How to avoid a Centrelink debt

by Christine Hopper

If you receive a Centrelink pension payment, you need to tell Centrelink about your income and assets and about any changes in your personal circumstances. Failure to update Centrelink could cause you to be overpaid.  Overpayments result in debts at Centrelink and reduced pension payments later.

Centrelink means testing is based on the Income, Assets and Personal Circumstances of pensioner clients.  Thus any change in value of the pensioner’s assets or income from work or rents from property must be advised to Centrelink.

Where Centrelink are paying a reduced rate or ‘part pension’ because the pensioner has substantial financial assets, Centrelink generally send a request for updated information.  Each February and August part Age Pensioners expect to be asked to confirm their investment holdings and advise their bank balances.  Centrelink can access current market prices for listed securities and the major managed funds to calculate the new Asset and Deemed Financial Income amounts.

Centrelink try to process the updated financial data at the same time as the regular increases in the full Age Pension rates in March and September.  If all data is available for processing then the amount of the part pension is adjusted on 20 March and 20 September to allow for both the new full rate of Age Pension and the individual’s updated financial position.

Centrelink clients must report any major changes to Centrelink within 14 days of the change.  Major changes requiring prompt reporting include the receipt of an inheritance or a substantial gift or settlement of an injury claim.

Moving home is a major change whether you are downsizing or going into a seniors residence.  Centrelink also need to know about changes in ‘personal circumstances’ including if the pensioner is part of a ‘couple at Centrelink’.   More information on this topic in the Financial Care Services is available in the newsletter for April 2011 Who is a ‘couple at Centrelink’?

If you would like further confidential, independent and professional advice about Centrelink, lifestyle or financial advice, please contact Christine Hopper (03) 9808 0338.