The Meeting Place

Should I Go Through the Process of Claiming Aged Pension?

I've reached the age when I'm eligible for the Aged Pension. I'm sure I won't get anything because we have too many assets.  However, I'm wondering if I should go through the process of claiming so that I'm "on the books" as it were, in case there are other benefits I can get?

13 comments

On which "books?" Surely if you have too many assets, you don't need Centrelink?

You normal response Sophie based on jealousy.

A couple with $1 million in the bank earns $20,000 with the best bank interest rate they can get.  Can YOU live off  $20,000?  Thought not.  Oh yes....your next spiel:  live off the capital.  If retirees did that then they would have to be on a full pension which would affect all pensioners in future.  Its not a free ride even for you!

Oh..I notice an empty space where my post used to be! Never mind, the truth always hurts.

So Mick, what am I "jealous" of? And which "free ride" are you speaking of?

You and I have nothing in common Mick. I feel you are trolling me.. you have offered nothing of substance and your post is rather garbled.

We're in a similar situation, but I'm not going anywhere near Centrelink until/unless I absolutely have to. Why put yourself through unnecessary torture?

Actually I decided to try getting the Health Care Card, which meant I just had to go and get a "linking code"  so I could add Centrelink to my existing MyGov account.

I went to the Moreland office and it was perfectly fine. It was crowded but you go to a "Check-in" desk where they ask what you're there for.  When I said I just wanted the code, I got sent to a desk off to the side and only had to wait about five minutes. 

Back home, ploughing through the forms was much more of a pain than going to the office.  

If you think that you are close to the asset limit it may be worth seeing someone at Centrelink to check. Home contents, car etc. are often over valuated by people. Valuation is based on a 'fire sale" (what you would get right now if you had a garage sale). You may find that you become eligible, even if it is only for $1. This will also mean that you are eligible for a Health Care Card ..... and lets face it, that can make a huge difference.

In response to Sophie, some self funded retirees have gone without all their life to save for their retirement. No holidays, no take aways, dont smoke or drink, drive the same car for 20 years. You can be living in a house valued at $300,000 & have $854,000 (couple) in assets ... and receive nothing! Based on a return of 3% (more than current term deposit/interest rates) you would receive an income of $25,620 a year .... less than a govt. pension & with no health care card. 

This is a simple example, but even assets of $1m based on a 3% return would only provide $30,000 income for 2 people ... with no Govt. pension, no health care card, no subsidised energy bills or car registrations etc. With the minimal drawdown of 4% or 5% you are going backwards quickly and will eventually end up on a part pension. So you may as well renovate the house (or upgrade), replace the old car, and take a holiday, to get yourself below the asset limit .... please dont take up smoking or drinking :-).

Therefore .... any revaluation of assets by centrelink is worthwhile

To be fair, the whole point of superannuation is that we're supposed to live off the interest AND capital in your old age.  It was never meant as a way to build an investment pot to hand on to your kids.

I understand why people struggle with that because we've spent our whole lives saving and it's hard to get used to the idea that we're supposed to spend it.  

Your belief is how working class people think Dorothy. Very few appreciate the sacrifices some of us go through to build up a nestegg.  Why would one not want to pass on some capital to one's children? Its not as though its not fair given MOST workers spend their wages on themslelves and their family rather than go without or put themselves out.  Please don't berate those who do and have something left at the end, especially when these people have also not drained to pension system.

Self funded retirees who are not milking the system, a very small number are, should be commended rather than maligned.  Jealousy needs to be kept in the drawer and people need to think about WHY they did not make more of life rather than come after those who have.  And yes I understand the system is weighed heavily against the bottom end.  We all get that but many have fought their way out of hand to mouth existence.  Cheers.

"Why would one not want to pass on some capital to one's children?"

If you give your children a good education which sets them up for life..they won't need your "capital." If you are worried, then give them their inheritance now. Many people do that, including myself. Of course there will still be something for them when I fall off the perch.

Use your head Mick.

The system here is rotten: the people who paid the most taxes by earning and saving for retirement get nothing, whilst the ones who lived off the government get full pension. No wonder Australia is going backwards. Effort should be rewarded not penalized. I am all for a universal age pension which most developed countries give their retirees. This would of course be so simple that the government may even save money with less Centrelink staff and a higher tax take

Sophie  -  good on you.  Many are crying for retirees to spend every cent they have as they themselves collect (free) taxpayer funded money.  The pension.

 

Franky  -  I understand how you feel.  The rich are controlling many of the financial policies the current government implement.  The rich do not draw a pension...so let take it away from people who could have a reasonable lifestyle.  The poor are getting almost no tax cuts whilst the wealthy are getting huge tax cuts....if the government can bribe enough of the croos bench.  Some things never change!

Again..you make no sense Mick..no sense at all.

2Cents, do you have an idea how long you would be on the the minimal drawdown of 4% or 5% before you eventually end up on a part pension with a million dollars in capital averaging a 4% annual return? Not going to happen any time soon.

You should apply to allow Centrelink to make the decision for you. 

