Financial Care Services Newsletter
by Christine Hopper
Volume 14 Edition 4 – 30 April 2024
Christine at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles
Disability Support Pension
Centrelink pay the Disability Support Pension to Australian residents whose disabilities severely restrict their earning capacity.
Eligibility for Disability Support Pension- age and Australian residency
The Disability Support Pension is available to Australian residents who have attained age 16 years but not their Age Pension Age.
A Disability Support Pensioner normally transfers to the Age Pension on attainment of their Age Pension Age.
In April 2024, new Age Pensioners are seniors aged 67 years.
Australian Social Security Pensions, also called “Income Support benefits” are only available to Australian citizens and Permanent Residents, who have lived in Australia for ten full years as citizens or Permanent Residents.
Your ten-year qualifying period could consist of a few shorter periods.
But you must have a continuous period of five full years without any breaks, no exits from Australia during those five years.
Any periods of time you lived in Australia before receiving Permanent Residency cannot count towards your ten or five, years for Social Security benefits.
Eligibility for Disability Support Pension-incapacitated for work
Impairment requirement for the Disability Support Pension-Blind
To qualify for the Disability Support Pension-Blind, you must have no vision, or such very low vision that Centrelink are satisfied, that you are permanently ‘blind’.
The basic Centrelink criteria to qualify as ‘blind’ for the Disability Support Pension-Blind are listed in the Centrelink form SA013.
The form SA013 allows for the ophthalmologist to certify that the applicant has vision loss equivalent to the Centrelink basic criteria other than as one of the set descriptions.
Centrelink require your eye specialist ophthalmologist to complete the Centrelink form Request for ophthalmologist/optometrist report form (SA013) as evidence of your loss of vision.
Impairment requirement for the Disability Support Pension
To qualify for the Disability Support Pension, you would have one or more physical, intellectual or psychiatric impairments, such that you are unable to work or be retrained to work, within the next two years, for at least 15 hours per week for at least the relevant minimum wage.
You could be receiving the Disability Support Pension and participating in the Supported Wage System.
Applicants for the Disability Support Pension must submit medical evidence about their disability, injury or illness.
Centrelink ask for special medical assessment reports to generate ‘impairment points’ regarding your capacity for work as part of your assessment for Disability Support Pension.
A minimum of twenty ‘impairment points’ is required to qualify for the Disability Support Pension.
You can read about the Centrelink ‘impairment points’ system.
Centrelink could also ask for a Job Capacity Assessment as a way of finding out
- Whether you can work
- How much work you can do; and
- How much help you need to find and keep a job.
Centrelink could ask for a review of your medical conditions with respect to your incapacity for work at any time after you start receiving the Disability Support Pension.
Disability Support Pension Payment Rates
The Disability Support Pension is payable at the same rates and subject to the same financial means testing as the Age Pension.
But the full rate of Disability Support Pension is paid to people who are blind.
There are no financial means tests for the Disability Support Pension-Blind.
Disability Support Pension financial means tests if you are not ‘blind’ at Centrelink
The Disability Support Pension Asset test includes all of your assets except superannuation fund balances in accumulation phase until you attain your Age Pension Age.
The Disability Support Pension Income Test includes the deemed financial income on your financial assets (excluding your superannuation fund balances in accumulation phase) and any other income.
Thus any regular payments that you receive from your employer for sick leave or accrued annual leave or Long Service leave would be counted in your ‘income’ for the Pensioner Income Test.
Special rules cover compensation payments and insurance payouts.
You must tell Centrelink about any sick leave from your employer, disability, sickness or ‘income protection’ insurance benefits and any lump sum ‘trauma insurance’ payments.
Means testing for a Disability Support Pensioner who has a partner.
Where one member of ‘a couple at Centrelink’ is eligible for the Disability Support Pension, the couple’s means testing is applied.
This means that both you and your partner, must provide Centrelink with details of your assets and all of your earnings from work and any other income.
The couples Income Test only allows for one dollar of Disability Support Pension to be paid to the eligible partner if the combined annual income of the couple living together, is $89,000 or less, in April 2024.
Higher cut-off levels apply where the Disability Support Pensioner lives in a care facility, aged care home or supported residence.
Thus, you might not receive any Disability Support Pension or be eligible for the Pensioner Concession Card, if your partner is in well paid employment or you have substantial assets.
Compensation Payments and the Disability Support Pension
You can apply to Centrelink for the Disability Support Pension as soon as your doctor decides that you are not going to be able to return to work within two years.
Your doctor needs to write a report about your illness, injury and incapacity for you to give to Centrelink.
Centrelink could start your Disability Support Pension as soon as your claim is processed.
If you satisfy the incapacity conditions for the Disability Support Pension and receive a compensation payout then Centrelink could suspend or reduce, your Disability Support Pension payment amount or ask to be repaid some, or all, of your Disability Support Pension payments.
You must tell Centrelink about any worker’s compensation or transport accident insurance claims and any other ‘insurance payouts’ or any other payments relating to your injury or illness.
How much Disability Support Pension could I get?
If you think that you, or your partner, satisfy the Disability Support Pension incapacity for work conditions then you could arrange a ‘personal financial factual information consultation with Christine at Financial Care Services to discuss your potential Disability Support Pension.
New maximum Disability Support Pension payment rates
After the March 2024 indexation is applied, a single pensioner could receive a maximum fortnightly payment of $1,116.30.
