If I retire now could I get any Centrelink early retirement benefits?
Your eligibility for Centrelink early retirement benefits depends on your age, your personal circumstances and your financial resources and other assets. Remember Centrelink administers the Social Security Act which is about providing support to long term Australian residents in constrained financial circumstances.
The Age Pension
To be eligible for the Age Pension from Centrelink you must be an Australian resident who has attained the current Age Pension Age of 65 years. You need to have accrued ten years of Australian residency before you can be eligible for an Age Pension.
Therefore if you are an Australian resident who has attained age 65 years then you could consider how hard the Asset Test and Income Test would impact on your potential Age Pension amount.
To qualify for the full rate of Age Pension a Single person must have an Income* of under $156 per fortnight and Assets of no more than $339,250 or be a ‘homeowner’ with no more than $196,750 of other assets.
A Single person would be ineligible for any Age Pension if her Income reached $43,100 per year and/or her Assets reached $840,000 or $697,000 in addition to her home.
If you are a member of a Couple at Centrelink then the means testing is based on your combined Income and the total of your combined Assets. Thus if your partner is still working full-time then you are unlikely to qualify for any Age Pension. Remember to check your position against the Centrelink interpretation of being a member of a Couple at Personal Circumstances at Centrelink or DVA
The maximum Age Pension payment including all Supplements is $827.10 per fortnight for a Single Pensioner as at January 2014.
Each eligible member of a Couple could receive a maximum payment of $623.40 per fortnight including all Supplements as at January 2014.
All Age Pensioners are issued with Pensioner Concession Cards.
Income Support Benefits for younger Australian Residents
You might qualify for Newstart Allowance or Disability Support Pension (DSP) if you have stopped working but you have not yet been breathing for a full 65 years.
Centrelink does provide some ‘income support’ payments to people of limited means who are have not attained Age Pension Age. These are the Disability Support Pension (DSP) and the Newstart Allowance. Special provision is made for Australian Residents who are full-time carers for adults with significant disabilities.
Be aware that you cannot finish work on Friday and be eligible for a Centrelink income support payment on the next Monday. Centrelink apply a ‘waiting period’ before you become eligible for DSP (except DSP – Blind) or Newstart Allowance.
For example, if you received a retrenchment payout calculated as ten weeks of your normal pay then Centrelink could apply a ten week waiting period before you could start receiving a Newstart Allowance. The ‘waiting period’ might not start until you have registered at Centrelink as a Newstart or DSP claimant.
Disability Support Pension (DSP)
Disability Support Pension (DSP) is for Australian residents who could not work at Award pay rates, for at least 15 hours per week and who are expected to remain incapacitated for work for at least 24 months.
DSP is paid at the same rates and subject to the same Income and Asset Tests as the Age Pension. DSP recipients are also issued with Pensioner Concession Cards.
If you are an Australian resident who lost your vision to the extent that you are certified as ‘legally blind’ then you could apply for the Disability Support Pension – Blind. DSP – Blind is not subject to any financial means testing and there is no waiting period to qualify for payments. Read more about DSP – Blind at Full Centrelink Pension for legally blind residents
The Newstart Allowance is for Australian residents who could work immediately but have not found suitable jobs. Residents who are currently medically unfit for work but are not so severely or permanently incapacitated as to qualify for DSP might qualify for the Newstart Allowance.
Newstart recipients are expected to be actively looking for work, undertaking training or providing medical certificates regarding current incapacity for work. If you are aged 55 years or older, these ‘activity-test’ requirements are more flexible.
Newstart Allowance is paid at a lower rate than the Age Pension as the Newstart Allowance is intended to tide people over for a short period rather become a permanent income source. The Income and Asset Tests are more restrictive for Newstart Allowance than for the Age Pension or DSP.
A Single person could receive a maximum Newstart Allowance payment of $501 per fortnight.
Any Income* in excess of $62 per fortnight could reduce the Newstart Allowance payment. The standard rules mean no Newstart Allowance for a Single person whose fortnightly Income reaches $942.50. But a Single, aged 60 or over who had been receiving Newstart payment for at least nine months continuously could retain some Allowance until her fortnightly income reached $1,022.50.
