How much can I have in the bank before it affects my pension?

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Wally David

I’m a proud husband and father and I advise people on money for a living. I've been doing this money thing for over a decade and have a keen passion for educating people on their options by simplifying information into everyday language and cutting to the chase.

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You’re most likely here after searching Google for answers on different questions about your Age Pension.

In this article, we learn how much you can have in the bank before your pension is reduced.  In addition, I have also answered dozens of questions from visitors in the comments section, regarding a range of scenarios and the impact on the pension.

How much can I have in the bank before it affects my pension?

Centrelink use an asset and income test when working out your rate of pension. For the purposes of the income test, the Government assumes that you will be earning a certain rate of return from the financial investments that you hold, regardless of the actual earning rate.

Deeming (assumed) RateSingle PensionerPensioner Couple
2.00%First $48,000First $79,600
3.50%$48,000+$79,600+
SOURCE: Department of Human Services, deeming rates effective from 1 July 2014

A single pensioner can have financial investments (e.g. bank account, shares) of $139,428 and still receive a full pension. This assumes the only source of income is from financial investments and that the total assets (eg. cars, personal belongings) are below the relevant threshold under the assets test ($202,000 for a homeowner).

How was this calculated?

$139,428 in financial investments:
$ 48,000 x 2.0% = $960
$ 91,428 x 3.5% = $3,200
Deemed income = $4,160

A pensioner couple can have financial investments of $245,086 and receive a full pension. Again, assuming the only source of income is from financial investments and total assets were below the maximum allowed under the assets test for a full pension ($286,500 for a homeowner).

As mentioned, the above figures assume your only source of income is from financial investments. If you have other sources of income, such as overseas pensions; these don’t fall under the deeming rules. This extra income will reduce the amount that you can have in the bank before it starts to affect your pension.

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Comments

  1. says

    If my mother who is a pensioner sells her house and ends ups with $280000 in her bank account will she still receive the pension? And if she will have to pay rent of $330 per week does she receive rental assistance?

    • Wally David says

      Thank you for your question, Stephanie.

      A single, non home owner pensioner who has no other assets apart from $280,000 in a bank account, would receive approximately $700 per fortnight in age pension.

      If that pensioner was also paying $330 per week in rent, they should be entitled to rent assistance of $124 per fortnight.

      Please see the following link for more details.

      Even though I have provided a rough estimate, your mother should speak to a financial adviser to investigate ways to maximise her pension plus look at any other objectives she may have.

  2. says

    Single pensioner mother sells her house invests 170k (house value) & borrows 110k if possible over 25year term to buy a small unit. Is she still entitled to her pension and if so how much please?

    • Wally David says

      Thank you for your question Heather.

      Assuming the house that is sold and the unit that is subsequently purchased are both the pensioner’s primary place of residence, then their Centrelink entitlement should not be affected. If the single pensioner’s only asset is their home, they should receive the full pension (assuming no income is received from other sources).

      However, I would suggest the pensioner think seriously before borrowing such an amount, if their only income is the pension.

  3. says

    Thank you Wally

    Final question please.

    How much income per week would my mother be able to have before it started to effect her pension?

    By this I mean if she put the 170k in the bank and then rented for $285.00 per week and she has no other income

    • Wally David says

      Hi Heather,

      A single pensioner can earn $4,056 per year in income before their pension is affected. A bank account containing $170,000 would be deemed to earn income of around $5,250. This would result in a small reduction in pension of approximately $23 per fortnight.

      If that pensioner did not own a home and was renting at $285 per week, they may also qualify for rent assistance of $124 per fortnight.

      Please note this should be treated as a guide only.

  4. says

    my father inlaw is about to inherit 350,000. left to him from his brothers death. He is married and own there house and car outright, how will this affect his/there pension, how much can they have in there bank accounts.

    • Wally David says

      Thank you for your question Bruce.

      It is a little tricky to answer without knowing all the facts. As a guide, a pensioner couple that own their home and have $350,000 in the bank would receive approximately $570 each per fortnight in age pension.

  5. says

    If I have $150.000 in investment which gives me $599 a month plus Italian pension of $475 a month.I get my full pension.I own my house.My husband died and I would like to move to South Africa.Can I sell my house to my son for half the price? I then won’t have a primary place of living in Australia.Will this affect my pension .

    • Wally David says

      Thank you for your question Margaret.

      I’m sorry to hear about the loss of your husband. There are a few issues to consider in what you’re proposing.

      1) Assets sold for less than their market value are likely to be considered a gift under Centrelink’s gifting rules.

      By selling your house for half its value, this may be assessed as a gift by Centrelink. As you are only allowed to gift $10,000 in one year, this may mean any excess will be treated as a deprived asset. In simple terms, that means the value of the home that Centrelink assess as a gift would be counted as an asset for a further five years from the date of disposal.

      2) Moving permanently overseas may impact your entitlement of a pension.

      You should give Centrelink International Services a call on 131 673 to make sure there isn’t anything else that may affect your payments.

      Centrelink considers how long you have been a permanent resident in Australia during your working life (ages 16-65) in making their assessment.

      Doing what you’re suggesting is likely to impact your Centrelink pension, though it’s impossible to quantify how much without knowing the exact details. Your primary residence is not currently assessed as an asset, though this could change under the scenario you’ve outlined.

      You really should seek some professional advice before proceeding with anything, as there may be other issues to consider such as tax and any stamp duty payable.

  6. says

    We are a married couple about to move into a retirement village, we have sold our house and after paying for the villa. legal fees and agents fees we should have about $100,000 left, will this affect our pension please. We will be paying $100 a week to the village.

    • Wally David says

      Thank you for your question Gai and Peter.

      Assuming you have no other investments or sources of income, the $100,000 in the bank should not affect your pension. In fact, a pensioner couple that owns their home can have up to $238,200 in the bank and still receive a full pension.

      However, be sure to notify Centrelink of the change to update your records and confirm your entitlement.

  7. says

    My 80 year old father-in-law wants us to purchase his house from him so that he can marry again without this affecting his son’s legacy should it not work out ( much younger woman etc..). A conveyer can transfer it into our name as long we have a market appraisal which we’ve had done. We only need to pay stamp duty. However, the next step is to see how this will affect his pension. If, through the Centrelink gift allowance thing it remains his asset how does that actually affect his finances?? He also has around $100,000 in the bank.

    • Wally David says

      Thank you for your question Rebecca.

      Your father-in-law needs to be careful as there are a few things to consider. The house as his primary residence is not counted as an asset for Centrelink purposes. If he was to sell or gift this home to you, the value or proceeds from the sale would then be counted as an asset in calculating how much pension he receives. Without knowing all the details, it is impossible to state by how much.

      The Centrelink gifting rules only allow a pensioner to gift $10,000 in one financial year (up to a max of $30,000 over five years) without affecting their pension. So if he hasn’t made any previous gifts, the amount that would be assessed against his pension would be; the value of the home minus this $10,000. For example, if the house was valued at $400,000, then $390,000 would be added to his assessable assets for Centrelink purposes. This would obviously result in a reduction in his pension. However, he would be assessed as a non-home owner, whom has a higher asset limit than a home-owner.

      Another issue to consider is that by gifting the home and receiving no funds from the transaction, he will have no interest or earnings on the money compared to if he sold the home – to offset the resulting decrease in his pension. This means he would have potentially less income than his current situation.

      Finally, another important issue to consider is that fact with a new partner; he would be assessed as a member of a couple by Centrelink. This means a lower fortnightly amount plus the fact any assets or income that she earns, will be counted against his pension. Particularly relevant, given you stated that she is much younger and possibly of working age.

      This is a clear situation where your father-in-law needs to get advice before acting, as it could potentially have major implications. I haven’t even touched on the estate planning side of things, which is another important area to consider.

  8. says

    Hi,
    If we own 4 homes, 2 of them outright and 2 mortgaged and they are all rented out whilst we travel in our caravan, are we eligible for the aged pension?

    Jane

    • Wally David says

      Thank you for your question Jane.

