Transferring to the Age Pension

What should you consider before making the move to the Age Pension?

Transferring to the Age Pension

Many Disability Support Pension recipients question whether they should transfer to the Age Pension, so what should you consider before making the move? 

Q. Vic

I'll be 65 in February and I'd like your advice as regards whether it would be more financially beneficial for me to stay on my Disability Support Pension (DSP) or transfer over to the Age Pension, or do I have to transfer over? 

A. There are a few things that should be taken into consideration when making the decision to move from DSP to an Age Pension.

The Age Pension is generally the most appropriate payment for people who are over Age Pension age. The rate of payment, income and asset tests, and concession card provided to Age Pensioners are the same as for Disability Support Pension. Once a person reaches Age Pension age, their payment will become taxable whether they remain on Disability Support Pension or transfer to Age Pension.

There are no medical eligibility requirements or medical reviews if a person receives the Age Pension. If a person is intending to travel outside Australia, the rules for being paid Age Pension outside Australia may be more beneficial than those for Disability Support Pension. If a customer's home is situated on a block of land larger than two hectares and on one title, they may be able to have more land exempted from the assets test if they receive the Age Pension.

In some circumstances, a person may be better off remaining on Disability Support Pension. These include:

  • if the person is currently getting an Incentive Allowance, which can only be paid to Disability Support Pensioners
  • if the person currently gets the higher rate of Mobility Allowance, which cannot be paid to Age Pensioners
  • if the person is single and sharing privately rented accommodation they may be eligible for a higher maximum rate of Rent Assistance than if they were receiving Age Pension and sharing accommodation.

NOTE: If a person has a partner who currently receives the Wife Pension, she will also lose access to the Pensioner Education Supplement if the person transfers to the Age Pension. 

If you still need more information, you can contact your local Centrelink office or visit the Centrelink website for an overview of payments.

This is an important decision to make, so if you have any doubt, contact an independent financial advisor who specialises in Centrelink payments. You can find details of advisors by contacting the Financial Planning Association.


    To make a comment, please register or login
    7th Dec 2015
    I am 65 in January 16, currently on DSP with portability. I have a small Super Fund that will provide income within the asset/income boundaries. I had an interview with Super Fund Financial Adviser and he suggested an appointment and discussion with C/link financial adviser BEFORE making the decision.
    You can remain on DSP if you wish.
    7th Dec 2015
    I was on disability pension and I continued on disability pension in April 2014 when I turned 65. At the time there was a choice but I had to write to the ministers office to get Centrelink to confirm there was a choice. The choice means Centrelink have to think about it a bit more.

    I now receive the same benefits as age pension, and the same conditions for casual work as age pension. This means I am allowed to earn a little more from casual work (over 65 disability pension) than I was (under 65 disability pension) that's without my pension being reduced.

    I was aware of some benefits regarding share accommodation but these did not apply to me where I was living at the time. I stayed on disability pension because I thought I would be able to continue using government disability employment services, but sadly this was not the case.
    There was government legislation that defined the services as applying to people 14-65yo. So that ended my happy relationship with the Disability employment service. They would take me into town and we would do the shops door to door for casual work of a few hours per week. I was not permanently disabled but became disabled with an illness called thalamic stroke and thalamic pain syndrome.

    I don't know if the same conditions still apply to disability pension but It is something that needs to be kept under careful watch because it could be changed at any time.

