How overseas income affects the Age Pension

Lesley expects to receive a small UK pension soon and wants to know how this will affect her and her husband’s Age Pension payments.

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Q. Lesley
I am waiting to receive a UK pension. I should receive a small pension as I only worked in the UK for 11 years. My husband and I get the full Age Pension and I have only $230,000 at the moment. Will our pension be affected when I receive my UK pension?

A. Centrelink will assess your UK pension as income and if this takes you over the income limit, your Age Pension will be reduced. You are allowed to earn a certain level of income before your pension is reduced or cancelled. To receive the maximum Age Pension payment, your fortnightly income needs to be less than $320 a fortnight if you’re in a couple relationship.

Read: How are life insurance policies assessed?

When you advise Centrelink of your income and assets from overseas, it will convert the value into Australian dollars. Once you have been granted a UK pension, the amount will stay the same – it is not indexed. This means that the only fluctuation in the value of your payment will be due to the exchange rate.

Centrelink currently uses the Commonwealth Bank buy rates that apply on the fifth business day before the first of each month. Centrelink will update your income details on the first of each month and apply this rate of income to your Age Pension payment.

This is only a guide to what you may be entitled to. You can make an appointment to speak to a Centrelink financial information services officer on 132300. That is a free service, which you can access at any time, whether a customer of Centrelink or not, and will help you to better understand your entitlements based on your individual financial position.

If you have a question about the Age Pension or other Centrelink payments and benefits, email [email protected].

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