      It is impossible to say whether you would be eligible without knowing all the figures. This includes the property and mortgage values, along with any rental income.

      As a guide, an age pensioner couple can have their family home plus another $1,110,500 in assets, before they are ineligible for any pension.

  9. says

    Wally, I’m impressed by the simplicity of your advice- compared to the Centrelink site, it’s a breath of fresh air.
    My question is this. I’ve just turned 60 and have a small SMSF worth around $150k with around 50k in cash. I have fund managers who are about to hike their fees by 300% which is totally exploitative so I feel I have no choice other than to close the fund down.
    I own my own home, no mortgage and am currently in receipt of a widows allowance which is basically the same as Newstart.
    What will the implications be of me cashing out my super fund?
    Many thanks

    • Wally David says

      Thank you for your question and positive feedback on the site.

      There are a few things to consider with your situation.

      Firstly, with the hike in the fees to manage your fund – have you considered the option of changing the accountant or adviser for a more competitive fee structure? That way you could retain the existing setup and address your concerns around what you are paying to have it managed.

      Secondly, rather than ‘cashing out’ your super fund, you could explore the option of rolling over the funds into a retail or industry super fund. These may have cheaper management fees and importantly would retain the money within the super environment. Keeping the money in super means it doesn’t impact your Widows allowance entitlement.

      This brings me to my last point on the implications of withdrawing money from super. Where someone is under age pension age, which you are as you are only 60, funds that are held in super within accumulation mode are not assessed by Centrelink. Withdrawing the money from super and placing into a bank account, would mean that sum of money would be assessed and potentially impact how much Centrelink is received.

      A good starting point may be to get a second opinion on your current setup and what options are available to you.

  10. says

    I am a single 65yo male. I have 25,000 in a bank account. My ex has been fortunate lately and wants to gift me 35,000. From reading your most informative and easy to follow blog i realise that this will NOT affect MY pension.

    However, the question is, how will my ex’s financial and/or taxation position be affected by her ‘gifting’ me 35,000?

    Thank you in advance.

    • Wally David says

      Thank you for your question and positive feedback Arthur.

      There is no gift tax or duty in Australia, so there shouldn’t be any impact on her tax position. If she was on a Centrelink benefit, then there are rules around gifting (see How much can you gift? for more detail). However, you have stated that she is employed full-time. I couldn’t say whether there are any other financial implications without knowing her full situation.

      You should update Centrelink with your new bank account balance after receiving the money, even if there will be no change to your pension rate.

  11. says

    If my in-laws sold their home for$600 000, paid out an overdraft of $200 000, lent us $150000 to build a self contained granny flat attached to our house for them to live in leaving $250 000 to invest, would they lose their pension? They have no other assets/income. They would need to pay a small rent to cover utilities etc. Their names wouldn’t be on the title deeds of the property.

    • Wally David says

      Thank you for your question Roslyn.

      By contributed $150,000 to the construction of the granny flat, your in-laws should still be treated as home-owners according to Centrelink’s granny flat rules. They don’t need to be placed on the title, as they’re paying for a life interest or right to accommodation for life.

      According to your figures, after paying the overdraft they would have $250,000 remaining to be assessed against their pension. This should only reduce their fortnightly pension by approximately $10.

      However, you should treat the above as a starting point and guide only. You really should seek advice before commencing. Centrelink provide Financial Information Service (FIS) officers to assist with matters such as these and it’s a free, confidential service. Please see the following link for more detail.

      You should also have a formal agreement drawn up to cover all bases and ensure everything is documented. This will protect all stakeholders should there be any family disputes or changes in circumstances.

  12. says

    Hello, my mother inlaw has just sold her home, she has 280k in the bank, she is getting something like $500 per month in interest on her money until she finds another house to buy, she is still receiving her pension however how much of the interest she earns will centerlink take from her?

    • Wally David says

      Thank you for your question Peta.

      A single pensioner who doesn’t own a home and has no other assets apart from $280,000 in a bank account, should receive roughly $700 per fortnight in age pension.

      Make sure you mother-in-law updates Centrelink on her situation, so she receives the correct amount.

  13. says

    Hi Wally

    I am approaching age 65 and have an account based pension with $300,000 in the account. From a previous post, I understand that this $300,000 is not subject to deeming rules, but I assume the $1,500 per month pension I receive would be assessed as part of my income?
    I am also receiving a ComSuper pension of $60,000 per year. So will this ComSuper pension be assessed as income for the purpose of the age pension income test and added to the account based pension?
    Thanks for a very informative website.

    • Wally David says

      Thank you for your question and feedback, Peter.

      The ComSuper pension will be assessed against the income test of the Age Pension. The $1,500 per month from the Account Based Pension may only be partially assessed against the income test. The reason being is that these types of pensions contain a non-assessable amount. This often results in a much lower income assessment and a potentially higher Centrelink entitlement

      – Wally

  14. says

    Hi Wally,
    I have a question regarding super, If I am on the aged pension, and working partime, having super paid into a super a/c each fortnight, what would happen, interest wise if I put my 10,000 that I have in the bank, into that super fund ?

    • Wally David says

      Hi Marlo,

      If you are over Age Pension age, funds in superannuation are deemed in the same way as a bank account. In this case, there would be no difference in the way Centrelink assessed the two.

      The exception would be if you converted the superannuation into an income stream. Income streams have a different set of rules that may be more favorable, under the income test of the Age Pension.

      – Wally

  15. says

    Hi, my parents own a house worth appr $1.2, they are thinking of selling & buying 2 townhouses live in one & rent out the other. They would then have no mortgage but an income of appr $500 per week from rental, will they still be eligible as a couple to receive the aged pension when they are 65? Can my mum still work 2-3 days a week or not? Thank you in advance

    • Wally David says

      Hi Silvia,

      I don’t quite have enough information to provide a full response. However if your parents were left with a townhouse as their home, plus another $600,000 townhouse ($500 rental income) as their only investment – they should be eligible to a part Age Pension (assuming they have no other sources of income).

      Your mum can still work and be eligible to receive an Age Pension. However it will depend on how much she earns from employment. The Work Bonus does allows you to earn up to $250 per fortnight from employment without affecting your Age Pension. Centrelink will automatically allow for this in their assessment of your pension when you advise them of your work earnings.

      – Wally

  16. says

    Hi Wally, my wife is a Filipina and still would have to work another 15years before she will get a pension and probably only part because of the time she lived in Australia. We’re looking into going to live in the Philippines because the $ stretches a lot further. Because of my previous Nationality I receive a part pension from overseas and also from Australia.
    When we sell our house for roughly 350-400k and we buy land for about 175-200k which could be income generating (although minimal by aussie standards) and the other half in a Peso or $ account, how would my pension be affected? Thank you for your attention and advice.

    • Wally David says

      Hi Frank,

      Your question is a little tricky to answer without all the information.

      As stated above, a pensioner couple can own their home and have around $238,000 in the bank without affecting their pension. This assumes you have no other assets or income. However you mentioned that you receive an overseas pension, so this would alter that potential amount you can have in the bank.

      Also, Centrelink do have special rules for where your home is used for income producing purposes, so this may alter things slightly. Finally, you will need to be mindful of how leaving Australia may affect your payment.

      For assistance, you can phone 132 300 and ask to speak to a Financial Information Service officer at Centrelink.

      – Wally

  17. says

    My mum has recently gone into a nursing home so we have sold her home. She will have after fees and bond for the home approximately 115,000 in her bank. She currently recieves until 15 June 2014 approx $900 from her deceased husbands super. My question is will she lose ant if her pension ? She has no other assets or investments

    • Wally David says

      Thank you for your question, Dee.

      As mentioned, a single person can have financial investments of $135,857 and still receive a full pension. However the super pension may contribute extra income or assets to be assessed against her Age Pension. It is impossible to say whether it will affect her Centrelink entitlement, without knowing all the details of this super pension account.

