If you receive income from a Flexi Pension or Indexed Pension, you may still be eligible to receive a part or full Government Age Pension or a concession card like the Commonwealth Seniors Health Card.
Qualifying for the Age Pension
Your eligibility for the Age Pension depends on your date of birth.
Currently, the qualifying age is 65.
From 1 July 2017, the Age Pension qualifying age will increase from 65 to 65 and 6 months. It will then rise by six months every two years, until it reaches 67 by 1 July 2023:
|Date of birth
| 1 July 1952 to 31 December 1953
| 1 January 1954 to 30 June 1955
| 1 July 1955 to 31 December 1956
| From 1 January 1957
Full list of Age Pension qualifying ages.
To qualify for the Age Pension, you must:
Receiving the Age Pension
Centrelink looks at different types of income—known as assessable income—when determining much Age Pension you may be entitled to. You can earn a certain amount of income each fortnight and still receive the full Age Pension.
For every dollar you earn above this limit, your Age Pension will be reduced.
Once your fortnightly income reaches what’s referred to as the ‘cut-off point’, you’ll no longer be entitled to the Age Pension.
The income you receive from your Flexi Pension and/or Indexed Pension is one of the income sources Centerlink considers.
How pension income is treated under the income test
Each of our pension products are treated differently under Centrelink’s income test.
If you started your Flexi Pension after 1 January 2015 or if you haven’t continuously received a Flexi Pension since 31 December 2014, the income from account-based pensions such as our Flexi Pension is subject to the same deeming rules that apply to other financial investments, such as shares and cash.
This means that the amount of income assessed under the income test is calculated by applying deeming rates to the balance of the account-based pension combined with other financial assets. Deeming rates can be described as artificial interest rates used by Centrelink to estimate an investment’s return. Visit Centrelink for more information.
Deeming rules don’t apply if you started a Flexi Pension before 1 January 2015 and were receiving a government income support payment like the Age Pension.
In these cases, part of the pension income—known as the ‘deductible amount’—is exempt from the income test.
The deductible amount is calculated by dividing the purchase price of the pension by your life expectancy (or, if you have a reversionary beneficiary, the longer of the two life expectancies).
Defined Benefit Indexed Pension
The amount of income assessed under the income test is based on the taxable component of your Defined Benefit Indexed Pension, combined with part of your tax-free component. The amount exempted under the income test is capped at 10%.
Commercial Rate Indexed Pension
If you have a Commercial Rate Indexed Pension (CRIP), part of your pension income is exempt from the income test.
This exempt amount is known as the ‘deductible amount’ and is calculated by dividing the purchase price of the pension by your life expectancy (or, if you have a CRIP, the longer of the two life expectancies).
The assets test defines the value of assets permissible in order to qualify for a full or part Age Pension.
The value of Flexi Pensions and Commercial Rate Indexed Pensions are counted as assets under the assets test (this only applies to Commercial Rate Indexed Pensions commenced from 20 September 2007).
Defined Benefit Indexed Pensions are 100% exempt from the assets test.
Other government entitlements
Pensioner Concession Card
Are you maximising your Centrelink entitlements? A UniSuper Advice financial adviser can help.
The Pensioner Concession Card provides access to a variety of discounts and concessions including a discount on Pharmaceutical Benefit Scheme (PBS) prescription medicines.
If you receive the Age Pension, you'll automatically receive a Pensioner Concession Card.
Commonwealth Seniors Health Card
Even if you don't qualify for the Age Pension but have reached pension age, you may still be eligible for a Commonwealth Seniors Health Card (CSHC).
The CSHC helps with the cost of prescription medicines and other health services.
Centrelink uses information about your pension to ensure you’re receiving the correct Age Pension amount.
We’ve streamlined our processes so we can send information about Flexi Pensions directly to Centrelink at least once a year (provided the personal details we hold match with Centrelink). This means Centrelink will no longer have to write to you with information requests unless your circumstances change, for example, if you open a new pension account.
If you have an indexed pension, it’s likely you’ll automatically receive a Centrelink Schedule from us at the start of each financial year. You’ll still receive requests from Centrelink—but you’ll be able to provide the details straight away.
If we don’t have all the information we need, you may not receive an automatic Centrelink Schedule.
If you need a copy of your Centrelink Schedule for any reason, please call us on 1800 331 685 or email email@example.com.
If you exceed the concessional contributions cap or incur 'Division 293' tax, the Australian Taxation Office may send you a release authority.
- If you exceed the concessional contributions cap during a financial year, the release authority gives you the option of releasing the excess concessional contributions from your pension.
- If you’re a very-high income earner and your income plus concessional contributions within the concessional contributions cap exceeds the legislated threshold for the year, the release authority allows you to release funds from your pension to pay the 15% tax (known as Division 293 tax).
Release authorities can only be applied to Flexi Pension accounts. You cannot release funds from a Defined Benefit Indexed Pension or Commercial Rate Indexed Pension.