Financial Care Services Newsletter
by Christine Hopper
Volume 12 Edition 7 – 29 July 2022
Christine at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles
Help with planning for retirement
Is your objective to retire and live off the Age Pension after working and paying taxes for forty plus years?
The Australian Social Security system is intended to ensure that all Australian citizens could have at least a basic standard of living in retirement.
You might be surprised to learn that the intention of the Superannuation Guarantee system of compulsory employer contributions is to enable more retirees to be too wealthy to qualify for the full Age Pension.
Thus the Age Pension is a ‘safety net’ for seniors who have not accumulated enough resources to finance their most basic needs.
Consequently, retirees must navigate a qualification process to actually claim any Age Pension.
The Age Pension has an age qualification
The Age Pension is for citizens who are ‘too old’ to be expected to continue earning an adequate income from work.
The Age Pension Age is the minimum age for the Age Pension.
The Age Pension Age is increasing to reflect the general improvements in health and working capacity of Australian citizens.
For many decades men qualified for the Age Pension at age 65 years.
The Age Pension Age for women was 60 years until June 1995.
Then the Age Pension Age for women increased gradually so that women born after 1948 have the same Age Pension Age as men.
In 2022, new applicants for the Age Pension must have attained age 66 years and 6 months.
The Age Pension has an Australian residency qualification
Then there is a residency test for the Age Pension.
Applicants for the Age Pension must have lived in Australia as an Australian citizen or ‘permanent resident’ of Australia, for at least ten years after attaining age sixteen years.
Your ten year residency period must include a continuous period of at least five years.
The amount of your Age Pension depends on who you live with
The full Age Pension payment rate for ‘a member of a couple living together’ is lower than the rate for ‘a single person’.
At Centrelink ‘a couple living together’ is any two adults who share domestic arrangements and present socially as a couple.
If one member of a couple enters permanent residential aged care then Centrelink could treat them as ‘a couple separated by illness’.
Similarly if one member of a couple goes to prison, the partner on the outside could be treated like ‘a member of a couple separated by illness’.
When the relationship deteriorates but neither person has the resources to move out, Centrelink could assess each of the former members of the ‘couple living together’ as now ‘separated under one roof’.
Centrelink have a special form to assess if you are truly ‘separated under one roof’.
The amount of your Age Pension is ‘means tested’
As a long term Australian citizen who has attained age 66 years and 6 months, you could apply for an Age Pension.
But how much, if any, Age Pension you could actually be paid depends on your circumstances.
Firstly, your personal circumstances determine if you are ‘single’ or ‘a member of a couple’ at Centrelink.
If you are ‘legally blind’ then you could be paid the full rate of Age Pension for your personal circumstances, once you have satisfied the age and residency qualifications.
Your actual payment rate depends on whether you are ‘single’ or living as ‘a member of a couple’ at Centrelink.
Secondly, for those of you who are not legally blind, the Asset Test or the Income Test, could cut down your payment rate or totally exclude you from any Age Pension.
Remember, Centrelink calculate your Pension rate reduction under the Asset Test and under the Income Test then apply the larger Pension reduction rate.
Yes, Centrelink will look at your position under each test separately then apply the means test that hits you the hardest.
When would you be eligible for an Age Pension
If you were born before 1956 then you would reach your Age Pension Age before July 2022.
You need a full Birth Certificate or a current Passport to confirm your eligibility at Centrelink.
Then you need to prove that you have lived in Australia for ten years as a citizen or ‘permanent resident’.
If you have lived in Australia for most of your adult life then you could apply for an Age Pension as soon as you attain your Age Pension Age.
Help to decide when to apply for an Age Pension
Would the means testing exclude you from any Age Pension in July 2022 as a single person?
The means testing Allowances for singles were increased effective 1 July 2022.
A single Age Pensioner could have an assessable income of $190 per fortnight before the Income Test bites.
The Income Test would exclude you from the Age Pension if you are single at Centrelink and your ‘income’ exceeds $1,989.60 per fortnight.
If the Income Test does not exclude you from the Age Pension then you need to check the Asset Test.
The Asset Test Allowance has increased to $504,500 for a single person who is not a homeowner at Centrelink.
Alternatively, a single Age Pensioner could have a home plus $280,000 of other assets before the Asset Test starts to impact her pension rate.
If you are single with a home plus $578,000 or more of other assets, then you would be excluded from the Age Pension in July 2022.
If you were single but not a ‘homeowner’ then you could have $804,400 of assets, before the Asset Test excluded you from the Age Pension,
Would the means testing exclude you from any Age Pension in July 2022 as a member of a couple?
The means testing Allowances for couples were increased effective 1 July 2022.
A couple at Centrelink could have a total combined assessable income of $336 per fortnight before the Income Test starts to impact their Age Pensions.
The Income Test would exclude you from the Age Pension if you are a member of a ‘couple living together’ and the total ‘income’ of yourself and your partner exceeds $3,048 per fortnight.
Yes, your partner’s income is counted in full even if your partner does not qualify for an Age Pension.