      – Wally

      • Jennifer Willson says

        My mother is 94 and needs to go into a nursing home. She owns her own home $ 350,000 and has $70,000 in the bank.
        Will she have to pay a means tested care Fee, or an accommodation payment, to the nursing home.
        How much will the Department of Human Services allow you to have in assets before they start charging you above the 85% of your pension for Nursing home.
        Will she have to sell her home and if so how long does she have before she will have to sell it.
        Personally we do not think she will last another 6 months. we have to remove her from the hospital and she needs 24 hour care.
        We live in NSW

        • Wally David says

          Thank you for your question, Jennifer.

          It can certainly be a stressful time when a loved one needs to go into care. You are never ‘forced’ to sell your home by a nursing home. There are normally alternatives in how fees can be paid.

          To estimate your fees, you can use the calculator at the Government’s My Aged Care website.

          – Wally

  18. says

    Hello Wally
    Thank you for sharing your professional knowledge.

    I have three questions, please:
    1. When reading some of the examples above I think that my pension I receive from Centrelink is too low. Would you please do a quick calc. The facts are: I am over 65, my wife is much younger, not working. We have own home (value about $240K), $195K in the bank, I have super acc about $127K (just sitting there) and I also receive small pension from overseas (not much under $200 per fortnight). What should my pension be, roughly?
    2. I am thinking to buy a new car. If I withdraw $40K from my super to buy a brand new car, some accessories and insurance; how will it affect my pension? The car of course will decrease in value immediately after taken out of showroom. I do not have a car (and had no car since receiving pension) but Centrelink asked me a few times about. Why owing a car is important to them?
    3. Where to find good info about better placing the money now sitting in the bank and earning only about 2.5%. Also about the money sitting in the super account; is there a better way? Thank you in advance.

    • Wally David says

      Thank you for your questions, Mike.

      In reply:

      1) Assuming your superannuation is in accumulation mode you would have total of $322,000 ($195,000 + $127,000) to be deemed and applied to the income test of the pension. The overseas pension of $200 per fortnight would add another $5,200 in assessable income. The combined effect of these two factors would result in an Age Pension entitlement of approximately $545 per fortnight.

      2) Purchasing a car will reduce the amount of money that is deemed by Centrelink to $282,000. This should result in an increase to your pension to around $558 per fortnight.

      Centrelink are not concerned whether you do or don’t own a vehicle. They would just be asking as the majority of people do have a vehicle registered in their name, so they want to ensure their records are correct.

      3) Unfortunately I can only provide general advice on this website. To provide personal advice or recommendations I would need to understand your full situation and analyse the different options available. If you would like to discuss this in more detail, please get in touch via the Contact Us page.

  19. says

    My brother is 66 years old his wife hss left him . He was a self funded retiree but has been left with a modest house and $50,000.00 in the bank. He has no income.Is he entitled to a full pension. I am wanting to get as much info as possible to help him through this ordeal.

    • Wally David says

      Hi Lynette,

      A pensioner could have their home plus another $50,000 in the bank and still receive the full Age Pension. This assumes they have no other assets or forms of income.

      – Wally

  20. says

    How often to I have to notify my bank balance to Centrelink as it changes from day to day depending on when super pension payments go in and expenditure out. The initial balance, along with the value of a some shares was used to determine the level part pension payment.

    Regards

    • Wally David says

      Hi Gordon,

      Technically you should be updating Centrelink if your assessable assets increase or decrease in value by $2000. However with listed shares and units in managed investments, they only need to know where the number of actual units change.

      Generally you have 14 days to notify Centrelink of changes to your circumstances.

      – Wally

  21. says

    My daughter owns her own house, value approx $190K and has $40K in the bank. She also has one child aged 6 years for whom she receives $200 per week maintenance. Is she still entitled to any parenting benefit.

    • Wally David says

      Thank you for your question, June.

      It’s a little tricky to answer without all the information. Depending if she is working or not, she may qualify for a Parenting Payment. Centrelink do provide a useful online estimator that your daughter could use to estimate or compare payments. This should give her an idea what she may be entitled to, prior to applying. The online estimator can be found at the following link.

      – Wally

  22. says

    Hi my mother currently owns her own house and receives a full pension. She wants to sell her home probably for $380 000after selling costs removals new furniture and looking into prepaying funeral costs will probably leave $350 000 and the retirement unit will cost $125000 with ongoing weekly costs $345 per week. Will she still be able to receive a full pension with that amount in the bank and is there a way she can legally still receive the full pension.
    Thanks so much

    • Wally David says

      Thank you for your question, Heather.

      Based on what you have stated, your mother would have approximately $225,000 in the bank after paying for the retirement unit. A single pensioner with $225,000 in the bank with no other assets or income, would receive approximately $767 per fortnight in pension. The full rate of Age Pension for a single person currently stands at $827.10 per fortnight.

      Please refer to my How to increase your pension post for ideas on how you can legally boost your pension.

      – Wally

  23. says

    Hi – Love the forum. Great info and thank you for your help.
    Mum has been placed in a nursing home.
    She has a house approx worth $380,000.00. She has around $22,000.00 in the bank at the moment. So total net worth $402,000.00.
    If she sold the house and put the money in the bank would she lose her single old age pension? or how much does it reduce by?

    • Wally David says

      Hi Jen,

      Thank you for the positive feedback.

      A single pensioner with $400,000 in the bank should still receive approximately $650 per fortnight in Age Pension. This assumes they have no other assets or sources of income.

      However you should investigate whether selling the house is the best option for your mother. There are special rules to consider with aged care and the treatment of your former home. Retaining and renting the home can provide an exemption for social security purposes, if you meet certain conditions. This could potentially mean a higher rate of Age Pension.

      Though it does depend on the situation and it’s worth getting some advice before proceeding with anything.

      – Wally

  24. says

    Hi Wally

    I’ve read through your other questions and answers and they are very thoughtful but I thought I would ask one that relates to my father.

    He has just moved into a nearby in high-care nursing home on respite as a permanent arrangement. He has around $400,000 in the bank plus another $100,000 in super. He currently has an income of around $450 per month from super, $820ish a fortnight aged pension, plus of course the interest that is paid periodically on his bank savings.

    He realises he is quite ill and would like to give myself and sister a gift of $50,000 each to disperse amongst our own families as we like.

    Am I correct in thinking that if he gifts us this money, there will be no affect to his pension? My understanding is that it will continue to be included in his assets, but there will be no disadvantage to him, other than losing the interest on the $100k (which I understand in centrelink terms translates to $90k). Is this correct?

    Also, do we need to advise centrelink about this, or will the bank do so when the cheques are presented?

    Thank you for your time.
    Suzie

    • Wally David says

      Hi Suzie,

      Thank you for your feedback on the site.

      You seem to have a good understanding of things. You can only gift up to $10,000 each financial year or up to a maximum of $30,000 over 5 years. By gifting $100,000 in one financial year, $90,000 ($100,000 minus $10,000) is defined as a deprived asset. The deprived asset will continue to be assessed against his pension for a period of 5 years. The main difference as you rightly point out – he would lose the bank interest he would otherwise earn on the money.

      On your final point, you definitely need to advise Centrelink of any gifting and changes within 14 days.

      – Wally

  25. says

    I recently applied for an aged pension. I was shocked to be told the money I paid for my apartment (in a retirement village) is classified as an asset and is an entry fee, even though I pay the rates.

    I really found this very disturbing on three levels.

    I was not notified of this when I (co called) purchased the apartment from the village owners.
    The Victorian Government classes me as a home owner as I pay the rates.
    The Federal Government called the money I paid, an entry fee.

    I have now found out, if you Purchase a property in a retirement village and the purchase price in under $145000.00, it is classed as an asset.

    Could you please advise what amount of assets am I allowed as a non-home owner before it affects my pension.

    • Wally David says

      Hi Jennifer,

      Apologies for the delay in my response. Your question was incorrectly picked up by one of the spam filters on the site. According to the Department of Human Services website:

      Assessable assets include: the value of your entry contribution to a retirement village if it is less than the difference between the homeowners’ and non-homeowners’ assets limits.