I'm not jealous. We also have built up a fairly good nest egg.  The fact remains that the government introduced superannuation with the concept that it would provide a pension on retirement, not that fat cats would live on the interest and pass the rest on to their kids. 

very hard to argue with any of Mick's comments - balanced and fair and accurate.  Dorothy I think you misunderstand how our super actually works.  Super mostly certainly provides an opportunity to build up funds and pass them down - note death duties were reduced in late 80s and capital gains were halved then super was brought in - these are all inter related.

Dorothy - super was introduced in 1991 and even Keating said at time we won't know untill 2031 how successful it has been - he wanted to see how folks who worked their working life of 40 years ended up.  The aim was to have super baalances that would pay a higher return that old age pension.  However some say for it to work 15% contribution to super ws required.  The current rate is only 9.25%.  However many conntribute more.  I expect the rate will slowly increase. 

MICK "balanced, fair, accurate"? Hahahahahahahahahahaha

yes KSS I think bob menzies must be a bit of a joker. I ROTFL and only just managed to get up and write this. I still think Mick is capable of a little sense though if he would only leave commenting on politics alone.

the halving of capital gains was a furphy....they halved the rate but increased the threshold...I sold an investment property after the so called halving of capital gains and was told I was elligible to use the old  system as I had owned the property prior to the change. Why would I do that I asked my accountant. He then did the calculations under both systems to show me that I was better off on the old system. The governement will only change a system of tax gathering if the overall effect is beneficial to them. 

Bob Menzis The pollies and the public service are above 15% in there Super and that has been for a while i dont call it Super icall it welfare and that is calling it very mildly

Bob Menzis The pollies and the public service are above 15% in there Super and that has been for a while i dont call it Super icall it welfare and that is calling it very mildly

Sounds like the right wing voice of the government has arrived bob. They cannot dispute the facts so throw mud in the hope they may dicredit anybody who tells it like it is.  They can't.

For every "right wing voice of the government" there is a far left one raising its  head and making no sense.

 

I agre with Sophie.

In the UK, it used to be mandatory to convert your private pension to an annuity, so you handed over the capital and it paid you a guaranteed income until you died.  They abolished that recently but I thought it was a good idea. Though the companes that provide annuities in Australia seem to be a real rip-off

Dorothy - this system you outlined for UK still applies in Singapore and your right it was and is a good idea. 

Thank you Dorothy. You are right about the UK system, which is no longer the case.

Totally agree with you Mick, KSS whats your argument against,just hahahaha,what's funny please let me know.

Thanks Discontented.  KSS is a lost right wing voice.  Poor soul.

Totally agree with you Mick, KSS whats your argument against,just hahahaha,what's funny please let me know.

The first thing to do is book an appointment with a centrelink financial officer & got through the scenarios to see if you qualify for any centrelink assistance.

Don't worry about getting on the books so to speak as most likey you already are.

The Senior Health Card is different from the Aged Pension. People are probably eligible for this and don’t bother to apply. If you have a single income of less than $54,000 pa or a couple income of less than $86,000 pa then you are eligible. 

It is disappointing that some are demeaning pensioners again, some I thought would never do that.

Of course most pensioners have paid taxes all their lives unless they were unable to work and surely people are not having a go at those.

62 years we paid taxes between the two of us whilst raising a large family some who we educated to tertiary level. They now pay a lot of tax so assuming all of us pensioners are unworthy and jealous  is plain nasty. 

Dorothy you need to find out if indeed you are over the limit. You can book a financial investment officers appt and talk to them at Centrlink.

They are known as a FIS Officer and will go through all your assets and income and explain what you are or are not entitled too.

 

If not entitled to the pension you might very well qualify for a Health Care Card or Seniors Health Care Card.

 

In terms of the pension system, the problem is that the last decade or so of Govts, have slowly eroded the system that Paul Keating had put in place.

The idea was that in the early 90's super was introduced, and the idea was a 3 strep process for funding the retiree.

A. One would apply for the Pension and if under the income  asset limit qualify

B. Then one would be topped up with the super they would receive to give a better lifestyle in retriement

C. Savings. 

 

So that was the plan pension offset with some super and topped off with your savings.

 

Since then we have gotten away from this system, reduced super benefits, made pension age higher and more difficult to receive and then, of course, the Govt expects you to dwindle your savings before being eligible. 

 

If you find all this difficult , and say the current system is not fair, we get the good old reteric of the

 AGE OF ENTITLEMENT  is over. Really.

 

Of course, the polies all got the entitlement of impressive super pensions and cushy jobs in embassies all around the world when they retire from politics.

 

We the true tax payers get told that we are entitled, yet they are the ones that walk away with all the spoils when they leave parliament

Baby Boomers are not trying to sponge of the Govt as the entitled, they are just wanting what was promised to them under the system we worked under as was given and outlined by the Keating system of super.

 

Talk to a FIS Officer Dorothy, and check out what you are indeed ENTITLED to receive if anything. Good Luck.

 

Further Info re the Senior Health Care Card can be obtained on the link below

https://www.humanservices.gov.au/individuals/services/centrelink/commonwealth-seniors-health-card/eligibility

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