the money will depend on how it is assessed. As a one-off lump sum, it won't be counted as income. However, if you choose to purchase a financial asset, such as shares, or place it in an interest-bearing account, then deeming rates will be applied to it and it will be assessed under the income and asset test.
If you choose to purchase an asset that is assessable, such as a car, boat or artwork, then the value of this will be counted as an asset.
And, if you choose to simply spend the money on a holiday or home improvements, then it will have no bearing on your Age Pension.
Before making any decisions on what you do with this money, you should speak to a Centrelink Financial Information Services officer to confirm your personal circumstances.
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