Age Pensioner financial assets for income deeming

Age Pensioner financial assets for income deeming

by Christine Hopper

Why define Centrelink Age Pensioner“financial assets”?

Centrelink Age Pensioner Income Tests use the deemed financial income from your financial assets rather than your actual earnings from financial assets. Therefore, you need to identify your Centrelink Age Pensioner financial assets before you could calculate your deemed financial income.
Then you could use your deemed financial income to see how hard the Income test could reduce your potential Age Pension or DSP.

All loans, deposits of money and stock exchange listed investment are included in Centrelink Age Pensioner Financial assets

At Centrelink Age Pensioner financial assets include the basic banking accounts and term deposits, investments in managed investment funds, investment bonds, commercial loans and holdings of shares in companies listed on a stock exchange.

Deposits with building societies and credit unions, debentures with commercial entities and deposits with church development funds, “community funds” and “holiday clubs” are counted as Centrelink Age Pensioner financial assets.

Both carefully documented and informal loans to family and friends are counted as Centrelink Age Pensioner financial assets. If you did not get adequate value for any money that has gone from you to someone else then that money could be a “loan” or a “gift” at Centrelink.
A “loan” usually implies eventual repayment or remembering of the amount as part of the lender’s estate in his Will. A donor does not expect a “gift” to be repaid.

Excess gift amounts count as Centrelink Age Pensioner financial assets

Also included in your financial assets are any “excess gift” amounts.
At Centrelink gifting occurs when you transfer the title of a property or sell an asset for less than its market value. Centrelink does not prohibit gifting. But Centrelink would record an “excess gift” if your total gifting exceeds $10,000 in any financial year and/or $30,000 over any five year rolling period.

Superannuation fund account exclusion from Centrelink Age Pensioner financial assets

If you have not attained your Age Pension Age then your accumulating superannuation account would be excluded from your financial assets.
Once you attain your Age Pension Age and apply for a Centrelink Age Pension or Health Care Card all of your superannuation accounts would be included in your Centrelink Age Pensioner financial assets.

For seniors who had started a Centrelink DSP or Age Pension or Commonwealth Seniors Health Care Card, and a superannuation allocated pension before 2015, that allocated pension account could be excluded from Centrelink financial assets for the purposes of the ongoing Centrelink benefit. Read more about the changes for new allocated pension contracts and/or new Centrelink cards from January 2015.

Other Centrelink Age Pensioner financial assets

For the purposes of calculating your deemed financial income, your financial assets includes any holdings of gold bullion and other precious metals, many life insurance policies, most superannuation account balances and some funeral bonds.

Gold bullion and other precious metals
 investors might prefer to purchase gold bars rather than bank deposits, as a means of storing their wealth in uncertain times. But Centrelink would treat your gold bars as financial assets just like your bank deposits.

Life Insurance
Life insurance policies which could be surrendered for a lump sum cash payment count as financial assets. Thus whole of life assurance and endowment assurance policies together with investment bonds written by life insurance companies and friendly societies are financial assets. These life assurance policies payout a lump sum when the life insured dies or the term of the endowment assurance policy is fulfilled.

Risk only life insurance policies are excluded form the definition of financial assets. These risk only insurance contracts payout only in the event of death or disablement as defined in the contract.
Any payment received would become part of your Centrelink financial assets once it reaches your bank account.
There is no payout from a risk only insurance policy if the life insured remains fit and healthy for the whole period of the contract.

Overseas financial assets are included in Centrelink Age Pensioner financial assets

All of your financial assets count at Centrelink even if the asset is outside of Australia. Your gold bullion held in a secure store in London, your Dutch bonds and your shares listed on the New York stock exchange are financial assets for Centrelink purposes.

Special exclusions from Centrelink Age Pensioner “financial assets” for income deeming

Special rules determine the “income” to be counted at Centrelink for lifetime and long term annuity contracts. Therefore these annuity contracts are excluded from the Centrelink Age Pensioner financial assets for deeming.
Ongoing Centrelink customers could continue to have their pre-2015 superannuation allocated pension accounts treated like annuities.

Special rules determine how your annuity and allocated pension accounts are counted for the purposes of the Centrelink Age Pensioner Asset Tests. In many cases, the current ‘value’ of your annuity contract counts for the Asset Test even though you cannot surrender the contract for a lump sum payment. Some lifetime annuity contracts purchased before 20 September 2007 are not counted at full value for the Asset Test, these annuities are partially or fully exempt.

Estimating your Income for a Centrelink Benefit

The income definition for the DSP and Age Pension is different from the income, definition for Health Care cards. The Income Test for Centrelink Pensions uses the deemed income on your “financial assets” together with any other Income.

About Financial Care Services

Help with Centrelink DSP and Age Pension Income Tests and Asset Tests
Help is available.
Christine at Financial Care Services is experienced with Centrelink financial asset definitions, means tests and Pension Applications.

Financial Care Services offers Short Consultations to help you check your financial position against the Centrelink financial means tests for an Age Pension, DSP or a Carer Payment.

To prepare for your Age Pension Short Consultation email now for the Financial Care Services Age Pension Data form. You will also receive the Financial Care Services Financial Services Guide including the Financial Care Services Privacy Policy.

Christine could also assist you with collating your personal data, estimating how much Pension you could expect to receive and completing the Centrelink forms for you to sign. Normal hourly rate consultation fees apply for assistance with personal data collation, completing Centrelink forms and attendance at a Centrelink office with you.

Financial Care Services is an independent aged care financial advisory service specialising in aged care entrants and Centrelink Pensions. 

As an independent financial adviser Financial Care Services charges fees based on the time and expertise required to advise our clients. 

Financial Care Services core value in financial advice is to assist with your money plan in the responsible management of your assets to generate the cash flow needed for your lifetime planning. Christine at Financial Care Services understands both the DVA and Centrelink Pensions systems and the Commonwealth aged care fee arrangements.

For confidential, independent and professional advice about Centrelink, lifestyle or financial issues please contact Christine Hopper 03 9808 0338 to book an appointment or email your enquiry. 
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.
All eligibility for Commonwealth benefits will be determined by Centrelink or DVA, based on your personal position as documented and the legislation and Regulations in force at that time.
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To make an appointment for professional advice, call Financial Care Services 03 9808 0338