      For a single pensioner, the difference between these two limits is $142,500. Therefore if you spent less than this amount, it appears it would be assessed as an asset.

      A non-homeowner can have total assets of $339,250 before their pension is affected. However the income test is the same for homeowners and non-homeowners. This means you could have financial investments (e.g. bank account, shares) of $135,857 and still receive a full pension. This assumes the only source of income is from financial investments and that the total assets are under the assets test ($339,250 for a non-homeowner).

      – Wally

  26. says

    Hello:) My mother has a house which is nearly paid off and only 25 K left outstanding in mortgage payments. she will receive her superannuation which is 40K. is she still in title for full pension? coz our accounter told us that she has to spend it all , otherwise she is not eligible .. and i don’t think its true… Thank you in advance for your answer

  27. says

    Hi wally, my parents are both in a nursing home and no longer own a home, it was sold and the money was paid in bond for the nursing home, they have some money left over, what is the maximum amount they are the allowed to have in investments without it affecting the pension

    • Wally David says

      Thank you for your question, Marisa.

      A pensioner couple can have financial investments of $238,200 and receive a full pension. This assumes their only source of income is from financial investments and total assets were below the maximum allowed under the assets test for a full pension ($421,500 for a non-homeowner).

      – Wally

  28. says

    Hi Wally, my husbands mother died 4 months before my husband died, I’m due to receive approx. $148.000.00 from my husbands estate, I have $14000.00 in the bank how will this affect my widows pension oh, I own my home

    • Wally David says

      Hi Maria,

      Based on your figures that would mean you would have a total of $162,000 in the bank. Assuming you have no other assets or sources of income, this would likely decrease your Widow Allowance by around $50 per fortnight. However there may be options available to reduce the impact on your entitlement.

      Please treat this as a guide only as there may be other information not provided. What you should do is update Centrelink once you receive the money from the estate. This will ensure you are paid the correct amount. You should also seek some professional advice to discuss a suitable investment option for the money.

      – Wally

  29. says

    Hi Wally,

    Just wondering if you could clarify a couple things for me. I have approx $300,000 in an Allocated Pension Fund from which I receive a monthly income stream. I also work 4 days per week and aggressively salary sacrifice each week (making sure I put in the max allowable). In a couple months I turn 65 and intend in drawing down some of my superannuation to pay out my mortgage. As my husband is 6 years younger than myself and earns $100,000 per year I’m assuming that I will need to continue to work part time until he is of pension age.
    I would like to continue to work part time (maybe reducing to 3 days per week) to rebuild my superannuation and also be financially independent for a long as possible.

    Thank you for your time
    Jill

    • Wally David says

      Hi Jill,

      As a couple you can have a maximum combined income of around $73,000 per annum, before you don’t qualify for any Age Pension. If your husband’s salary is $100,000, you would be ineligible for the Age Pension. One option could be to continue working part-time until your husband retires and then applying for the pension.

      In terms of your superannuation, once you reach age 65 you do have the ability to cash benefits at any time. Under the current law, there are no restrictions on accessing your funds and the proceeds can be withdrawn tax-free.

      – Wally

  30. says

    Hi,

    I’m a single parent pensioner with two children (4mo & 3yrs, $1192 p/f) via government benefits. I am living at home currently but am weighing up my options: Renting Vs Buying, but I am concerned when it comes to buying as I am not 100% on Centerlink’s schemes.

    My questions is about entitlement whilst buying my first home, which we would live in – to what extent would my entitlement be affected if I were to purchase, say.. a $320k home to reside in?

    I am considering purchasing investment properties after I have established savings, when my children are older – would this also affect my entitlement and to what extent?

    • Wally David says

      Thank you for your question, Leah.

      Your principal home is generally exempt from the asset test with Centrelink. In simple terms, this means the value of the home does not get counted when calculating your payment.

      The value of most other assets is assessable when calculating your income support payment. Generally, any debt secured against an asset is deducted from the value of that asset. For example, if you have an investment property worth $400,000 with a loan against the property of $300,000, then $100,000 would be assessable as an asset.

      – Wally

  31. says

    Hi David
    After reading your insightful comments I thought you might be able to help me

    I am a single mum with a child that’s 13 years old
    At the moment I rent and work part time. I receive rent assistance part a and b payments and also maintenance and have savings of between 150,000 to $200,000 in a trust account for my child
    I would like to still rent and use those savings to buy an investment property to help my child in layer years
    Can you please tell me if I would lose my centtelink a payments or whether I would lose part of them ?
    Thank you
    Jlee

    • Wally David says

      Thank you for your question, Lee.

      It’s great to hear that you’re thinking ahead for your child’s future.

      In response to your question, it is a little difficult to respond without knowing all the facts. I would need to know what specific payment you receive from Centrelink and what other assets you have. Owning an investment property does not necessarily mean you will lose your entitlement. It will depend on the value of the property, whether you have a loan against the property, and what rental income it generates.

      You should also consider if an investment property is the best option to save for your child’s future. There may be more suitable alternatives available given your situation. I would recommend you seek advice before proceeding, to ensure you make an informed decision.

      – Wally

  32. says

    hi
    my mother is thinking of selling her rental property which is worth $290k she will bank the money after the sale and she does get a part pension
    will having this money in the bank affect the pension she gets now?

    • Wally David says

      Hi Rosie,

      As it stands, the value of the rental property should be assessed against your mother’s pension. If she sells for a price greater than what Centrelink have recorded, then she could have her pension reduced. The funds in the bank will also be deemed by Centrelink. This may also alter her payment depending on her other assets and sources of income. Unfortunately I don’t have enough information to be any more specific.

      – Wally

  33. says

    Hi, My husband will retire in 2015 at age 65. I am age 60 and will still be working. Will he be eligible for the pension. Our assets do not exceed $120, however we do own an investment property which will we will still be paying off.

    Thanks

    • Wally David says

      Thank you for your question, Pamela.

      It’s a little tricky to answer without all the details. Your total income as a couple must be less than $73,247 per year for your husband to qualify for any Age Pension. This includes your wage and any other income you receive. If you have an investment property Centrelink will generally use the net asset value, meaning they will allow for any investment loan against the property.

      – Wally

  34. says

    Thanks for your site.
    Wife and I have an TTR pension of $250,000 and $100,000 in an ‘online bank’ and have a rental property worth about $450,000; which we still have to pay off $170000. We own our house.
    My question is: do the rules make it more beneficial for me to sell prior to my turning 65 in October this year, and putting our profits back into super, [and making a new TTR]
    Would this minimize CGT?
    We are a self employed partnership.
    There is a $60000 credit on my loan that I could withdraw and put into super to reduce the profit, if that is legal.
    Or shold we leave it till later; as i dont intend limiting my work until my wife turns 65 next May? How would the pension situation be with our scenario?
    Just looking for accurate information to enable decisions to be made.
    Thanks.Clem

    • Wally David says

      Thank you for your question, Clem.

      A self-employed person can make a personal contribution into super of up to $35,000 and claim a tax deduction for the 2013–14 financial year (if aged 59 years or over on 30 June 2013). This can assist in reducing tax otherwise payable, including CGT.

      Unfortunately I can’t be more specific as I don’t have enough information and can only provide general advice on this web site. I strongly suggest you seek some professional advice from a financial adviser or accountant before doing anything.

      – Wally

  35. says

    Hi Wally, My mum has recently been widowed after being a partner for 43 years. My mum does have about $64.000 in the bank and owns her own home.
    She receives a full pension.
    In her circumstances she would like to put her house in her childrens names there are 5 of us, she would like to do this so she is sure that the house will be ours when she passes away.
    I am assuming by previous comments that this would be seen as a gift? If so how would my mum’s pension be affected. Mum has no other income.
    Thank you in advance.

    • Wally David says

      Hi Lorraine,

      Currently your mum’s home should not be assessed against her Age Pension if this is her place of residence. If she transferred the home into her children’s names, you’re correct – this would likely be treated as a gift. This would mean the value of the home would be assessed against the pension for a period of 5 years. Depending on the value of the home, this may result in a decrease in her pension. You also need to considered any stamp duty and legal fees payable on the transfer.

