Question

Ed (age 68) and Pam (age 61) are applying for the Age Pension. Given their assets listed below, what is their level of assets assessed by Centrelink?

Ed’s superannuation	$375,000
Ed’s 20 year term allocated pension (purchase price, no residual value, held for 4 years.)	$100,000
Pam’s superannuation (accumulation)	$75,000
Managed funds (in Ed’s name)	$28,500
Joint bank account	$13,000
Two cars	$25,000
Contents (firesale value)	$10,000
Principal residence	$550,000

Answer 1

The amount of age pension you receive is reduced by both the income and assets tests. Under the assets test, the value of your superannuation is combined with the value of your other assets, such as cars, house contents and investments, to arrive at a total value of assets. Once the upper threshold is exceeded, you are no longer eligible for the pension.

Home owners can have total assets of up to $626,000 if they are single and $928,000 if they are a couple. Non-home owners can have total assets of up to $755,000 if single and $1,057,000 as a couple.

The income test for age pensioners works in two ways. The first is when a super pension is not taken. In this case a deeming rate of income is applied to the value of the superannuation. Deeming rates are applied in two stages, depending on the value of the superannuation. The lower deeming rate is now 2 per cent and the higher rate is 3 per cent.

In the Give question Ed(68 year old) and Pam(61 year old) are deemed to be Non-home owners have their total assets of up to $1,057,000 as a couple. So it is eligible to take Pension if his total of assets is greater than $1,057,000 So they are not eligible.

Total Assets = $3,75,000+$1,00,000+$75,000+$28,500+$13,000+$25,000+$10,000+$5,50,000

= $1,176,500

So ED and PAm are not eligible to take Age pension due to their assets are greater than the limit.