June is preparing for retirement and wants to know how her UK pension will affect her application for the Age Pension in Australia.
My husband and I are looking to retire when we are 66. We are 64 now. We are from England but have been working here for more than 14 years. We have a full English pension of £160 a week. We will have a small amount of super maybe $40,000 about $20,000 in shares and $50,000 in the bank. Do you think we will get a part Australian pension?
A. Centrelink will assess your UK pension as income and if this takes you over the income limit, your pension will be reduced by 50 cents for every dollar you exceed the limit. For example, the current limit for couples combined is $308 per fortnight.
The income from your combined UK pension will be roughly $1200 per fortnight, but the first $308 will not be assessed.
The remaining $892 will reduce your pension by $446 per fortnight. Therefore, based on a couples combined full Age Pension of $1396.20, you would receive $950.20 per fortnight. These figures are for guidance only, based on the current limits (which you can view here) and do not include the other investments you mentioned which will be deemed to be earning income.
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. This 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.
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