The idea of the government funding our retirement may sound appealing, however, the reality isn’t quite so simple. Age Pension is designed as a safety net only. In other words, it may put food on the table but don’t expect it to be your only source of income during retirement.
Age Pension isn’t simply handed out without question. From 1 July 2022, you will need to be at least age 66.5 or older if you weren’t yet aged 66 by 30 June 2022, and satisfy both the income test and an assets test.
As a guide, a single senior who earns less than $190 per fortnight may be eligible to receive the full rate of Age Pension. For a couple, their combined income must be below $336 per fortnight.1
Even if you meet the income test, you’ll still need to pass the assets test. A single homeowner who has assets (other than their home) valued at less than $280,000 may be eligible to receive the full rate of Age Pension. For couples, their combined assets (other than their home for homeowners) must be less $419,000.2
If you cannot receive the full rate of Age Pension due to your income and/or assets, you still could be eligible for a part pension.
A single resident homeowner with an income of less than $2,165.20 per fortnight and assets (other than their home) of less than $609,250 may be eligible for a part pension.
A homeowner couple may be eligible for part pension if their income is less than $3,313.60 per fortnight and their assets (other than their home) are less than $915,500.
Your rate of Age Pension will be the lower of the outcome under the income or assets test.
It is important to note that the benefit is not limited to the extra cash you receive. If you receive any rate of Age Pension, you will be eligible for a Pensioner Concession Card. This lets you tap into valuable discounts including reduced cost medicines under the Pharmaceutical Benefits Scheme (PBS)3, potential savings on power bills, council rates and more.
Even if your income or asset levels mean you’re not eligible for a Pensioner Concession Card, you could still apply for a Seniors Card.
Each state and territory has a Seniors Card scheme and some reciprocal arrangements are in place for using your card in other states. The Seniors Card is free, and it provides a variety of concessions on transport, fares and discounts with participating businesses.
To be eligible you need to be aged 60 or over and not working more than a set number of hours per week in paid employment, although eligibility criteria and benefits vary slightly between states and territories.
The Commonwealth Seniors Health Card is issued by the Department of Human Services and you need to have reached age pension age to apply. There is no assets test, but you must satisfy a set of criteria including your annual income must be below $57,761 if you’re single, or $92,416 for couples combined.4
The Commonwealth Seniors Health Card provides discounts on PBS prescription medicines, with other potential savings such as bulk billed doctor appointments (at the discretion of your doctor), cheaper out of hospital medical expenses through the Medicare Safety Net and concessional rail travel on some services.5
Things you should know
This article has been written by BT and the information in this publication is current as at 01 July 2022.
This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses, any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. Any tax considerations outlined in this publication are general statements, based on an interpretation of the current tax law, and do not constitute tax advice. The tax implications of super investments can impact individual situations differently and you should seek specific tax advice from a registered tax agent or registered tax (financial) adviser. Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website.