Q: I am a self-funded retiree who receives a part Age Pension. Given the fall my Allocated Pension has fallen, what steps should I now be considering to optimise my Age Pension benefits?
A: Retirees who have previously been excluded from receiving the Age Pension due to the assets test, may now qualify if their assessed assets are now below the maximum assets test threshold. Under the Assets test, if you are Age Pension age, generally all of your assets are counted at current market value, including Superannuation. Your family home that you reside in, as well as certain other assets, are exempt under this test. For a couple who own a home, the assets test threshold to receive part pension is $869,500 or $578,250 if a single homeowner. For a non-homeowner couple, the threshold to receive part pension is $1,080,000 or $788,750 for a single non-homeowner.
For retirees on Age Pension benefits who currently receive a part pension due to the assets test, seek an immediate reassessment by Centrelink of your assets to reflect their current market values. Given the likely recent fall in retirement savings, every $1,000 of reduction in assets value should increase Age Pension benefits by $3 per fortnight provided they are currently in receipt of a part pension.
The deeming rates used to assess the incomes test for those on Centrelink benefits have been temporarily reduced by an additional 0.25%. From 1 May, the lower deeming rate on assets up to $51,800 for singles or $86,200 for couples will be 0.25 per cent and the upper deeming rate will be 2.25 per cent. This will mean that those who have previously been impacted by the Income test may see their Age Pension benefits increase. If you are already in receipt of benefits, you do not need to apply, the changes will automatically take effect. If you previously did not qualify for the Age Pension due to the Income test, you may now qualify.
The government is providing two separate $750 payments to social security benefit recipients. The first payment announced on 12 March 2020 was paid into recipients accounts around the 13 April 2020. The second payment will be available to people who are eligible payment recipients on 10 July 2020. The payment will be made around 13 July 2020.