Salary sacrificing and the pension

YOURLifeChoices subscriber, Annie, is planning her retirement income and would like to know how salary sacrificing will affect her pension eligibility.

I am 72 years old and not retired yet but in the process of looking to organise my finances to maximise my current financial position.

If I put all of my salary per fortnight into superannuation I will have no usable income. Therefore, would I then be able to access an Age Pension from Centrelink?

A. Provided by Centrelink
Annie, unfortunately any amount of salary voluntarily sacrificed into superannuation is assessed as income for Centrelink purposes. In addition, for employees aged 70 and over, all employer contributions are assessed as income because the Superannuation Guarantee Component (SGC) no longer applies. This means if you or your partner are receiving Age Pension you need to let Centrelink know how much you are contributing to your super fund as it will impact on your rate of payment. More information on Age Pension eligibility as well as income and assets tests is available on the Centrelink website.

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