Centrelink Disability and Age Pension Increases September 2013
Centrelink Disability Pensions and Age Pensions increased effective 20 September 2013. The new maximum total payment for a Single Pensioner is $827.10 per fortnight, an increase of $18.70 per fortnight. Each member of a couple could get a maximum of $623.40 per fortnight, that is, $14 per fortnight more for each eligible person.
The maximum payment for a Single Pensioner includes the full rate of Pension of $751.70 per fortnight. Pension Supplements totaling $75.40 per fortnight are paid to Single Centrelink clients who receive at least one dollar of Pension per fortnight.
Each member of a couple at Centrelink, could get a maximum Pension of $566.60 per fortnight plus Pension Supplements of $56.80 per fortnight.
Rent assistance is available for Centrelink and DVA clients who live in rental accommodation because they do not own a home. The maximum rate of Rent Assistance is $124 per fortnight for a Single person.
Veterans with ‘qualifying service’ can claim the Service Pension from DVA. The Service Pension is paid at the same rates and subject to the same financial means testing as the Age Pension.
DVA War Widow Pensions also increased in September to $840.20 per fortnight including Supplements. This ‘compensation’ is not subject to any financial means testing. The means tested Income Support Supplement, ISS, is paid to War Widow and DVA Disability Pensioners who have limited financial resources. The maximum rate of ISS increased to $247.60 per fortnight including Supplements.
Personal Circumstances or ‘Who is a couple at Centrelink and DVA?’
People who share domestic arrangements are likely to have lower per person costs for some household services than individuals who live separately. Thus the Centrelink and DVA pensions are payable at lower per person rates for members of couples compared with single pensioners.
Remember that a ‘couple at Centrelink’ is any two adults who share domestic arrangements and present socially as a couple. Changes in ‘personal circumstances’ such as becoming a ‘couple at Centrelink’ take effect from the day that a partner moves in. The couple status can end on the day that one partner moves out.
When one member of a couple enters residential aged care, their personal circumstances change to being a ‘couple separated by illness’. Each member of a ‘couple separated by illness’ becomes entitled to the Single rate of Pension reduced in accordance with the couples means testing.
Means testing for Centrelink and DVA Pensions
The Centrelink Disability Support and Age Pensions and the DVA Service Pension and ISS are subject to both an Assets Test and an Income Test.
The value of your principal residence is excluded from your assessable Assets. But ‘home owners’ have lower Asset Allowances before the Asset Test bites. ‘Excess gifts’ are included in financial assets for means testing.
Assessable Income for the Income Tests is not the same as your cash income. Assessable ‘Income’ at Centrelink and DVA includes the deemed income from financial assets including ‘excess gifts’ rather than the actual interest received.
Impact of means testing on Centrelink Disability and Age Pensions for Single Pensioners
A Single homeowner could have an Income of $156 per fortnight and still be entitled to the full rate of Age Pension provided that other assets had a total value under $196,750. But if your Income exceeds $1,657 per fortnight, that is, $43,000 per year, you would not qualify for any Age Pension. Once you lose that last one dollar per fortnight of Age Pension, you also lose your Pension Supplements and any Rent Assistance.
Thus the cut off for any Disability Support or Age Pension is $1,657 per fortnight of Centrelink assessable Income.
The Asset Tests eliminate your entitlement to that last one dollar per fortnight of Disability Support or Age Pension at $697,000 for homeowners or $839,000 if you are classified as non-homeowner.
Impact of means testing on Centrelink Disability and Age Pensions for Couples living together
A homeowner couple could have an Income of $276 per fortnight and still be entitled to the full rate of Age Pension provided that their other assets had a total value of $279,000 or less. But the Income Test disqualifies both members of the couple from any Age Pension once the combined Income of the couple exceeds $2,538 per fortnight, that is, $66,000 per year.
The Asset Tests eliminate your entitlement to that last one dollar per fortnight of Age Pension for a couple at $1,033,000 for homeowners or $1,175,000 if you are classified as non-homeowners.
Impact of means testing on Centrelink Disability and Age Pensions for Couples separated by illness
Any homeowner couple could have an Income of $276 per fortnight and still be entitled to the full rate of Age Pension or Disability Support Pension provided that their other assets had a total value of $279,000 or less.
Where the members of the couple are separated by illness the Income Test disqualifies both members of the couple from any Age Pension or Disability Support Pension once the combined Income of the couple exceeds $3,278 per fortnight, that is, $85,000 per year.
The Asset Tests eliminate the entitlements of a couple separated by illness to that last one dollar per fortnight of Age Pension at $1,279,000 for homeowners or $1,422,000 if you are classified as non-homeowners.
Pensioner Concession Cards
Centrelink Disability and Age Pensioners and DVA Service Pensioners receive Pensioner Concession Cards. But if you lose your entitlement to any Centrelink Disability or Age Pension or DVA Service Pension then you must stop using your Pensioner Concession Card.
When your Centrelink Pension or DVA Service Pension is cancelled because your Income or Assets exceeded the cut-off amounts you could apply to Centrelink for a Commonwealth Seniors Health Care Card. This Card provides the same Commonwealth pharmacy benefits as the Pensioner Concession Card.
Read more about the other benefits of the Commonwealth Seniors Health Care Card at http://www.financialcareservices.com.au/christine-hopper-insights/self-funded-retirees-still-want-pensioner-concession-cards/
DVA Income Support Supplement and War Widow Pensions
Veterans and War Widows receive non-means tested pensions as compensation for the veteran’s loss of health or life. An additional Income Support Supplement is available to DVA Disability and War Widow Pensioners who might also qualify for some Age Pension. For the purposes of the ISS means testing the DVA War Widow Pension counts as Income for the Income Test.
Thus the cut off for any ISS for a War Widow is at $1,713 per fortnight. Thus a War Widow could have $447 of fortnightly Income in addition to her War Widow Pension before her ISS was reduced. But other Income of $873 per fortnight, that is, $22,700 per year, would exclude her from receiving any ISS.
Am I now eligible for a part Age Pension?
Financial Care Services offers Short Consultations to help you see if you could get some Age Pension and to estimate how much Pension you could expect to receive.
If you think that you might be eligible for a part Age Pension you can call Christine on
03 9808 0338 to arrange a Short Consultation, 45 minutes in person or by telephone and/or email to discuss your position. When you call please mention that you need a Short Consultation only.
If you would like further confidential, independent and professional advice about retirement planning, Centrelink, lifestyle or financial issues please contact Christine Hopper (03) 9808 0338.
These Insights are a general over view based on our understanding of the Centrelink and DVA Pension arrangements. Individual entitlements to Centrelink and DVA benefits are determined based on your actual situation as documented to Centrelink or DVA .
The information contained in this website is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations.
© 2013 Financial Care Services Pty Ltd. All rights reserved.
To make an appointment for professional advice, call Financial Care Services
(03) 9808 0338