The case for checking your age pension eligibility

By Grace Ormsby

December 16 2019
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Older Australians need to be more aware of their eligibility requirements for an aged pension and reassess their situation on a regular basis, a financial planner has urged.

Emma Arthur, Lifewise Financial Solutions’ financial planner and director, has told nestegg that too often she sees clients coming in that have been told in the past that they were ineligible for an aged pension, but over time their assets have depleted and they have become eligible “at the very least” for a part pension but weren’t made aware of it.

Importantly, Ms Arthur said, “you only need to receive $1 of Age Pension to be eligible for the healthcare card”.

This provides thousands of dollars’ worth of benefits to recipients via way of discounts and reductions in utilities, rates, registrations, prescriptions and doctors, among other services.

She said an entitlement to an aged pension “definitely helps a lot of people fund their retirement plan, and we often find that clients receive either a full or partial Age Pension and supplement this via drawdowns from personal account-based pensions to meet ongoing living expenses”.

There’s a place for strategic advice around structuring, asset reduction and “Centrelink-friendly investments”, according to the financial planner, who considered all of these to be important considerations around the Age Pension to both maximise entitlements and limit the potential impact of any reductions.

In her role, Ms Arthur said she regularly sees the reliance on an Age Pension increase throughout retirement.

“We see a higher level of spending in the earlier retirement years where people are fit and well and have the ability to travel more widely.”

In turn, this “results in a depletion of assets in the earlier years, which in later years can certainly result in an increased reliance on [the] Age Pension”.

It’s important that older Australians do their research “and understand what the assets test limits are and where you sit”, she flagged.

To navigate retirement planning and advice post-retirement, Ms Arthur had the following words of wisdom for nestegg readers:

“Seek advice, have someone review your situation, build up your retirement nest egg, make sure you have things invested in the best structures to minimise any personal tax [and] maximise any potential entitlements to aged pensions.”

In addition, she advised individuals to review their investments to have a firm idea of how much income you will need during retirement so as you have a realistic expectation of how long the funds will last.

But most importantly, “enjoy your retirement”!

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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