Financial Care Services Newsletter

by Christine Hopper
Volume 14 Edition 2 – 29 February 2024

Christine at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles

Would I qualify for an Age Pension?

Australian Social Security ensures that citizens have the financial resources for at least a frugal minimal standard of living when they cannot earn an income from work.

The Australian community is willing to support Australians who are too old to work but have no other income.
However the Australian taxpayer is wary of paying Age Pensions to people who have not really been part of our community.
Thus recent arrivals and former Australian residents who choose to live elsewhere, are unlikely to qualify for the full range of Australian social security benefits.

Hence the ‘Australian permanent residency’ requirements for Age Pension.

The ‘Australian permanent residency’ test has three parts.

1 The Age Pension claimant must be entitled to be living permanently in Australia.

You must satisfy Centrelink that you are entitled to live permanently in Australia.
Therefore you must hold Australian citizenship or have entered Australia on a visa that allowed for you to stay indefinitely as a ‘permanent resident’.

2 The Age Pension claimant must have been a long term permanent Australian resident.

The next part of the permanent residency check is proof that you have actually lived in Australia for ten years as an adult permanent resident.

You must have a permanent residency period of at least five full years in one block after you attained age 16 years.
Your other five years could be split across a few periods of living in Australia as an adult.

If you have recently arrived in Australia then you must live here for the full ten years after obtaining your ‘permanent residency’ before you can apply for an Australian Social Security Pension.
Any period between your entry to Australia on a valid visa, and being granted ‘permanent residency’ cannot count towards your ten year waiting period.

The residency rules allow for some exemptions in special cases.
For example, people who come to Australia under refugee resettlement programs are allowed some exemptions from the permanent residency requirements.

3 The Age Pension claimant must currently be living permanently in Australia.

The final step in the residency test is to show that you are actually living in Australia permanently when you apply for an Age Pension.

Living permanently in a home that you own

If you live in a home that you own then your last Municipal Council Rates Notice, a Driver Licence issued to you at that address and/or a recent electricity bill for that same address, could be could enough to prove that you really are here permanently.

But what if you have been working overseas and have just returned to retire in Australia?
If you already own a home then you would be expected to be living in your own home by the time that you applied for an Age Pension. You could show Centrelink that the electricity bill is in your name now that you have moved back into your home.

Long term renters

If you apply for an Age Pension while you are living long term in a rental property then you could show Centrelink your lease document.
A copy of your lease and recent rent invoice showing your weekly rent amount will help you claim Rent Assistance as an Age Pensioner.

Returning to Australia to retire as an Age Pensioner

If you have come home to Australia permanently but do not own a home here then you need to convince Centrelink that you are here to stay long term.
If you are seriously intending to make Australia your home then you would be renting a house or a self-contained apartment with a signed lease for at least six months.
Retrieving your furniture, household items and personal stuff from commercial storage, is also evidence that you mean to stay long term.

In contrast, staying with family, or in ‘backpacker’ style accommodation or short-term rentals, is not accepted as evidence of intention to stay in Australia permanently.

Similarly, maintaining a home overseas and arriving in Australia with just a suitcase is unlikely to convince Centrelink that you are here permanently.

Beware if you leave Australia within two years of retiring here then Centrelink could cancel your Age Pension.
The big Commonwealth computer would alert Centrelink that your Passport was departing Australia.

Living permanently in a country that has a Social Security Agreement with Australia

Former Australian permanent residents who are now living in another country that has a current Social Security Agreement with Australia might be allowed to apply for an Age Pension whilst living permanently in that country.

The list of Social Security Agreements changes frequently, you need to check with your host country.
Agreements with some countries have ended or closed to new claimants.

Whom you share your life and resources with impacts your need for taxpayer support.

Life partners are assumed to share their homes and financial resources.
The theory is that two adults sharing a home could have lower basic costs per person, than if they each lived alone.

Our social security benefits are expected to just cover the costs of a frugal lifestyle.
Therefore, the personal circumstances of Pension claimants are significant factors in determining their needs for taxpayer financed income support.

A member of a ‘couple at Centrelink’ could only be paid a maximum of the partnered rate of Age Pension.
But their actual Pension payment, if any, is impacted by the couples means test applied to the total assets and assessable assets of both members of the couple.

A couple at Centrelink is any two adults who share domestic arrangements and present socially as a couple.
You become a member of a couple at Centrelink very day that you start cohabiting with your new partner.
Immediately one partner moves out, you could inform Centrelink that you have separated and ask to be treated as a single person at Centrelink.

When the relationship breaks down but neither member of what was a ‘couple at Centrelink’ can afford to move out of the jointly owned home, you could ask to be treated as ‘separated under one roof’.

Informing Centrelink of changed personal circumstances.

The Pensioner is responsible for updating Centrelink about their personal circumstances, assessable income and assets.
You are expected to update Centrelink within 14 days of a significant change in your personal circumstances or financial position.

Changes in entitlements favourable to you, would not be backdated to the date you could have been paid at a higher rate.

But changes that reduce or cancel your benefits must be applied retrospectively back to the effective date of the change.
Any overpayment of Pension benefits must be recouped by Centrelink.

Remember it is your responsibility to update Centrelink.
Do not defer your update until after that neighbour or a member of your extended family, informs Centrelink about your inheritance and the visitor who is often ‘just staying a few days’ at your home.

What is the maximum Age Pension?

The Age Pension is intended to finance a very modest standard of living.
Many senior homeowners could just get by with the full Age Pension and no other money.

The maximum full rates of Age Pension were last increased in September 2023.
The single person rate of Age Pension is $1,002.50 per fortnight.
A single Age Pensioner is also paid Pension Supplements of $94.20 per fortnight.

The maximum Age Pension that currently payable to a member of a couple is $755.70 per fortnight, with Pension Supplements of $71.00 per fortnight.
Each member of a couple must qualify for an Age Pension before they can collect their individual Age Pension.

Rent Assistance is available for Age Pensioners who live in rental accommodation but not public housing tenants.
Seniors who need to pay rent often find that they struggle to cover their other costs from their Age Pension and Rent Assistance.

The Age Pension is a safety net for seniors who are unable to earn a fulltime income.
The Pension does not support a lavish lifestyle.

For a modest lifestyle in an active retirement, you would need some additional financial resources such as superannuation or personal savings.
Maybe you could plan to keep working at least part-time, after qualifying for your Age Pension.

What are the Asset and Income cut-off levels for the Age Pension?

See next month’s Newsletter for the Age Pension rates as increased by the March indexation increase.
The new Asset and Income Test cut-off levels for single and partnered Pensioners could be provided then.

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 Health Card and 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, Low Income Health Card and Commonwealth Seniors Health Card 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 health cards, 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 Christine@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.

© 2024 Christine Hopper @ Financial Care Services. All rights reserved.