      However you should investigate the granny flat provisions with Centrelink. This may allow her to transfer ownership of her home but retain a right to live there, with less potential impact on her pension. You can read more about this at the Department of Human Services website.

      I recommend getting some advice before doing anything.

      – Wally

  36. says

    Hi Wally,

    Thank you for your advice. I receive Family Benefit Part A & B, Newstart Allowance and Rent Assistance as previously mentioned, do you require me to give approximate figures to help you work this out.

    If I buy an investment property I will take out an interest only loan of approximately $430,000.00 with the rental return at the moment being approximately $370.00 per week. I own a car worth about $10,000 being the only large asset other than if I get an investment property.

    Do you have some time to give me a bit more information with regard to the above, and it is enough for you to help me further.

    Thanks and regards,
    Lee

    • Wally David says

      Hi Lee,

      I would have serious reservations about committing to such a large loan, in a situation where income support payments from Centrelink are your main source of income. You need to ask yourself what happens if the investment property is vacant for a few months? How will you afford the loan repayments? If you are making interest-only repayments, you are never actually repaying the principal loan amount. This means you are speculating that property prices will rise in the future to allow you to sell, pay back the loan and hopefully make a profit.

      Additionally, you also need to factor in any future interest rate rises and always allow for a buffer in any calculations for these types of scenarios.

      Regarding Centrelink’s assessment of an investment property, generally any debt secured against an investment asset is deducted from the value of that asset. For example, if you have an investment property worth $400,000 with a loan against the property of $300,000, then $100,000 would be assessable as an asset. Similarly, if the property generates rental income of $15,000 and has $12,000 of allowable deductions, only $3,000 would be assessed against the income test normally.

      I hope this has been of some assistance to you.

      – Wally

  37. says

    Hi.
    My dad sold his property and is putting $120,000 into a granny flat at my property for life tenancy. What is the maximum amount he can have in the bank before it affects his pension. He has no other assests now other than his super. Also can he gift me $25000 without if affecting his pension or assets. He will not be gifting anymore in the near future and hasn’t gifted any money in the last 5 yrs
    Thanks

    • Wally David says

      Thank you for your question, Leah.

      As stated above, a single pensioner can have financial investments (e.g. bank account) of $135,857 and still receive a full pension. This is assuming they have no other sources of income. The amount your dad could have without affecting this pension would also depend on the details of his superannuation.

      To gift $25,000 and not impact his pension entitlement, your dad would need to gift this amount over a 3 year period. This would need to be done in lots of $10,000 or less each financial year. For more details, please see my related post How much can you gift?

      – Wally

  38. says

    Hi Wally,
    My wife and I owe approximately $125k on our house. I am an age pensioner. Can I rent my property, use the rent money to pay my mortgage and still draw my age pension?
    Thank you
    Regards
    Rick

    • Wally David says

      Hi Rick,

      A pensioner can rent their home and still draw an Age Pension. However this would mean your home would likely become an investment property. This means the value of the house and any rental income would be assessable against your entitlement. Depending on the value of the home and rent received, your pension may be reduced.

      – Wally

      – Wally

  39. says

    Hi Wally
    I recieve an old age pension and earn around $100 a week, paid in cash.
    I gamble quite a bit and my bank account can have lots of deposits or widthdrawals. Is gambling classed as gifting as far asCentrelink is concerned.
    I am paying off a morgage and have not other inverstments. My bank ballance is on average 2000 to 3000 dollars. My partner also deposits amounts of money
    into my account each month to assist me with all the bills I have.
    Does these couple of situations I have described get me into trouble with Centrelink and would it affect my pension.

    • Wally David says

      Hi Garry,

      That’s a hard one to answer. If you’re gambling large sums of money at the same time as receiving government assistance, Centrelink may require you to prove you’re not concealing assets and income. Similarly if you have large fluctuations in your bank account, Centrelink may request the reason for these movements.

      If the $100 per week is earned from work, this should be reported to Centrelink. The Work Bonus is a scheme which allows you to earn up to $250 per fortnight from employment without affecting your Age Pension. This means the $200 per fortnight from employment may not even affect your Age Pension.

      – Wally

  40. says

    Hi Wally,

    I am receiving the single parenting payment for two children aged nearly 6 and 3, with the 3 year old I receive a carer allowance. I also receive family tax A and B, rent assistance and child support. I am not currently working due to needs of my younger child.

    Basically my marriage broke down a year ago and I went onto the single parenting payment when I was still living in the family home which i jointly own with my ex-husband. By advice by a social worker I moved into a rental property in November last year before selling the family home. It had to have some renovating to be completed before it cold be put on the market and I wanted to be settled before my oldest child started school this year. The house has just been sold now, but legal proceedings are still going to finalize the financial settlement. After I moved out last year and applied for rental assistance, that was when I found out even though I consider the old property my main residence it is not as I do not reside there anymore. I would think it couldn’t be considered an investment property as I am renting at my primary residence (don’t own more than one property) due to other house having to get ready to sell it. Having a share in the property at what it’s worth and the mortgage against it and not living in it has not affected any payments so far.

    So basically, I am wondering when I receive the funds from the sale of the property at settlement (prob june this year), will this affect me receiving the full parenting payment? I could potentially have just over 100K (although lawyer fees, etc will probably take it to just below the 100K mark) and I also have a motor vehicle and full house of furniture as assets to be included. (maybe15K in total as lawyers say 5k for furniture) I wasn’t sure if having that much money that is classed as an “assessable or liquid asset” from a sale of my “non residence home” would be considered different to as if I were still living in the family home until settlement time??

    Also another problem that someone raised yesterday, Capitol Gains Tax?? Is this applicable to me as the sale is again of my “non residence home”? By the time the funds are assessable it would be roughly seven months since moving into rental and changing my residence details with Centrelink. About two months ago I changed my drivers license and the electoral roll has just notified me in last week that they have my new address.

    Thanks

    • Wally David says

      Thank you for your question, Laura.

      It sounds like you have had quite a year, both financially and personally. There are a number of things that you need to consider in your situation. From a tax perspective, a person can choose to treat their former home as their main residence for up to six years after they cease living in it. This is providing that they haven’t purchased another home as their primary residence. You can read more about this at the Australian Taxation Office website.

      However, Centrelink is a different kettle of fish. You can use its online estimator to work out how your payments may be affected by the settlement. You can also phone 132 300 and ask to speak to a Financial Information Service Officer at Centrelink.

      It’s hard for me to comment too much further without knowing all the facts regarding your situation. I would strongly encourage you to seek some professional advice, given the complexity of your position. The adviser could discuss with you how to best use the proceeds of the settlement and the impact on your entitlements, as well as any other relevant issues. If you need help you can email me and I can put you in contact with an adviser in your area who will be able to help with an obligation-free first meeting.

      – Wally

  41. says

    Dear Wally,

    I was so relieved to find your site!

    My Mum is on Age pension and owns no home or significant assets.

    She receives $478 a month for a UK pension ($122) and ongoing UK super fund allowance from her divorced ex husband ($356).

    She has a lump sum worth $40k sitting in a UK account of a friend, that was originally the payout of the Super of her ex-husband.

    If she transfers this lump sum into her Australian account will it affect her pension amount, and will the amount be taxed? Would she be better off saying the amount was a gift?

    Also, if the above causes pension/tax problems, do you have any other suggestions?

    Kind regards and Thank you,
    Luke

    • Wally David says

      Hi Luke,

      Your question is a little tricky to answer. Centrelink normally do request the source of the money if there is a large increase in bank balance. You should just be honest and explain where the money really did come from. It’s better to have Centrelink pay the right amount each fortnight, rather than run the risk of overpayment and having to repay. If your mum doesn’t own a home or have any significant assets, then the effect on her Age Pension of an extra $40,000 shouldn’t be too great.

