For many clients, retirement and dealing with Centrelink for the first time can be a daunting experience, especially not knowing the system.
Centrelink will assess your entitlement to the Age Pension, by assessing both your assets and income, using various formulas and calculations – and each asset can be treated differently.
Superannuation funds (not in pension phase), can even be treated differently for each member of a couple, having vastly different consequences. For example, Superannuation is counted by Centrelink for those that have reached Age Pension Age (currently 65 for men, and 64 for women), but not for those that are yet to reach this age.
As a recent client example, we assisted a couple whose ages differed – therefore, only one had met the age Pension age. The simple strategy of reducing the amount that the elder client had in Superannuation, and contributing this to the younger spouse’s superannuation, improved the client’s age pension entitlements as fewer assets were counted.
A sound retirement plan will take all these aspects into account, and assist you to structure your assets in the most effective manner, which can include maximizing your Centrelink entitlements.