Does the Age Pension application process need a major overhaul?
The answer, based on the hundreds of complaints and pleas for help we receive from YourLifeChoices members very month, is yes.
These are typical.
“We found that Centrelink will not help to tell you in simple terms whether you qualify for a full or part pension, and will do everything in their power to make it most difficult to achieve an outcome, even though you most likely qualified in the first place.”
“The main application form [is] a horrendous document. Even I (with tertiary degrees) found it difficult to comprehend …”
“It took me a week to assemble all the paraphernalia. Then when the second meeting took place, we were grilled for several hours, at one stage, completed some forms only by looking up their computer and with special permission to access my bank details. They asked so many personal questions, we lost count. After hours of intense scrutiny, the young interviewer pressed a few buttons, auto scanned some 50 pages of documents and said you will hear from us if you were successful in a few weeks. Our jaws dropped.”
“Centrelink is not making it easy. So many times you read or hear people say (including this site) to ‘speak to a Centrelink Financial Person’. I accompanied a friend to one of these, both to help her and to prepare myself for when I went on pension. I found them extremely reluctant to offer assistance.”
“A lot of older people give it up, with some feeling not up to it to fight a monstrous Centrelink bureaucracy, thus saving these nasty governments … heaps of money.”
“Even when you get onto myGov it is not straightforward if you have never dealt with Centrelink… I wonder how the designers of these systems ever got it through user testing.”
“We got back our part pension after engaging a financial planner to act for us … Why did we need a financial planner in the first place?”
We could go on, but the point is that it seems the application process for the Age Pension and the Commonwealth Seniors Health Card (CSHC) is confronting and difficult for many.
Financial advisers say an increasing volume of clients are seeking their help to navigate the pension application process.
Retirement Essentials reports that client demand for its services was up 10 times in the March quarter compared with requests at the same time last year and quoted research conducted in in 2018 that found 82 per cent of Australians needed help with their Centrelink benefits.
Services Australia general manager Hank Jongen said that Age Pension claims generally took longer to process than some other payments, such as the JobSeeker Payment, and the reality was that people often had complicated financial affairs.
“We need to review an applicant’s personal and financial circumstances,” he said, “looking at a wide range of information such as their residency, investments, superannuation, real estate assets, inheritances, family and business trusts. We also need to assess the income and assets of their partner, if they have one.”
He said the quickest and easiest way to claim an Age Pension was online through myGov.
“Our digital assistant, ‘Oliver’, can help you throughout the claim by clarifying questions, answering simple queries, and directing to information on our website,” he said.
“Staff are always available over the phone or in person at service centres to assist with completing a claim form.”
Mr Jongen said delays with processing an Age Pension claim could occur if Services Australia was waiting for applicants to provide more documents. “So it’s important to respond quickly to any requests in your myGov inbox for additional information or documents.”
By way of background information, Services Australia offered the following statement.
“We work to process more than 80 per cent of claims within 49 days, and we’re continuing to process Age Pension claims within these timeframes, especially during COVID-19.
“You can lodge an early claim for [the] Age Pension up to 13 weeks before you reach Age Pension age.
“Claiming online means you can save and exit your claim, upload and attach documents, have your claim pre-filled with your personal details if you’re receiving another Centrelink payment, and track the progress of your claim.
“It also won’t let you submit an incomplete claim, stopping any unnecessary delays with processing your claim if we don’t have all the required documents.”
For information on how to prepare for claiming an Age Pension, go here.
Retirement Essentials estimates the value of a full Age Pension for a couple at more than $800,000 over a lifetime. “And the Commonwealth Seniors Health Card can be worth thousands of dollars per year to those too wealthy to qualify for the Age Pension,” a spokesperson said. “So, it pays to know what you’re eligible for.”
However, it says that callers repeatedly complained about the application process.
“Unfortunately, keeping on top of the entitlements and understanding your eligibility is a little more complicated than you’d expect,” the spokesperson said. “And the application process itself is often described by retirees as a ‘nightmare’, full of complex questions and unfamiliar terms. It’s like doing your tax return, only much worse.”
Age Pension eligibility currently begins at age 66, but the average Retirement Essentials client is 69.2 years, which the spokesperson said suggested many people were procrastinating about going to Centrelink and getting information about their entitlements.
“This is hugely disappointing,” says Retirement Essentials chairman Jeremy Duffield, “since there’s no ‘back pay’ on the Age Pension. Many people are losing out on tens of thousands of dollars.”
The CSHC was another area of confusion, he said.
“Many people thinking they won’t qualify for the Age Pension don’t realise that eligibility for the health card is much wider. A higher threshold of income is allowed, up to $89,290 in taxable (and deemed) income for a couple ($55,808 for singles). And the rules on deeming are quite liberal, applying principally to account-based pensions and excluding other assets.”
Do you believe the Age Pension application process could be simplified? Have you sought professional help to complete an application?
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