The Meeting Place

Will my partners income have an effect on my part pension ?

I am receiving a small part pension . My partner is under pension age and about to start casual work , a few hours each week , earning up to $120pw . Will this have an effect on my part pension of $90 pf ?

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To McDaddy.

Your $2.7million calculation with respect to BornTooLate...'s original query is wrong. The capital sum required for the maximum pension for a member of a couple ($703.50 pfn) to be reduced by $613.50 pfn under the Income Test is $1,387,800. Your commentary is unhelpfull, irrelevant, and egotistical. You clarify absolutely nothing and obfuscate everything. You should remain mute, so that your repute, doesn't suffer a dilute.  And that point is not moot.

To johnp. 

The deduction for excess assets is $1.50 pfn per $1,000 of excess assets for each member of a couple receiving the pension, when being assessed under the Assets Test. If only one member of a couple qualifies for the pension then that member losess $1.50 pfn per $1,000 of excess asets. When their partner qualifies for the pension then the partner's pension will be reduced by $1.50 pfn for the same value of excess assets. The total deduction for the couple when both are pension recipients is therefore $3.00 pfn per $1,000 of excess assets. Again, this occurs when the persons are being assessed under the Assets Test. I also stress that it is for the same assets total. No consideration, eg a doubling of the total permitted assets, is given when there are two members of a couple receiving the pension as against only one member receiving it.

AH, of course makes sense to me now. So would I be right in saying. Upper threshold of about $863K minus lower threshold of about $394K = 469. Subsequently 469 X $3 X 26 fortnights = $36582 which is the annual aged pension if below $394K in financial assets.  Hope that makes sense.

To Radish,

Your comment of only needing capital of $1,387,800 to reduce his pension by $613,50/ftn is factually incorrect and is diluting your credibility and is very unhelpful. This amount you quote will only reduce his Pension by $306.75/ftn  under the Income test. I noticed straight away that he was only receiving $90/ftn under the asset test and that his wife earning $240/ftn would not impact his pension, as he was OBVIOUSLY heavily asset tested. I only needed 1 sentence, not an essay to answer the question.  Good luck with passing that dictionary you have swallowed. 

McDaddy. The capital sum of $1,387,800 is factually correct, at current deeming rates, and permitted income. $86,200 at 1% yields $862 per annum. The balance is $1,301,600 which at 3% yields $39,048 pa. Add the two to get total deemed income of $39,910 pa. This is $1,535 pfn. Deduct $308 pfn permitted earnings leaving $1,227 pfn as excess income. Only 50% of this, $613.50, is deducted from the pension. So the pension under the Income Test for a member of a couple where only one member receives the pension would be $703.50 - the maximum pension pfn per member - less $613.50, which equals $90 pfn.

Please show me where I'm wrong by providing your calculations. I'm happy tp apologise for any errors and to learn from my mistakes.

It's all well and good praising yourself by saying how obvious it all was to you, you self-proclaimed clever chap, and how you only needed one sentence to answer BornTooLate's question, but how does it advance his and other reader's understanding of Centrelink's processes to dismiss questions with a single "yes" or "no"?

You're a very arrogant man. As we Russians say, you have to have some intelligence to recognise that you may actually be stupid.

And you're a plagiarist. Look it up. I've spelt it correctly just for you.

 

 

Hope you guys can sort out your differences :-)  Maybe I should look further back in this blog and sorry if I missed something.  But I thought that the capital sum of $1,387,800 would mean that the couple in question would be excluded from the aged pension anyway because that amount is above the upper asset test threshold ??

JohnP you are of course correct and I think we both acknowledged that earlier, this is about Radish being on his high horse now.

Radish,  Capital of $1387800 does indeed create $39910 PA in deemed income. A couple can have $8008 ($308/ftn) before any income impacts. $39910 - $8008 = $31092 of income impacting Pension per annum. Fortnightly this is $1535 of impacting income. less the $308/ftn = $1227, divide that by 4 to give the .25c in the $1 reduction and the redcution amount is $306.75/ftn. Max Pension $703.50 - $306.75 = $396.75/ftn Pension, not $90

 

McDaddy, the pension reduction is 50 cents in the dollar for each dollar of income in excess of $308 pfn. Hence excess income of $1,227 pfn results in a $613.50 loss of pension pfn. $703.50 less $613.50 equals $90.

