Explained: Age Pension or Carer Payment?

Information on choosing between the Age Pension and Carer Payment.

How to choose the right payment

Anyone of pension age who is providing care for someone who is sick or has a disability that prevents them from working is eligible for the Age Pension or Carer Payment.

But which one should you choose?

The Age Pension provides some income support as well as access to concession for eligible older Australians. There are also further incentives, such as the Work Bonus that can help pensioners boost their overall income.

A Carer Payment also offers income support and, as long as certain conditions are met, is available to anyone under the Age Pension age who is looking after someone with a disability, or someone who is frail, aged or has a debilitating medical condition.

There are similarities with Carer Payment and Age Pensions, such as:

  • the rate of payment (depending on your financial circumstances)
  • you will be assessed by income and assets tests
  • Age Pension is taxable; Carer Payment is also taxable once the carer or the care receiver reaches Age Pension age
  • Both are eligible for a Pensioner Concession Card
  • rent assistance rates (if you are partnered or are not sharing accommodation).

Once you hit Age Pension age, you can choose to keep receiving the Carer Payment or switch to the Age Pension.

While the payment rates are the same, there are some differences you should know before making your decision. Below is a table taken from www.humanservices.gov.au that clearly defines the similarities and differences between the two payment types.

Circumstances

Carer Payment

Age Pension

The person for whom you were providing care was your partner

You may receive a lump sum bereavement payment if your partner was receiving an income support payment from us or the Department of Veterans’ Affairs.

You may continue to receive Carer Payment for up to 14 weeks. Your regular fortnightly payments will be adjusted to the single rate. You may then need to consider transferring to another payment such as Age Pension.

You may receive a lump sum bereavement payment if your partner was receiving an income support payment from us or the Department of Veterans’ Affairs.

You may continue to receive Carer Payment for up to 14 weeks. Your regular fortnightly payments will be adjusted to the single rate. You may then need to consider transferring to another payment such as Age Pension.

You may receive a lump sum bereavement payment if your partner was receiving an income support payment from us or the Department of Veterans’ Affairs.

You will continue to receive Age Pension.

Your regular fortnightly payments will be adjusted to the single rate.

You were not the partner of the person for whom you were providing care and the care receiver’s partner is getting a Centrelink pension or benefit, or a Department of Veterans’ Affairs Service Pension, Veteran Payment or Income Support Supplement

You are not entitled to a lump sum bereavement payment.

You may continue to receive Carer Payment for up to 14 weeks. You will then need to consider transferring to another payment such as Age Pension.

You are not entitled to any bereavement payments.

You will continue to receive Age Pension.

You were not the partner of the person for whom you were providing care and the care receiver’s partner is not getting a pension or benefit, or a Department of Veterans’ Affairs Service Pension, Veteran Payment or Income Support Supplement

You may receive a lump sum bereavement payment.

You may continue to receive Carer Payment for up to 14 weeks. You will then need to consider transferring to another payment such as Age Pension.

You are not entitled to any bereavement payments.

You will continue to receive Age Pension.

The person for whom you were providing care was single

You may receive a lump sum bereavement payment.

You will continue to receive Carer Payment for up to 14 weeks. You will then need to consider transferring to another payment such as Age Pension.

You are not entitled to any bereavement payments.

You will continue to receive Age Pension.

If you do choose to switch to the Age Pension, you will be sent a transfer form and you’ll have to declare the amount of super you have, as well as any assets and income you receive.

If you have a Centrelink Q&A for us, send it to newsletters@yourlifechoices.com.au and we’ll do our best to answer it, or find someone who can.

Are you eligible for an Age Pension? Do you know your rights? The RetirePlanner™ tool has all the information you need.

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    Financial 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

    To make a comment, please register or login
    maelcolium
    18th Jul 2018
    1:41pm
    Carers also receive an annual $1200 carer bonus in July each year (thanks John Howard) which is not paid if you transfer to the OAP.


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