      In terms of tax, you would need to speak to an accountant for advice on this issue.

      – Wally

  42. says

    Hello Wally,

    Thanks for this forum. Like many have said, your information is clear and easy to understand (Centrelink’s often isn’t, unfortunately, either on their website or in speaking with Centrelink staff on the phone). I have gleaned bits of information – about similar situations – from other contributers but I’d be appreciative of your view.

    I have only one home (I live it) and I currently receive the full Aged Pension. I work casually but the work has yet to affect my pension because of the work bonus points.

    My home is in the country but I want to rent it out for a year or two to live in Melbourne – to be closer to my family (the reasons for, are probably not relevant). As I want to do the right thing by Centrelink, I have phoned for information and received inadequate information). The person I spoke to said that if I rented out my home, I would then be classed as a ‘non-homeowner’ and that the value of the house would be viewed as an assessible asset because I would no longer be living there. As I will be paying rates, water rates and repairs, how can I not be a ‘homeowner’?

    I fully understand that my pension will be affected but feel very confused about the situation. I don’t have any other major assessible assets, investments or super, etc.

    I had thought that I could just declare the rent I receive each fortnight when I do my reporting online and then expect my pension to decrease. It all seems more complicated than I thought.

    I have made a time to speak to a financial person at Centrelink but I’d be interested in your view.

    Thank you.

    Judi

    • Wally David says

      Hi Judi,

      Thank you for your feedback.

      Centrelink do not assess the value of your principal home against the Age Pension. However, if you move out of your home into another residence and rent out your home, it would no longer be deemed your primary residence. It would essentially be treated as an investment property with the value of the home assessed as an asset and any rental income against the income test of the pension. The person you spoke to was correct and you would be treated as a non-homeowner.

      As a non-homeowner, you do have access to a higher asset limit than as a homeowner. Also you may be entitled to rent assistance on top of your Age Pension. These two factors may assist offsetting any impact on your pension entitlement.

      Good idea to speak to the Financial Information Service (FIS) at Centrelink.

      – Wally

  43. says

    My husband has been receiving a part aged pension since September last year. When completing the application form we split our savings 50/50 even though they are in my name only. Did I do the right thing or can he receive more pension if I told Centrelink that the savings are in my name only?

    Many thanks.

    • Wally David says

      Hi Sue,

      You should simply state whose name the savings account is held. As a couple, Centrelink assess your combined assets so it shouldn’t alter your payment.

      If you phone Centrelink to update their records, there shouldn’t be any issues.

      – Wally

  44. says

    Hi Wally,
    Like others here, I would also like to add my thanks for your excellent, easy to follow advice.
    My husband has been working full-time and has just been made redundant. He turns 74 this year, so has been no burden to the country’s welfare system. He semi-retired a few years back (no centrelink), but I was in an accident and had to stop working. Hence, he returned to the workforce.
    Fast forward 10 years…I am still unable to work (but only 55yrs old), we used all our savings to move for him to find work & live in the meantime (medical bills etc etc). We have a house, mortgage still owing of $355k and pay $2500 a month. We are obviously putting it on the market immediately and will perhaps get $100,000 from the sale if lucky.
    We have additional debts of $100,000.
    In superannuation, my husband has approx. $70,000, which he can access now.
    From what we can work out (and it IS very confusing) he will be unable to apply for the age pension for the next 3 months (due to the 14 weeks redundancy pay).
    Should he withdraw his super and pay off our credit card debts now or will that affect the future pension?
    Any advice would be gratefully received.
    Thanks
    Suzie

    • Wally David says

      Hi Suzie,

      Thank you for your feedback on the site.

      Your husband should be able to apply for the Age Pension immediately. There are no waiting periods associated with the Age Pension.

      In terms of your superannuation, once you reach age 65 you do have the ability to make cash withdrawals at any time. Under the current law, there are no restrictions on accessing your funds and the proceeds can be withdrawn tax-free. By withdrawing super to pay off credit card debt, this would have the impact of reducing your assessable assets according to Centrelink.

      As I can only provide general advice within this forum, I would encourage you to seek some professional advice. If you need help you can email me and I can put you in contact with an adviser in your area who will be able to help with an obligation-free first meeting.

      – Wally

  45. says

    HI, Wally
    my mother and father are about to sell the house that they owe, they should walk away with $280,000.
    the plan is for them to let us use the $280,000 as a deposit on a large property that has a granny flat for them to live. in the event that they die I will redraw half and give to my brother.
    if they get to old to live with us then we will redraw the $280,000 for them to go into a retirement home.
    dad is on the pension and mum is 65 this year so she will retire .
    they will also pay rent of $200 per week for water/power/rates

    will any of this affect the amount they receive fro the pension

    • Wally David says

      Thank you for your question, Jarrod.

      By contributing $280,000 towards the granny flat, your mother and father should still be treated as homeowners according to Centrelink’s granny flat rules. The contribution should not be included in the asset test of the pension. This would also mean no rent assistance would be payable. This is assuming that all the other granny flat requirements are met.

      Centrelink does have special rules in place for these granny flat arrangements to ensure they’re not a means for people to give away large sums of money so they can increase their pension. You can speak to Centrelink’s Financial Information Service (FIS) on 132 300 to double-check that everything you’re doing is above board.

      It is vital you have a formal agreement drawn up to ensure that everything is documented. This will protect all stakeholders, should there be any family disputes or changes in circumstances.

      – Wally

  46. says

    My 86yo mother has gone into a nursing home. We have to sell her home to pay a bond of $380k to the village. They are currently taking 85% of her pension. Once she pays the bond, they will earn the interest on it, plus take an additional $331 per month from that bond money for 5 years. She has $10k in the bank and currently gets the full pension (minus the 85% each fortnight.
    She wants to give us 3 children the balance of the sale money, approx $200k divided by 3. She said she has no need for it once her monthly fees and bond are met.
    What is going to be counted if she does this? She is happy with her $10k bank balance which allows her to continue to play bingo and the occasional outing. She will have no other expenditures.

    • Wally David says

      Thank you for your question, Helen.

      You can only gift up to $10,000 each financial year or up to a maximum of $30,000 over 5 years. By gifting $200,000 in one financial year, $190,000 ($200,000 minus $10,000) is defined as a deprived asset. The deprived asset will continue to be assessed against your mother’s pension for a period of 5 years.

      Make sure you advise Centrelink of any gifting and changes within 14 days.

      – Wally

  47. says

    Hi there. A friend of mine receives parenting payment. She is single with three kids. She just received a payout of $80,000 from a block of land she had with her ex. She is buying a car & going overseas. She has no other assets or income. I’m sure this will effect her payments but she thinks it won’t! Can you give some advice please? Much appreciated! ( she also has to pay legal aid a substantial amount, will that still be classed as income tested?)

    • Wally David says

      Hi Lizza,

      It doesn’t look like her Parenting Payment would be affected. Her assets are below the allowable limit ($339,250 for a non-homeowner). You stated she has no other sources of income and any money left in the bank from the $80,000, wouldn’t be enough to affect her payment under the deeming rules.

      She still needs to notify Centrelink of changes to her circumstances within 14 days to ensure she receives the correct payment.

      – Wally

  48. says

    I understand the gifting rule, but what I’m not clear about is how she will be penalised. It seems to me that whether she hangs onto the balance or gifts it to us, she will be penalised the same way..by reducing her pension? Will they calculate her new worth as the entire value of the sold house (approx. $580k). Or just the balance after paying the bond? $580k less the bond of $380k = $200k. How does it work when there is a security bond at a nursing home involved? Is the $380k considered her home of residence asset and not counted? I just want to understand it clearly so that I can explain it to her because English is not her first language.

    • Wally David says

      Hi Helen,

      That’s right – the balance will be assessed in the same way whether it’s gifted or remains in the bank account. The main difference is your mother would lose any bank interest she would otherwise earn on the money.

      On your second point, the bond amount will be exempt from the pension assets test. That means as you correctly stated, only the residual of $200,000 would be assessed against the pension. She would be treated as a non-homeowner and have access to the higher asset limit.

