Centrelink Q&A: Can I use this trick to increase my pension?

Owen thinks he has found a way to increase his pension, but will it work?

Centrelink Q&A: Can I use this trick to increase my pension?

Owen thinks he has found a way to increase his pension, but will it work?

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Q. Owen
Just a small question regarding income streams. Are there any ramifications if I cancel my income stream and transfer the money to my wife’s superannuation fund? My wife is 63, therefore the money won’t be an asset and my pension will increase. Do the gifting rules come into play?

A. Gifting between spouses is allowed without having any effect on the way your income or assets are assessed by Centrelink.

Transferring assets out of your own superannuation fund and into your wife’s account is an entirely legitimate strategy to reduce the impact of the assets test.

As your wife is under 65, she does not have to satisfy a work test to have funds contributed to superannuation. As she is under pension age, assets held in superannuation are not counted towards your combined assets test for Centrelink purposes until she is of Age Pension age or starts drawing money from the account. This thereby legitimately reduces the impact of the assets test for Age Pension purposes.

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    Disclaimer: All content on 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 the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own 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.





    COMMENTS

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    Cowboy Jim
    8th Jul 2019
    10:29am
    It certainly is not a trick, just common sense. You leave money in your younger partner's super fund and qualify for a married pension (one eligible).
    Romeital
    8th Jul 2019
    10:44am
    Yep exactly what a super fund financial planner will advise
    McDaddy
    8th Jul 2019
    12:15pm
    Only downside is that the growth on his Income Stream is not taxed, whereas hers in accumulation is taxed at 15%, so as long as that wasn't more than the extra pension he will receive, might be worth doing.
    Karl Marx
    8th Jul 2019
    11:59am
    If it's a trick it's a rort.
    In this case it's totally legit. so it's not a trick.
    My sister is retired but not yet of pension age, her husband is 69. He transferred all his super into his wife's super 4.5 years ago
    inextratime
    8th Jul 2019
    12:06pm
    Can she retire at 65 ? I thought the OAP age has been raised to 66 ?
    Karl Marx
    8th Jul 2019
    12:10pm
    I think it will be 66.5 soon if not already.
    Karl Marx
    8th Jul 2019
    12:11pm
    Correction, you can retire at anytime 66 or 66.5 is the minimum age for applying for the OAP
    JB
    8th Jul 2019
    2:29pm
    You can retire at any age but can’t get the pension till 66 in my case . I worked 8 hours a week and travelled a bit to get there on two consecutive days 4 hours a day . My husbands pension was reduced and with cost of petrol etc it was a no brainer to “retire” .
    inextratime
    8th Jul 2019
    12:06pm
    Can she retire at 65 ? I thought the OAP age has been raised to 66 ?
    KSS
    8th Jul 2019
    1:35pm
    The double standards on this site are truly jaw dropping.
    People using tax law to legitimately reduce their tax burdon are called rorters and have all manner of abuse hurled at them.
    Someone using legitimate ways to reduce assets and increase Centrelink payments is heralded at smart and sensible.

    Of course it is those same taxpayers paying the increased Centrelink payments resulting from this slight of hand but hey, it's not the Centrelink claimant so that makes it OK.
    Karl Marx
    8th Jul 2019
    2:17pm
    It's not a double standard or a rort as it is legal.
    Unfortunately if you are single you can't do this.
    Rosret
    9th Jul 2019
    7:35am
    This is what marrieds have been doing for years. The strength of the family unit.
    However there is also a 50% divorce rate and quite frankly I would be more inclined to trust the government than a spouse.
    - and yes Olderandwiser is it quite an unfair scenario for singles. In fact our entire economy is based on double incomes.
    Sundays
    8th Jul 2019
    1:48pm
    Think it through by seeing a Centrelink Financial Officer. It’s a good strategy but If you already have an income stream and it is tested under favourable rules which existed prior to 1 July 2015 you may be worse off in 4 years when your wife retires and it is fully means tested and income deemed
    Rosret
    8th Jul 2019
    1:54pm
    This is another question I have for you all.

    A friend of mine has received an award as he Asbestosis. He is reasonably well at present however he will need that money in a few years for medical and nursing care.

    When Centrelink were informed they indicated that this amount was income and therefore his pension was reduced accordingly.

    As we all know the Centrelink pension is very poultry so the money that was intended for his medical care in the future is now being whittled away on bread and butter items. That means in the future he will have nothing for the care he needs.

    Is this how the NDIS works as well? Or is there a double standard. Centrelink will help one group of people but not another? I would really like to pass on some advice to this man as it seems so incredibly wrong.
    Rosret
    8th Jul 2019
    2:19pm
    When sending an email to the government site this is the response received:

    "The application fee of $920.00 must be paid before the application can proceed. More information about fees, applying to reduce the fee and the application form can be found at http://www.aat.gov.au/resources/aat-forms."

    $920 is a fortune for a pensioner with no guarantee of success.
    Karl Marx
    8th Jul 2019
    2:21pm
    Yep centrelink want to pay zip or as little as possible. When he needs it he'll be drawing diwn on it so then he goes into centrelink every time his balance decreases by a $1000 or so to maximize his pension.
    Rosret
    8th Jul 2019
    5:36pm
    Except he has to use it now because a reduced pension is not a livable scenario. So when he needs that money it won't be there.
    There was no point in being awarded compensation as all the money is just eaten up by the government. What an odd system we have established.


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