This payment includes $1,020.60 of basic pension and $95.70 of Supplements.
Each member of a pensioner couple living together could receive a maximum fortnightly payment of $841.40.
This payment includes $769.30 of basic pension and $72.10 of Supplements.
But your payment is reduced by the Disability Support Pension Means Tests
The actual amount that an individual pensioner is paid is subject to the pension Means Tests.
Centrelink work out the reduction that could be applied to you under the Assets Test and separately under the Income Test.
Then Centrelink apply whichever Test generates the lowest pension payment to you.
Means Test cut offs for Single Disability Support Pensioners
A Single Pensioner could keep her Pensioner Concession Card and receive the Pension Supplements plus one dollar per fortnight of Disability Support Pension, if her assessable Income is not more than $2,243.20 per fortnight, $58,000 per year in April 2024.
Remember, your assessable income includes your deemed financial income, and any ‘disability income’ benefits from your employer or personal insurance.
But she must also satisfy the Assets Test to remain as a Pensioner.
A Single pensioner may have not more than $883,616 of Assets or a ‘home’ plus $641,616 of other Assets, and still be eligible for one dollar per fortnight of Disability Support Pension in April 2024.
Means Test cut offs for Partnered Pensioners
The Means Tests for ‘couples’ count all of the Income and all of the Assets that the couple have.
Centrelink use the ‘total’ amounts for the couple; mine, yours, ours are all included without distinction.
Remember that at Centrelink and DVA, a couple is any two adults who share domestic arrangements and present socially as ‘a couple’.
You cannot be treated as a ‘single’ at Centrelink just because you and your domestic partner keep your finances separate.
Once one member of a couple moves into residential care, they are treated as a ‘couple separated by illness’ at Centrelink.
A Disability Support Pension who is a member of a ‘couple separated by illness’ could claim the Single rate of Pension.
Centrelink would apply the ‘couples’ means testing to potentially reduce the Disability Support Pensioner’s payments.
Your partner’s income and assets cannot be ignored because your partner does not satisfy the residency, age and/or disability conditions for a Centrelink Pension.
Means Test cut offs for Pensioner couples living together
After the Pension increase on 20 March 2024, a Pensioner couple living together could have a joint Income of $3,433 per fortnight, and still be Pensioners.
An income over $89,300 per annum, has them cut-off by the Income Test from entitlement to that last one dollar per fortnight each of Pension in April 2024.
They would lose the Pension Supplement and the Pensioner Concession Card when their income exceeds $3,433 per fortnight.
But they must also satisfy the relevant Asset Test.
Remember Centrelink check your position against the Asset Test and the Income Test then apply whichever Test would generate the lower Pension payment or exclude you from the Pension.
A homeowner couple living together could have $963,700 of assets in addition to their home before the Asset Test excluded them from that last one dollar per fortnight each of Pension and the Pension Supplement.
A non-homeowner couple living together could have $1,205,700 of assets and get that last one dollar per fortnight each of Pension and the Pension Supplement provided that the Income Test had not excluded them from any Pension.
Pensions for couples separated by illness
When at least one member of a couple lives in residential aged care, they become a ‘couple separated by illness’ for Centrelink purposes.
The maximum fortnightly Pension payable to a member of a couple separated by illness increased to $1,116.30 from 20 March 2024.
This payment includes $1,020.60 of basic pension and $95.70 of Supplements.
The Pension payable to a member of a couple separated by illness is subject to reduction according to the means tests for couples.
After the Pension increase on 20 March 2024, a Pensioner couple separated by illness could have a joint Income of $4,438 per fortnight, $115,000 per year, before the Disability Support Pension payment reduces to just one dollar per fortnight.
But they must also satisfy the relevant Asset Test.
Remember Centrelink check your position against the Asset Test and the Income Test then apply whichever Test would generate the lower Pension payment or exclude you from the Pension.
A homeowner couple separated by illness could have $1,131,000 of assets in addition to their home before the Asset Test excluded them from that last one dollar per fortnight each of Age Pension and the Pension Supplement.
A non-homeowner couple separated by illness could have $1,373,000 of assets and get that last one dollar per fortnight each of Disability Support Pension, or Age Pension, and the Pension Supplement provided that the Income Test had not excluded them from any Pension.
Help to understand how your situation fits in the Centrelink Pension system
The calculation of your Disability Support Pension amount, if any, can be challenging.
The easy route is to ask for the Financial Care Services Age Pension Illustration Personal Data form as a checklist of essential data and then arrange for a ‘Pension Illustration Short Consultation’ with Christine Hopper of Financial Care Services.
Christine at Financial Care Services writes these Newsletters.
She can help you to understand your Disability Support Pension situation.
Christine Hopper of Financial Care Services offers Short Consultations for ‘personal factual financial information’ in the form of an Illustration of the amount of Centrelink Disability Support Pension or Age Pension, you could receive today provided that you satisfied the impairment, or age, and residency conditions for a Centrelink Pension.
Contact Christine at Financial Care Services to obtain the Age Pension Illustration Personal Data form.
You will also receive our Client Services Guide that provides essential information about Christine Hopper of Financial Care Services.
Alternatively you could search through the Centrelink website for clues about Pension rates and means tests then do the sums yourself.
Contact Christine to help you navigate your Disability Support Pension challenge.
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
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/
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.
© 2024 Christine Hopper @ Financial Care Services. All rights reserved.