      I hope this clarifies matters for you.

      – Wally

  49. says

    Great site Wally found very informative my question is I’m married and turn 55 soon have both been unemployed for several years.We own our home and a 1990 holden and need to renovate the bath room in a way to assist us when my 91 year old father visits plus for our older age disable friendly etc.My FSS advises me I can draw upon this saving tax free of $35,000 but wouldn’t require this much for the renovations.If I applied for say 15,000 for the repairs how would this affect our Centerlink payments.Regards

    • Wally David says

      Hi Ian,

      Thank you for your feedback on the site.

      Centrelink do not assess the value of your principal home against your entitlement. This normally extends to value of any home maintenance or improvements you make.

      You should always seek advice before withdrawing funds from super.

      – Wally

  50. says

    Great site. I know my age pension neighbours have given around $160,000 to their kids over the past 10 years (kids pay all of the parents’ bills and holidays etc at their expense and look after them, parents want to chip in). Is this ok? They own their home and have no other income or much in assets. Thanks

    • Wally David says

      Thank you for your question and feedback.

      It’s a hard one to answer directly without knowing the full details. You are allowed to gift up to a certain limit each year without affecting your pension. Also, any gifts made more than five years ago are generally not assessed. Read more about gifting at – How much can you gift?

      Regular payments given by an immediate family member to assist with living expenses are generally not assessed as income for Age Pension purposes.

      Though it’s impossible to tell whether your neighbours meet any of the above criteria without knowing all the facts.

      – Wally

  51. says

    my mother-inlaw is planning on purchasing a house for us and her to live in. the mortgage will be in her name only. we estimate the house at around 250,000 will this affect her pension process?

    • Wally David says

      Hi Jose,

      I don’t quite have enough information to give a proper response. Centrelink do not assess the value of your home against the Age Pension. If she will be living in the house and has no other assets or sources of income, she should receive the full pension.

      I would strongly encourage your mother-in-law to seek some advice prior to taking out any mortgage.

      – Wally

  52. says

    Hello Wally, I began to read the posts then realised you had SO MANY people calling on your wonderful advice that I skipped to the end, so forgive me if you have replied to this type of question before.
    I am about to receive an eighth share in an uncle’s estate, worth about $67,000. As a single pensioner who owns my own home and with assets within the allowable range, would I still receive my full pension?
    Thank you very much.
    Carol

    • Wally David says

      Thank you for your question and kind words, Carol.

      This topic has definitely generated lots of discussion! In response to your question, it depends on what those other assets are as to the impact on your pension. For instance, if you have non-financial investments (eg. car, caravan) totalling $60,000 plus another $135,000 in the bank – you would still receive the full pension. Assuming you have no other sources of income.

      The best thing to do is update Centrelink once you receive the money to ensure you’re paid the correct amount. If your pension is reduced slightly, there may be options available to counter the impact. Please see my related post for more details – How to increase your pension?

      I hope this helps.

      – Wally

  53. says

    Hi Wally,
    I am encouraging my uncle to put his house to rent and use that rental income to rent an apartment closer to the beach. He already has income coming from an investment property hence his pension is already reduced. How does my idea further affect him financially? Is it worth his while to rent or take the plunge and sell his principal property in order to buy closer to the beach?
    Thank you!

    Annabel

    • Wally David says

      Hi Annabel,

      If your uncle leases out his home and rents elsewhere, he would likely be treated as a non-homeowner by Centrelink. This means the value of his home would be assessed against the asset test and the rent against the income test of the Age Pension. He would get access to the higher asset limit for a non-homeowner, though still may suffer a reduction in his pension as a result.

      If he sells his home and buys another home to live, then the impact on the pension really depends on the amount he gets for his home, and what he uses to purchase the new home. If both homes are worth the same value, then there should be no impact on his Age Pension.

      I hope this helps.

      – Wally

  54. says

    Hello Wally,

    I would appreciate some advice please. I have just retired on an aged pension and live in Housing Dept accommodation. I have approx $30k super untouched and $18k in the bank. I will prob receive about $250k from a parent’s will. Could you please advise me how this will affect the pension and HD rent?

    Can I use some of that money on an overseas trip? Can I give any away? Buy a new car, etc. How can I invest the bulk?

    Thank you in advance

    Jennifer

    • Wally David says

      Hi Jennifer,

      A single, non-homeowner pensioner with $295,000 in financial investments should be entitled to approximately $735 per fortnight in Age Pension. This compares to the maximum pension rate of $842.80.

      If you spent money on an overseas trip then this is not normally assessed against the pension. If you gift money then it depends on how much you gift. Please see my related post for more info – How much can you gift? The market value of the car and any investments will be assessed against the pension.

      I’m not familiar with the Housing Department rules, so unfortunately I can’t comment on this aspect.

      – Wally

  55. says

    Hi Wally What a fantastic site,very informative. My question is that my mum who is on a carer pension is (looks after a mentally ill person) looking at moving in with me as she is helping me to purchase a property with a granny flat. The big question is will it effect her payment if she rents her house out ,her house still has a mortgage of $60,000 and she will be going on the mortgage for the new property which is 52 0,000 or will she have to sell her property. Thank you David

    • Wally David says

      Hi David,

      Thank you for your feedback on the site.

      If your mum rents out her former home, she will likely be assessed as a non-homeowner. This would mean the net value of the home, plus any rent she receives, will be counted against the asset and income test. Depending on the value of her home and other assets, her pension may be affected.

      She should definitely get some advice before doing anything.

      – Wally

  56. says

    Hi Wally,
    Could you please advise me on the follow. I am 63 and hope to retire at 65. I will have a super policy valued at $150,000 and $30,000 in a savings account. I own my own home and car. I am also receiving an inheritance of approximately $50,000 within the next 6 months. If I retain all of the above will any of this affect my age pension?

    • Wally David says

      Hi Gaylene,

      A single pensioner that owns their home can have an additional $196,750 in assets before their payment is affected. Based on what you have stated, you will have roughly $230,000 in assets plus the value of your car. That would mean you receive a reduced rate of pension using the current rates and thresholds.

      – Wally

  57. says

    Hi Wally,

    My Uncle is on the pension and is living in a housing commission, has recently received a sum of 120,000 from a “will” and he is wanting to give his sister her share of the funds 40,000. Will this be considered as a gift ? Also with the funds left over in his account will this affect his pension?

    • Wally David says

      Hi George,

      If your uncle was left the entire sum and he chooses to share with his sister who was excluded from the will, then this would likely be treated as a gift by Centrelink.

      You can gift up to $10,000 each financial year without affecting your pension. If you gift over these limits, Centrelink will assess the excess amount as a ‘deprived asset’. This deprived asset will continue to be counted as an asset and deemed under the income test against your pension for a period of 5 years.

      It would depend on the level of his other assets and income as to whether his pension is affected. You can use Centrelink’s Online Estimator to calculate any impact. A link to this tool can be found in the ‘Resources‘ section.

      – Wally

  58. says

    Hi David
    My Mum is 90 in age Dad 91 they are inheriting $270000 in an estate she has $19400 in her bank account Dad has $51000 in an Account they own there home can you tell me if and how much there pension will be and how much pension they will lose

    • Wally David says

      Hi David,

      Based on the information provided, your parents would have $340,400 in the bank after the estate is finalised plus their home. A pensioner couple with $340,000 in the bank and no other assets or sources of income, should be eligible to around $589 each in pension per fortnight.

      – Wally

  59. says

    Hi Wally et al,

    I am 62 and receive a Comsuper pension of $2000./mo and a compensation payment of $2000./mo(the comp stops at 65). We own our home valued at approx 400k. I have approx 600k here and 400k in term depsosits overseas. My Wife, does not work and has no assets, she is 37 and we have a 2 year old child. We have just relocated back to Australia and I am currently still classed as a non-resident but will likely have to change that this year.

