Financial Care Services Newsletter
Volume 11 Edition 5 – 31 May 2021
Financial Care Services, the specialist adviser to seniors in transition to new lifestyles
Just a small increase in Age Pension Age
Your Age Pension Age is the age at which you could become eligible for taxpayer support because you are really old.
Our Social Security laws provide for a means tested Age Pension for seniors. The Age Pension is intended to provide a modest standard of living for seniors who are considered too old to work enough hours to earn a basic level of income.
Looking back over our lifetimes, we could notice that the average period of healthy working life has increased slightly for each successive generation of Australians. Consequently the Age Pension Age for being considered too old to support yourself from work earnings alone also increases gradually.
The Age Pension Age for females has moved up from 60 years for women born before July 1935 to match the male Age Pension Age of 65 years for citizens born before July 1952. Next month the last of the Australians born in the 1954/5 financial year will reach their Age Pension Age of 66 years.
Their younger siblings are deemed to be healthier and fit to work for longer. Thus the next cohort who were born after June 1955 will have to wait until they attain their new higher Age Pension Age of 66 years and 6 months to be old enough for an Age Pension.
Another increase in the Age Pension Age has already been legislated. Thus the Age Pension Age will be 67 years for Australians born after 1956.
These increases in the Age Pension Age mean that no one will reach their Age Pension Age during the second half of 2021 or 2023.
Can you retire before you reach your Age Pension Age?
Yes, you may retire from the active workforce anytime you like.
But the Australian taxpayer is not going to provide you with a regular income because you have chosen not to work.
Voluntary early retirees need to finance their living expenses from their superannuation or other assets.
For some couples, one partner might continue earning income from work whilst the other ‘retires early’ to look after grandchildren and frail seniors.
Can you keep on working after you reach Age Pension Age?
Yes, continued involvement in the workforce can provide social connections and better mental health as well as financial benefits.
The Age Pension Work Bonus is an encouragement to keep on working.
The Age Pension Work Bonus allows an Age Pensioner to have $300 per fortnight of ‘work earnings’ excluded from the Age Pension Income Test.
You may hoard a maximum of $7,800, which is twenty six fortnights of Work Bonus to use later. If you earn at least $300 each fortnight from real work then you would be treated as using up your Work Bonus as it accrues each fortnight. But if you work intensely for a short period then take a rest, you could use any hoarded Work Bonus to cover part of your next lot of work earnings.
Remember Work Bonus can only be offset against earnings from real work involving personal exertion. Wages for working as an employee count for the Work Bonus.
You are allowed to use the Work Bonus to offset your earnings from self-employment or working in a family business provided that you actively ‘worked’ not just managed your own investments.
Centrelink need evidence that you earned your work income from applying ‘personal exertion’. Your ‘work’ could be operating your own business for example mowing lawns, cleaning houses or teaching instrumental music.
When your partner has not yet attained Age Pension Age
If you are blessed with a partner who is younger than Age Pension Age, then your partner would not be considered ‘too old’ to earn enough for a modest lifestyle. Thus no Age Pension for a young partner of an Age Pensioner.
All of the work earnings of a younger partner are counted as ‘income’ of the couple in the Age Pension Income Test for the older partner. The Work Bonus does not apply to the earnings of a partner who is still under Age Pension Age.
Remember, that Centrelink would treat you a member of a couple if you and your partner share living arrangements and present socially as a couple. You cannot be treated as a single person for the Age Pension just because you and your partner choose to keep your finances separate.
When you are not capable of earning enough
Other Centrelink benefits could be available when you are not capable of working enough hours to earn sufficient income to support a modest lifestyle before Age Pension Age.
We acknowledge that adults of any age might not be able to work full time or at all. Therefore the Disability Support Pension is available to citizens who are substantially incapacitated for work by reason of physical, intellectual or mental limitations.
Centrelink have a very detailed ‘points’ system for assessing if citizens are incapacitated such that they could not work fifteen hours per week at full Award Wage rates.
The Disability Support Pension is paid at the same rates and subject to the same Income and Assets Tests as the Age Pension.
Where the partner of a Disability Support Pensioner has qualified for an Age Pension then both members of the couple would be paid the same amount of Pension.
But if the partner of the potential Disability Support Pensioner were still in the workforce then his income might be enough to exclude the incapacitated partner from actually receiving any Disability Support Pension.
Sadly some adults are so frail that they could not be left at home alone while their partner worked fulltime. In these households, the frail adult might qualify for the Disability Support Pension and their partner might be eligible for the Carer Pension.
The Carer Pension is also paid at the same rates and subject to the same Income and Assets Tests as the Age Pension.
What is the Blind Pension?
Citizens who are ‘legally blind’ qualify for the Age Pension – Blind or Disability Support Pension – Blind.
If you are so severely vision impaired as to qualify as ‘legally blind’ then Centrelink pay your Age or Disability Support Pension at the full rate without your Pension being subject to the Income or Assets Tests.
Ask Christine at Financial Care Services to guide you to claim a Blind Pension; she know where to find the Centrelink form.
The partner of a Blind Pensioner is not exempt from the Income and Assets Tests on their Age Pension. Hence it is not unusual for the partner of an Age Pensioner – Blind to be excluded from any Age Pension by the Asset and Income Tests.
Christine at Financial Care Services your independent adviser
Financial Care Services is an independent advisory service specialising in retirees of modest means and aged care entrants.
Our core values include working with clients in claiming DVA and Centrelink entitlements.
The team at Financial Care Services are 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 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.
______________________________
Christine Hopper
Financial Care Services Pty Ltd
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 172 Warrigal Road, Camberwell Victoria 3124
Website – visit financialcareservices.com.au
LinkedIn – connect https://www.linkedin.com/in/christinehopper1
LinkedIn Company – follow https://www.linkedin.com/company/financial-care-services/
Past newsletters – see http://financialcareservices.com.au/newsletters/
Newsletter – subscribe http://eepurl.com/js41T
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.
© 2021 Financial Care Services Pty Ltd. All rights reserved