Newstart Allowance recipients are issued with Health Care Cards which are allowed to be used when you are transitioning into the workforce.
Health Care Cards
If you have retired but are do not qualify for any income support payments from Centrelink then you might be eligible for a Health Care Card. The Low Income Health Care Card is for Australian residents under age 65 years and the Commonwealth Seniors Health Care Card is for Australian residents who have attained Age Pension Age. These Health care Cards are subject to strict Income Tests.
Commonwealth Seniors Health Care Card
The Commonwealth Seniors Health Care Card is for Australian residents who have attained Age Pension Age and satisfy the Income* Test.
A Single person must have an adjusted taxable income of no more than $50,000 per year to qualify for the Seniors Health Care Card.
The Income Test cut off for a Couple is $80,000 per year or $100,000 if at least one member of the couple live in residential aged care.
The Commonwealth Seniors Health Care Card provides the same Commonwealth PBS concessions as a Pensioner Concession Card.
Commonwealth Seniors Health Care Card holders receive a quarterly Seniors Supplement payment but are not eligible for rebates on utility bills or Victorian Council rates. A Single person received a maximum of $303 of Seniors Supplement in December 2013.
Low Income Health Care Card
The Low Income Health Care Card is for Australian residents under age 65 years who continue to satisfy the Income Test. To qualify initially or to renew a Low Income Health Care Card, the Income Test requires that a Single person must have an average weekly Income* of $501 measured over the last eight week period.
Low Income Health Care Cards are only valid for a maximum of six months. At the end of the six months you must reapply and again satisfy the Low Income Health Care Card Income Test.
You must stop using your Low Income Health Care Card if your eight week average income increases to more than 25% above the Income Test limit.
Thus in January 2014, a Single person could qualify for a Low Income Health Care Card with an average income of $501 per week but must stop using the Low Income Health Care Card if her eight week average income reaches $626.25 per week ($5,010 for the eight weeks).
Low Income Health Care Card holders are entitled to the same concessions as Pension Concession Card holders.
Once you receive a Low Income Health Care Card you need to register the Low Income Health Care Card number with your utility providers to get the discounts. You must consent to the utility provider checking your ongoing eligibility with Centrelink.
Income at Centrelink
* Income at Centrelink is defined differently for assessing Pensions, Allowances, the Low Income Health Care Card and the Seniors Health Care Card. You must check your personal situation against the rules and definitions for the Centrelink benefits that could apply to you.
Personal Circumstances at Centrelink or DVA
Personal circumstances at Centrelink means ‘who do you live with’ and ‘do you have a partner who is living separately (in jail or in aged care)’.
Remember that at Centrelink a Couple is any two adults who share domestic arrangements and present socially as a couple. Centrelink require disclosure of all of the Income and Assets of both members of a Couple whenever either or both of them are applying for Pensions, Newstart Allowance or Health Care Cards.
Read more about the Centrelink assessment of Couples termed “Personal Circumstances” at Centrelink or DVA.
Help is available.
Christine at Financial Care Services is experienced with Centrelink Pensions and Health Care Card Applications.
Financial Care Services offers Short Consultations to help you see if you could get a Health Care Card or some Age Pension and to estimate how much Pension you could expect to receive.
If you think that you might be eligible for a Health Care Card or a part Age Pension you can call Christine on 03 9808 0338 to arrange a Short Consultation, 45 minutes in person or by telephone and/or email to discuss your position. Please ask for a special ‘short consultation’ when you book your appointment.
Christine could assist you with collating your personal data and completing the Centrelink forms for you to sign. Normal hourly rate consultation fees apply for assistance completing Centrelink forms and attendance at a Centrelink office with you.
If you would like further confidential, independent and professional advice about Centrelink, lifestyle or financial issues please contact Christine Hopper 03 9808 0338.
Disclaimer: The information contained in this website is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations. © 2014 Financial Care Services Pty Ltd. All rights reserved.
To make an appointment for professional advice, call Financial Care Services 03 9808 0338