If the Income Test does not exclude you from the Age Pension then you need to check the Asset Test.
The Asset Test counts all of the assets of the couple, what they own jointly plus any assets that either one owns separately.
There is a little mercy, in that superannuation accounts that are still in accumulation phase could be excluded whilst the owner is too young for an Age Pension.
The Asset Test Allowance increased to $643,500 for a couple who do not own their home.
A couple could have $419,000 of assets in addition to their home, before the Asset Test impacts their Age Pension payment rate.
If you are a member of a ‘couple living together’ with a home plus more than $871,000 of other assets, then you would be excluded from the Age Pension in July 2022.
If you were member of a ‘couple living together’ but not a ‘homeowner’ then you could have $1,095,500 of assets, before the Asset Test excluded you from the Age Pension.
Help with checking your situation against the qualification and means tests.
Christine Hopper helps clients check their situation against the residency and means tests for the Age Pension.
Contact Christine for the Financial Care Services Age Pension data form to prepare for your Age Pension ‘personal financial factual information ‘consultation with Christine.
You will also receive the Client Services Guide for Christine Hopper that gives you essential information about how Christine works with her clients.
You could then meet with Christine to look at your personal situation.
Christine could explain how Centrelink could calculate ‘income’ for your situation.
If the means tests would exclude you from the Age Pension then you could consider a Commonwealth Seniors Health Card.
A younger partner might be eligible for a Low Income Health Card when the older partner has an Age Pension.
If you have not been excluded from the Age Pension by the age or residency qualifications and you hope that the means tests would not exclude you then you could apply for an Age Pension.
Centrelink ‘free’ ‘personal factual financial information’ consultations
The Centrelink Financial Information Service, “FIS”, enables Centrelink customers to sit down with a FIS officer and discuss their potential Centrelink benefits.
The FIS officers are not ‘licenced financial planners’.
Thus the FIS officers may provide ‘personal factual financial information’ but not ‘financial advice’.
Appointments with FIS can only be made via the Centrelink seniors phone system.
You cannot make an appointment while you standing in your local Centrelink office.
To ask a question of a FIS officer or make a FIS meeting appointment, you must call 132300.
You need to enter your Centrelink Customer Reference Number, “CRN”, to stay in the call system.
When the call machine asks what you are calling about, you say, “Financial Information”.
The Centrelink call system is less congested early in the morning, soon after the 8 am opening.
The wait times could be shorter mid-week than on the first and last working days of the week.
If you value your time, you could arrange a ‘personal factual financial information’ consultation with Christine Hopper.
Christine charges fees for advising her clients.
How to apply for an Age Pension
Centrelink would like you to apply online for your Age Pension.
You are expected to be able to establish a MyGov account then link your MyGov account to your Centrelink account.
Using your smart device you then ‘prove your identity’ to obtain a Centrelink Customer Reference Number, your CRN.
Next you could complete an online Claim Age Pension and upload it with your Income and Assets Declaration plus electronic copies of your supporting documents.
Alternatively, download the forms from the Centrelink website, complete the forms in ink, photocopy your supporting documents and mail the pack to Centrelink in Canberra.
Help to complete a paper Claim for Age Pension
If Centrelink forms are too hard for your skillset then Christine could help you write your data into a paper form.
Christine has neat handwriting; she could write your data into the correct little box on the Centrelink form.
You would then need to read through the form to check that your personal data was written in correctly.
Then you sign the completed form and mail it to Centrelink.
You might choose to take your Age Pension Claim to a Centrelink office.
Then you could ‘prove your identity’ by showing your personal documents.
Christine at Financial Care Services your independent adviser
Christine at Financial Care Services is an independent adviser specialising in retirees of modest means and aged care entrants.
Our core values include working with clients in claiming DVA and Centrelink entitlements.
Christine at Financial Care Services is here to answer your Age Pension questions and guide your understanding of aged care costs.
Help with Centrelink challenges is available from Christine Hopper at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles.
Christine has neat handwriting just right for inserting your data into small printed spaces.
She helps clients complete Centrelink forms.
Christine could help you with collating your supporting documents and then mailing your form to Centrelink.
Assistance with completing Age Pension Claims and the Commonwealth aged care means testing forms is available to clients of Christine at Financial Care Services.
Christine charges fees based on the work involved in advising you about pensions and aged care fee solutions.
To make an appointment for confidential, independent and professional advice about aged care, retirement lifestyle costs, granny flat or Age Pension issues please contact Christine Hopper or call +61 3 9808 0338.
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Christine Hopper
Financial Care Services
Independent aged care, strategic lifestyle and Social Security advice for seniors in Melbourne, Victoria, Australia
Telephone – call +61 3 9808 0338
Email – contact info@financialcareservices.com.au
Address – mail to 2B Thomas Street, Camberwell Victoria 3124
Website – visit financialcareservices.com.au
LinkedIn – connect https://www.linkedin.com/in/christinehopper1
Past newsletters – see http://financialcareservices.com.au/newsletters/
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Disclaimer: The information contained in this newsletter is of a general nature only and does not constitute “financial advice”.
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.