    7th Dec 2015
    Start hiding your money before retirement/Age Pension age, as the longer you wait to do it the more the government will cheat you out of your "rightful due".
    7th Dec 2015
    Fast Eddie, well said and how true too.
    7th Dec 2015
    F Eddie, Also I was too late to do that, and they penalise you for trying to do the right thing!!!!!
    7th Dec 2015
    Exactly. Nor is advice or suggestion given at Centrelink. In regards to guidance there is none. You have to know precisely what questions to ask, as there is no prompting as to different courses of retirement actions. There are no gold stars or koala stamps for doing the right thing, just rewards to your own conscience (sufficient enough for me) and yet with ALL the I.T. Centrelink has there is no penalty for those cheating the system, either.
    9th Dec 2015
    Fast Eddie, agreed, don't think that Centrelink is your friend and will help you make wise financial decisions. No. That is not their job, you are to make full and frank admissions to them (how could it be any different) and robotically they will give you an answer which is not necessarily guidance nor advice to maximise your financial situation. Think of it, they can't advise you how to rort the public purse can they, and nor should they! And as you mention, you need to ask the right question ... But if you don't know the answer then you can't ask the right question can you???? It's Catch 22!!!

    The right thing to do is to tell the truth. No?? It would be very foolish to try and hide money from Centrelink .... Those big Govt computers are churning over every second of the day and eventually you will be caught.

    However, that does not mean that you can't deliberately and lawfully manipulate and change your financial circumstances to increase your welfare payments. But to do so you first need to know the rules, all the rules. Trouble is that there is no B out there with that knowledge who does not want to charge you for such advice and, even then, such advise will be biased towards making that person more money out of your financial situation.

    Retiring is like jumping into a pool full of financial sharks!

    The really big hurdle is that the Govt, on both sides keeps, on changing all the rules. So ends responsible future financial planning and it also makes paid financial advice redundant real quick.

    BUT the biggest mistake that most of us make is that we only plan, if we do that, we only plan as far as when we first retire and whether or not we will get the Aged Pension, stay on the DSP or how to be self funded. That's all about, 'How do I NOW maximise my weekly income.'

    So what's wrong with that????

    It's short sighted!!!!

    No we need to do financial planning from at last 5 years before retiring. Why 5yrs?? The gifting rule may be relevant OK! And we need to then plan our financial dealings from retirement and beyond to retirement village, low level care, high level care and nursing home re the various costs and fees associated with such establishments.

    That nice big house you bought to get the a
    aged Pension could be a nice source of capital to pay those juicy fees at a later date!!!

    So 'wise' decisions how to maximise weekly payments, (income), when first retired may not have been the best financial move when you pass through these later stages of life ... If you get that far!

    And the big problem here is that we struggle to know the retirement rules and we have no hope of understanding all those other financial rules/fees that wait for us down the track!!!
    8th Dec 2015
    hi another thing to consider under disability is assistance with placement as you get older I have found in my job placing people under disability takes longer as disability SA are quite slow to get back to you and appears to be a longer wait, however under age pension things move along faster. on saying that there may be no difference one a person reaches 65 yrs of age. however It is something to check out whether at age 65 one still comes under disability SA in this area.
    8th Dec 2015
    And ill bet my bottom dollar that someone from centrelink, the ATO and various other for depts are reading all this right now. they will request the meta data and come get you all and your money lol
    9th Dec 2015
    Sorry Bones, I'm missing your point? If you unlawfully rort the system then you need to get caught!!! OUCH!!!!
    Not Senile Yet!
    8th Dec 2015
    There is such a thing as blowing the Welfare Budget through surveillance and employing people to catch the 5-10% who cheat!
    Currently the powers to be are hell bent on the attitude that up 30% are Cheaters....but cannot produce the results (Prosecutions and return of money) to justify the over expenditure being spent!
    This is why the Welfare Budget is Blowing Out!!!
    It is not the cheats...they are only a low is the expenditure being spent to catch them!!!
    The expense is then hidden in the Welfare Budget....because they do not need to show what they are spending in this area!!!!
    What a whole lot of schemers they that do not return the Money spent to capture them!!!!
    Ho Ho HO!!! Have a merry Xmas!!!!
    The make believe Santa comes in many disguises......careful that as an adult you do not believe the Propaganda being spun about Welfare Budget Blowouts......They simply can't manage our Money with any sort of responsibility!!!!
    How much they pay themselves and others for little or no return testifies to that!!!

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