What should you consider before making the move 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?
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.
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