Vol 10 Ed 10 - Financial Care Services

Volume 10 Edition 10 – 31 October 2020

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

When your Age Pension payment is impacted by earnings from work

Seniors are encouraged to keep active in body and mind. But if you keep active by working for a financial reward then Centrelink could reduce your Pension payments.

Many seniors choose to work whilst claiming an Age Pension.
The Age Pension Work Bonus allows each Age Pensioner to have $300 per fortnight of their own genuine work earnings excluded from the Age Pension Income Test.
The Work Bonus does not apply to the work income of your partner if your partner is not also an Age Pensioner.

Centrelink want to ensure that no Pensioner is overpaid because their work income records are incomplete. Therefore, as from December 2020, your Age Pension payment could be delayed until you and your partner, have reported your work income for the preceding fortnight.

The Centrelink changes bring new ways to report work income and a very detailed work income information requirements.

The good news is that Centrelink would not cancel your Age Pension if your work income excluded you from any Age Pension payment for no more than five consecutive fortnights. That is, you get a NIL amount of Age Pension actually paid for each of those five fortnights and then restart your Pension payments.

All would be well if your work and other income drops so that you are eligible for an actual payment of Age Pension in the sixth fortnight.

But if you continue to fail the Income Test for six consecutive fortnights then your Age Pension would be cancelled.
That means that you would lose your Pensioner Concession Card.

When you next you satisfy the Income and Assets Tests for an Age Pension you could reapply for the Age Pension.
An Age Pension application could take many months to process and restart your Pension payments. Thus you could be without a Pensioner Concession Card for some months.

Please keep reading if you and/or your partner receive an Age Pension and either or both of you, work for wages.

You may relax if you earn work income from your own business.
Centrelink have not yet revised the process for Age Pensioners to report ‘business income’.

When to lodge the new work income reports

The new Centrelink work income reporting rules specify a cut-off time and date for each of your fortnightly work income reports to be lodged.
The fortnightly cycle of reporting dates will be varied around any public holiday closures of Centrelink offices.

If you miss the cut-off time for this fortnight’s work income report then your Age Pension payment will be delayed. You would not be paid until your belated work income report has been lodged and then processed by Centrelink.

If you have no work income to report this fortnight then you must lodge a ‘NIL’ work income report in order to have your Age Pension payment processed.

How to lodge the new work income reports

You must lodge your work income reports electronically via a MyGov account or the Express Plus Centrelink mobile app.

The new Centrelink work income reporting rules do not have paper forms or telephone reporting for Age Pensioner’s work income reports.

Who needs to lodge the new work income reports

Centrelink clearly state that the new work income reports are required from Carer and Age Pensioners and their partners. Less clear is the reporting process for Disability Support Pensioners and their partners.

What information must be included in the new income reports

Centrelink require a very detailed breakdown of your hours actually worked, any leave entitlements that you used and all of the gross hourly rates of pay and loadings, for each hour of actual work or leave utilised.

Your prescribed ‘reporting periods’ are unlikely to match your pay cycle. Hence you will need to keep your own records of hours and pay rates in order to have the details ready to report before your Centrelink lodgement cut-off time.

Why a new style of work income reports.

Centrelink appear to be trying to minimise the risk of Pension overpayments. If Pensions are only paid after Centrelink have collected accurate work income data from the Pensioners and their partners then there would be fewer overpayments.

Complying with the new Centrelink work income reporting system could be challenging initially. Hopefully workers will learn the system without excessive stress or distress.

Over the longer term, submitting the detailed work income report before you are paid any Pension could be less stressful than resolving a Pension overpayment issue.

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 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.

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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
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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.