The Meeting Place

Drawing down funds from Super

Now this may seem an obvious question (to some) however, what are the "rules" from CL regarding the drawing down of funds held in my Super? When I provided all my "assets" Etc, including what I had in my Super fund, prior to going onto the OAP some 9 years ago, on the amount I provided then, I've subsequently drawn down incrimentally over that period. The amount I have in Super now is substantially reduced. CL are always on the lookout for "changes in your circumstances". In my situation, this is obviously a change.

Is the money I've drawn down classed as"income" by CL? I maybe should add that most/all of the money drawn down went into "non income" assets such as repairs/renovation to the family home, a trip or two, but that's about it. Am I going to be slammed by CL for using "my money, Ralph" over time? I'm very hesitant in notifying CL, as I basically don't trust them to not get their claws into me somehow.


Is your Super in an Allocated Pension? If yes, did you set that up prior to going on the OAP 9 years ago? Have you been drawing lump sums occasionally over and above the agreed amount each year? 

McDaddy, no it's not an allocated pension. Just a "compulsory" super fund.

I maybe should also add that I am on a full pension. I didn't have that much in super to start with anyway, basically just employer contributions/interest earned etc.

Ok so no, it's not income for CL if you just making withdrawals from your super lump sum. Especially as you are getting Full Pension and your super is decreasing in value over time.

Thanks for your input. Under the circumstances, I think I'll just leave sleeping dogs lie with CL. It could create more problems than it's worth. I've seen/heard of too many instances where people "volunteer" information thinking they're "doing the right thing" only to end up in the pooh. As I said earlier, I don't trust the buggers!!

You're supposed to "volunteer" the information. The ones that get in the pooh are the ones that don't.

What did Centrelink tell you when you asked them?

I haven't spoken to CL yet, I wanted to get some feedback before I went down that road.

I'm loathe to spend another three hours on the phone, only to be told basically what's been covered on the forum.

I am in the same situation as Dazza, I withdrew from my super to prepay my funeral. I rang Centrelink to inform them and told the girl it was for my funeral. She told me I could withdraw for a holiday if I wanted to. Nothing happened to my pension so as long as the rules haven't changed ( which they do constantly ) you should be OK.

You mentioned that "most/all of the money drawn down went into "non income" assets such as repairs/renovation to the family home, a trip or two", the way CL is opperating these days I'm wondering if they will want to see your recepts. I too wouldn't trust CL with the LNP in government, they are merciless. 

Good question Dazza, as well as good comments thereafter. This topic clearly shows how Centrelink keeps people confused, tying many up in knots, creates anxiety in the elderly (and health issues), acts as a disincentive to earn, save or move assets around (e.g. downsize), and still reserves the right to hit them with the nasty robodebt tool (without explanation) if they choose to do so.

Good reasons to scrap the whole Broken Age Pension system, and simply implement Universal Age Pension, with NO tests other than Age and Residency, paid by the ATO (scrap Centrelink role & it's massive costs) after a single application at the beginning.

So far the comments that I have read do not make sense. Super is an asset and any cash you draw is also an asset. The money in super as is the cash is subject to the deeming rates. If you spend the money on another asset, you have just changed the form of the asset. I do not know what you mean by non-income assets unless you mean non-income producing assets. The non-cash assets are not subject to the deeming rate. Byt being, as you think, smart, and not informing CL of your reduction in total assets, you are depriving yourself of added pension payments.

Most Super funds provide Centrelink with a yearly balance of indviduals super accounts. They use the updated figures for deeming purposes. You can check what balance Centrelink are using by going into your account using myGov. Under Assets check what information they have. Also, You should always advise them online whenever your bank account changes by $2,000. This ensures no future problems

I recently sold an investment home at quite a loss, simply to get rid of the headache. But all Centrelink wanted to see was the sale price. So many times I had to tell them that the money was going towards the mortgage, not into my pocket or bank account! The loss came out of my super! They seemed totally disinterested in the outgoings, only the income. Was a constant headache.

As for the $2,000 - that is just stupid. Way too low. Example - I have chosen to draw my super every 6 months, not weekly/fortnightly/monthly. So amount is obviously larger. Why should I be penalised just because I want half yearly payments?

Dealing with Centrelink was and stil is a nghtmare and I just don't trust them for the future.

Just for interest, I got onto MYGOV and checked my "assets" with CL. I found that the amount I declared I had in Super when I initially applied for the OAP (9 years ago) the amount they (CL) show is the amount I declared originally.

Same with Bank Account balance, Car value Etc. Etc. the original amounts I declared are the same now. So, what this does to your theory of CL "cross referencing" with Super funds I'm not sure. For what it's worth, I'm in an "Industry" fund, but I wouldn't think this would make any difference. I would also doubt the "privacy laws" allowed any Super Fund to supply personal details of members accounts to anyone. CL included. However, in this crazy world we live in, who knows.

The only thing I know for sure is that "cross referencing" occurs when you decide to leave the country without notifying CL first. I naively found out the hard way some time ago. I soon learned that "BIG BROTHER IS WATCHING"!!

Interesting Danza because I know for a fact that when I worked for a large industry fund we sent a file to Centrelink each year and this still happens. It just saves individual from advising Centrelink themselves.

Regardless, it is your responsibility to contact your fund and ask them for a Centrelink schedule which you should upload to MyGov. Plus make updates to all the other Assets.

With reduced assets you may end up with more pension. There are granfathered rules in place for your super, so you should check with them on the treatment of your drawdowns 

Hmmm,interesting. I'll do as you suggest, I'll get onto my super fund and see what they can do for me.

I'd certainly rather deal with them than CL, that's for sure.

Thanks for your advice

Sceptic, yes I realize that Super is an "income producing" asset and therefore subject to deeming. In my my initial question as to how CL treat draw downs on Super, you may have missed my statement that the drawn down funds went into "non-income producing" assets IE. House reno's, a trip or two Etc. Hence my question on the forum, in order to get others thoughts/experiences Etc. before I throw myself at the mercy of CL.

As I also stated, my reluctance to go straight to CL is that my experience/dealings with CL, common sense, reason, and fairness don't appear in their brief, when dealing with the public, or the poor saps who depend on them.

Also, this is mostly accademic, as I'm (and always have been) on a full OAP so regardless of advising CL of the reduction of funds held in my Super fund, it won't thereby have any effect on my OAP payment. It's how they treat to drawn down amounts is my concern. I don't really want to end up with some "Robodebt" if I can possibly avoid it.

You are right in the fact that it won't impact your full age pension as your assets have been bdecreasing over time. You also have no idea what a Robodebt is either. CL are not out to get you, put your tinfoil hat back on and live your life.

"Hence my question on the forum, in order to get others thoughts/experiences Etc. before I throw myself at the mercy of CL." (Dazza)

Why do you put such faith into the advice of people on the thread? Surely it makes more sense to make an appointment to see a Centrelink adviser. Tell them all the circumstances and seek advice that way. The worst thing you can do is sit and hope for the best. If you are caught hiding one thing, they will look for more.

If you do decide to see someone at C'link, make sure you write everything down and have C'link stamp and date each document.