UK Pension and the Age Pension

Mike receives a UK age pension and wonders how this payment is treated by Centrelink.

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Q. Mike
I receive a UK age pension. Does Centrelink treat this as an asset or as income?

A. Centrelink will assess your UK pension as income and if this takes you over the income limit, your pension will be reduced by 50 cents for every dollar you exceed the limit. For example, the current limit for couples combined is $304 per fortnight. 

If your income, including your UK pension, is $2000 per fortnight, the first $304 will not be assessed. 

The remaining $1696 will reduce your pension by $848 per fortnight. Therefore, based on a couples combined full Age Pension of $1381.40, you would receive $533.40 per fortnight. These figures are for guidance only, and are based on the current limits, which you can view here.

When you advise Centrelink of your income and assets from overseas, it will convert the value into Australian dollars. 

Once you have been granted a UK pension, the amount will stay the same – it is not indexed. This means that the only fluctuation in the value of your payment will be due to the exchange rate. 

Centrelink currently uses the Commonwealth Bank buy rates that apply on the fifth business day before the first of each month.

Centrelink will update your income details on the first of each month and apply this rate of income to your Age Pension payment.

This is only a guide to what you may be entitled to. You can make an appointment to speak to a Centrelink Financial Information Services Officer on 132300. This is a free service, which you can access at any time, whether a customer of Centrelink or not, and will help you to better understand your entitlements based on your individual financial position.

Written by Ben

RELATED LINKS

Can I still receive an Australian Age Pension living overseas?

Learn more about claiming your Age Pension when you go to live overseas.

Can you get Age Pension in a couple if your partner is working?

How will you be assessed as a couple? Check your eligibility here?

Super changes will improve retiree living standards

The Actuaries Institute has welcomed changes to Australia's superannuation system.



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