A resource guide to all Australian pensions

Are you looking forward to retirement? When Monday morning arrives, do you dream about all the other things you could be doing? Some people can’t wait to retire while others dread leaving the workforce.

With no definitive retirement age in Australia, the date you leave “the force” comes down to personal circumstances and whether you can afford it.

However, most people retire once they can access the age pension. That magic number is 65-and-a-half-years-old, though it creeps up six months every two years (until July 2023). From July 2019, the age pension age will be a much more straightforward 66 years.

About 65 per cent of older Australians rely on a government pension or allowance as their main source of income during retirement, according to the government’s Money Smart website.

Centrelink, a division of the Department of Human Services, pays the age pension fortnightly. The maximum rate a single person can receive is $894, including the energy supplement and maximum pension supplement. Couples receive $674 each or $1348 combined.

Yearly, on current age pension rates, a single person can receive a maximum of $23,254, including the above-mentioned supplements. A couple receives $17,529 each or $35,058 combined.

How old is old enough?
A WYZA member recently wrote to ask whether their sibling is eligible for the age pension.

“My brother was born in October 1952. I know the rules have changed at what age you are eligible for the aged pension. Can you tell me ages that you have to be now to obtain the aged pension?”

While the member’s brother is inching closer, he’s not quite old enough to qualify for the age pension. Assuming he was born on October 1, he’d be eligible on April 1 2018, when he turns 65-and-a-half.

Am I “Australian” enough?
To get the age pension, you need to have been an Australian resident for at least 10 years in total. And for at least five of those years, there must be no break in your residence.

However, for some Australian residents these rules don’t apply. Refugees and former refugees, women whose partner died while they were both Australian residents receiving the partner allowance, widow B pension, and the widow allowance are exempt from the residence rules.

Am I too rich?
How much age pension you receive depends on if you are still working when you reach age pension age and your assets. Singles can earn $168 per fortnight before their age pension reduces. Couples can earn $300 a fortnight combined before their payment is affected.

Do I have too many assets?
The value of your assets also affects the age pension. Your home does not count when you take the assets test but it does apply to its contents, and any other assets owned, such as vehicles, boats, property, superannuation holdings, and funds in bank accounts.

A home-owning single can hold $253,750 in assets before their full age pension is reduced. Couples who own their home can have $380,500 in assets before their age pension is affected.

Non home-owning individuals can hold $456,750, while couples that don’t own their home can have $583,500 before their full age pension is reduced.

Part pensions cancel for single homeowners when the value of their assets reaches $552,000, while for couples who own their home that figure is $830,000.

Single non-homeowners on the part pension can hold $755,000 in assets, while couples that don’t own their home can have $1,033,000.

Need to know: Disability support pension
If you’re between the age of 16 and 65-and-a-half (age pension age) and have a permanent medical condition that stops you working, you can get the disability support pension.

The amount you receive depends on your income and assets.

Need to know: Sickness allowance
Centrelink pays a sickness allowance to people who can’t work or study for a while because of illness, injury, or disability.

For this you need to be at least 22 and under 65-and-a-half (age pension age).

Need to know: Widow B and wife pensions
New grants for both these pensions stopped in the 1990s but for people receiving them before this time, they can keep getting them for as long as they’re eligible or until they transfer to the age pension.

Widow B was a payment for widows who did not get the parenting payment, had limited money, and lost the financial support of their partner. The wife pension was an income support payment for women whose partner got the age pension or disability support pension.

Are you well advised financially to maximise pension benefits? WYZA MONEY offers a complimentary obligation-free initial consultation with one of our expert advisors.

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