I have no idea why you divide the $1,227 of excess income by 4 instead of 2. I've just checked the DHS site again in case I've gone completely insane (I grant, that's posible) and the pension loss is still 50% of income in excess of $308 pfn.

Are you confusing weeks with fortnights?

At least now we know where it is that we differ.

 

Radish, you are reducing one person's Pension $703.50 by 2 persons income, you need to divide the $613.50 by 2, and then take it off the $703.50, which gives you $396.75/ftn. Yours would work if you went $1407 ($703.50 x 2) and then took $613.50 from that $1407 - $613.50 = $793.50 reduction between them which will give them $396.75 each, except he only gets the Pension.

Also a couple can have up to $81172 pa before the Pension completely cuts out due to income, so obviously an incopme of $39910 Pa isn't going to go close to cutting off and will certainly pay more than $90'ftn Pension, in fact they would need to have capital of app ............$2,700,500 to create that much deeming, 

McDaddy, you may be right. My understanding is that even if only one member of a couple receives the pension, any income over the $308 pfn threshold will reduce that person's pension by 50 cents for every dollar of excess. If both members receive a pension, then the 50% reduction will simply be shared equally between them or taken off the top of their combined pension(s).

I have scoured the DHS web site for an answer to this but can find no reference to the deduction being halved if only one member of a couple receives a pension.

Can anyone else resolve this definitively? Otherwise I'm off to my local Centrelink Office to get a written answer.

I hope you're right McDaddy. Your scenario is better, ie more generous, than mine.

And if you're right I will tip my hat to you then eat it.

PS McDaddy. I note that a single person on the single person's pension also has 50% of any earnings over the single person's fortnigtly earned income threshold ($174 pfn) deducted from their pension. On your scenario, a single person should only be deducted 25% of excess earnings. Without rancour, I genuinely believe you're wrong but I admit I do not know for certain. 

This will be resolved as it is a matter of fact.

This is good fun if nothing else. I've thoroughly enjoyed the cut thrust and parry.

A mortal blow I fear Radish, https://guides.dss.gov.au/guide-social-security-law/4/2/1/10 Under How Income Reduces Payments.

McDaddy. I checked your reference. The taper rate is shown as 25 cents in the dollar for each member of a couple; thank you for sending me the reference. But the reference doesn't state that both members must be in receipt of a pension for the deduction to be the full 50 cents in the dollar. In other words, is the one member recipient's pension reduced by the full 50 cents because the couple are regarded as, in effect, a single entity.

When I have previously checked this with Centrelink - sometime ago admittedly - in anticipation of applying for a pension myself, I was told that whether one or both members of a couple received the age pension, the deduction for excess income would be 50 cents in the dollar. 

I hope you're right, as that would change my personal calculations substantially.

I am going to go to my local Centrelink office and grill them on this. It is impoprtant. 

Meantime I tip my hat to you and acknowledge that in all probability you are right and I am wrong. Lucky for me my hat is made of edible crisps.

Radish I hope you get some closure on this today. If only 1 member of couple on Pension taper rate is definitlely .25c in dollar, very unfair otherwise. The same logic that you applied to the Asset taper, it's $3/1000 or $1.50 each for couples. Income test works the same way. Good Luck

McDaddy you are right. I had a meeting this morning with a Centrelink consultant who confirmed in writing that when only one member of a couple receives the age pension, then only 25 cents in the dollar is deducted from that pension for earnings in excess of the fortnightly threshold.

My apologies to you for my arrogance, and my apologies to any readers who have been following this debate and who may have been mislead by my erroneous statements, assumptions and calculations.

My wife's cooking the humble pie; I hope she doesn't mess it up.

Wow Radish, you have certainly done the hard yards to answer Borntoolate's question. Good on you. Even more, takes a brave person here to admit when they are wrong.

Thank you. All very interesting.

And good on McDaddy too for the constructive/corrective information. Hope the humble pie proves enjoyable and you two continue to offer sage advice for other queries here.

Great post Radish.

Learning curve for all. I now know it's a moot point, not a mute point.  :)

LOL

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