Even 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.
In addition to income and asset thresholds, there are some age and residency requirements you need to meet to qualify for the Age Pension.
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
|| 65 years and 6 months
| 1 January 1954 to 30 June 1955
|| 66 years
| 1 July 1955 to 31 December 1956
|| 66 years and 6 months
| From 1 January 1957
|| 67 years
See a full list of Age Pension qualifying ages.
To qualify for the Age Pension, you must:
Receiving the Age Pension
Centrelink will apply an income test and assets test to work out how much of the Age Pension you’re entitled to. The amount you receive is based on the test that entitles you to the lowest Age Pension amount.
Centrelink looks at different types of income—known as assessable income—when figuring out how much Age Pension to pay you. The income you receive from your Flexi Pension and/or Indexed Pension is one of the income sources they look at.
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 a ‘cut-off point’, you will no longer be entitled to the Age Pension.
How pension income is treated under the income test
All of our pension products are treated differently under Centrelink’s income test.
From 1 January 2015, the income from account-based pensions such as UniSuper’s Flexi Pension is subject to the same deeming rules that apply to other financial investments, such as shares and cash. This only applies to Flexi Pensions commenced from 1 January 2015 and to Flexi Pensions where the account holder hasn’t been in continuous receipt of the Age Pension from 31 December 2014.
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.
The current deeming rate on the first $48,600 of financial investments (singles) or $80,600 (couples) is 1.75% per annum. The deeming rate above these amounts is 3.25% per annum.
Read more about the deeming rules for account-based pensions.
Deeming rules do not apply to members who commenced 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 the individual’s life expectancy (or, if there is 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 income, combined with part of your tax-free component.
Prior to 1 January 2016, the entire tax-free component of a member’s defined benefit pension income (known as the ‘deductible amount’) was exempt from the income test. Starting 1 January 2016, the amount exempted under the income test is capped at 10%.
Read more about the income test for defined benefit pensions.
Commercial Rate Indexed Pension
If you have a Commercial Rate Indexed Pension, part of your pension income is exempt from the income test. This exempt amount is known as the ‘deductible amount’ and it is calculated by dividing the purchase price of the pension by the individual’s life expectancy (or, if there is a reversionary beneficiary, the longer of the two life expectancies).
The assets test lets you have a certain level of assets to qualify for the maximum Age Pension amount or a 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.
Read more about the assets test.
Other government entitlements
Pensioner Concession Card
Not sure if you’re getting all the Centrelink benefits you’re entitled to? A UniSuper Advice financial adviser can help. Contact UniSuper Advice today.
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 will 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 able to get a Commonwealth Seniors Health Card (CSHC).
The CSHC helps with the cost of prescription medicines and other health services if you’re pension age but don’t qualify for the age pension.
If you have a pension with us and also receive the Age Pension, Centrelink uses information about your UniSuper 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. This means Centrelink will no longer have to write to you with information requests unless your circumstances change, for example, you open a new pension account.
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 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 straightaway.
We’ll have to exclude a handful of indexed pension members from the Centrelink Schedule mail-out if we don’t have all the information we need.
If you fall into this small group of members and receive an information request from Centrelink, just contact us and we’ll send a schedule to you.
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 super.
- If your total income plus concessional contributions within the concessional contributions cap is more than $300,000 a year, the release authority allows you to release funds from your super to pay the 15% tax (known as Division 293 tax) that applies to taxable concessional contributions above the $300,000 threshold.
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.