    I want to reduce taxes AND allow myself(eg age pension at 65) and Wife(eg family payments and possibly newstart) to access Centerlink benefits if possible – she has applied for Family Tax benefit but as yet no payments.

    I am considering putting the above funds in two super accounts – one for me and one for my Wife(perhaps the bulk in my Wifes’ account as we do not need it as yet and she will later on). I belive we are better bringing the funds from overseas because the income they produce will be assessed against our taxes here…at marginal rates??

    Would you agree that this is the best plan for reducing tax obligations AND still be able to access Centerlink benefits as they will not assess these funds… eg I believe super funds are not assessed for me until age 65(or 65.5??) and also not for my Wife until she reaches 65 (I assume super funds in my Wifes’ name will not be assessed until she turns 65 for any Centerlink benefits??

    Would you suggest anything different now or at retirement age of 65 for me or her?

    Cheers for your prompt reply as we would like to do something before 30 June!

    AW

    • Wally David says

      Hello AW,

      Given the complexity of your questions, I would strongly suggest you seek professional advice.

      Money you have in super (accumulation mode) while under Age Pension age is not assessed as an asset for Age Pension purposes. Therefore in some situations, there can be merit in using this as an avenue to potentially increase entitlements. However it depends on a range of factors including taxation, contribution limits and the need for accessibility to funds. There is rarely a one-size-fits-all approach to these matters.

      This is a general advice forum only. I can’t provide personalised advice without knowing all the facts and going through the proper process.

      – Wally

  60. says

    Hi Wally, I am 67 years old and on the full aged pension and own my home. I am single and have no dependants. I have no other income or assets. I was thinking of taking out a reverse mortgage and would receive $167k for this.
    Would this effect my pension? Do you think reverse mortgages are a good or bad idea?
    I have no plans to move from my present home.

  61. says

    Hi Wally,
    Thank you for such a great forum. I am turning 65 at the end of July and my wife who currently works will turn 65 next January. She has approx. $13k in her Super , still accumulating. We want cash this in when she retires and place it a Term Deposit Account. For emergency funds. I have approx.$31k in an Account Based Pension which I currently take $500 a month . I want to know how much a month I can take before it will effect my Aged Pension . and does the amount I take get added to what my wife earns.

    • Wally David says

      Hi Leroy,

      Thank you for your feedback.

      Currently an account-based pension will have a non-assessable amount, that reduces the chosen income payment. It means only a portion of the nominated income payment is assessed and can often result in a much lower income assessment by Centrelink. In your case, it may not be a case of the entire $500 per month being added to your wife’s income and assessed by Centrelink.

      I’m afraid without knowing all the details and seeing the schedule for the account-based pension, it is impossible for me to quantify. However your superannuation provider should be able to provide you with this information.

      – Wally

  62. says

    HI mum sells house has $250.000 left that will go in the bank. She will rent a. house she is on a pension. Does she get rent assistance and does it affect her pension ? Thank you

    • Wally David says

      Hi Roxy,

      Your mum may be eligible for rent assistance, if she pays rent. For information, please see the Department of Human Services website.

      A single, non-homeowner pensioner with $250,000 in the bank and no other assets or sources of income, should receive approximately $765 per fortnight in pension. This figure would be higher again if they’re eligible for rent assistance.

      – Wally

  63. Sousa M says

    Hi,

    My mother is 74 years old and is a widow and has no one.
    We have a home my father left us (me and my mum). The house is of both and is old.
    She has her one account about 12.000€, to pay bills, she has no car and she is a very sick women. My mother pays her taxs (IRS) in Portugal.
    My mothers accounts are also in my name because she has also no mobility, and has no car to go shopping, we dont live in the city.That way I can by her what she needs.
    I live in the first floor and my mother lives down stairs. I work and I’m divorced and have a son 18 years old still studying, I’m also a sick person I pay my bills, and my son’s school. I have my own accounts and pay my one taxes (IRS).
    We live in Portugal, my mum receives an Australian Pension.
    Does this affect in anyway her Australian Pension? We are being blackmailed by people on holidays that have homes here in Portugal and in Australia and don’t receive the pension. How can we protect ourselves form this. Thank for your help.

    • Wally David says

      Hi Sousa,

      I’m sorry to hear of your mother’s plight.

      People who have lived in Australia but now live in another country can still claim an Australian pension. Overseas assets are included in the assessment of your pension.

      Keeping Centrelink updated is the best way to avoid any problems. You can call Centrelink International Services about your payment in Portugal on 800 861 122.

      – Wally

  64. says

    I turn 65 next year and am going to go on the Age Pension I went to Centrlink and they went through all my assets etc. They said I would get the full amount of the pension as I now rent elsewhere, and the Tenanted house was under the amount of assets that I am allowed. The house is valued at $400,000.
    The only thing they didnt tell me is that my Mortgaged house which has tennants in it pays for the Mortgage which is $280,000 This is not fully drawn, still has $50,000 sitting there on the line of credit. Do Centrelink take that full amount of the loan to equate the pension due or do they just take the drawn down amount.

    kind regards
    Anne

    • Wally David says

      Hi Anne,

      If you have an investment property, Centrelink will generally use the net asset value, meaning they will allow for any investment loan against the property. Generally debt secured against an investment asset is deducted from the value of that asset.

      The amount actually drawn against the loan is the figure used.

      – Wally

  65. says

    Hello
    If I sell an asset can I still get old age pension.
    Or is there again this 5 year period like with the gifting
    or does this just look at the amount of money I have in the bank after the sale ?
    Would you please let me know?
    Thank you very much

    • Wally David says

      Thank you for your question, Liba.

      It really depends upon what you do with the money from the sale. If you place the proceeds in the bank, then the money will be deemed as explained in the above article. If you gift the money, then the gifting rules will apply.

      Merely selling an asset doesn’t always mean it will reduce your pension. The value of the asset should already be recorded against your records. The main difference will be in the income assessment, depending on the type of asset.

      The safest thing to do is to notify Centrelink once you receive the money from the sale. If your pension is reduced as a result, you can always use any avenues available to increase your pension and then update Centrelink once again.

      – Wally

  66. says

    Hi Wally,
    Hoping you can advise me.
    I am retired and receiving a aged pension, which is adjusted each fortnight according to my husbands wages.
    My husband is due to retire in 18 months, but has decided to withdraw his super now, Approx $90,000 .
    We only have $16,000 in the bank.
    Will he have to pay tax on the super, and will it affect the amount I get on my pension. Thank you Wally.
    Sylvia

    • Wally David says

      Hi Sylvia,

      If you’re aged 60 or over, any withdrawals from a taxed super fund are completely tax-free. If you have an untaxed fund such as a government super fund, different rates may apply.

      In terms of the Age Pension, it depends a little on the situation.

      Once you reach your Age Pension age, your accumulated super becomes assessable under the deeming rules for financial investments. This means it is essentially assessed in the same fashion as money in a bank account. The exception to this rule is if you are drawing a pension from the super (different rules apply).

      If your husband has not yet reached Age Pension age, his accumulated super balance would not be counted against the assets test by Centrelink. This means withdrawing money in super and placing into a bank account would mean these funds would become assessable by Centrelink. This may lead to a reduction in your pension as a result.

      I hope this helps.

      – Wally

  67. says

    Hi Wally,

    I am on an part aged pension and would like to know if I receive an “interest payment” on my bank account greater than $2000 do I need to advise Centrelink ???

    • Wally David says

      Hi Rick,

      If the funds will remain in your bank account and you don’t plan to spend or use in the short-term, then technically you should notify Centrelink.

      – Wally

  68. says

    Hi Wally
    My husband passed away recently and Centrelink has been advised.

    As a single person i now have a term deposit of $75,000, shares valued at $35,000 and own my house and no other assets. Now that i am on a single pension:

    1. Will the $75,000 investment earning 3.15%pa affect my pension

    2. My private health fund has recently demutualised and given me shares valued at $35,000. Will this affect my pension?

    3. How much can i earn in investments before my pension is affected?

    I find this all too daunting and find your explanations easy. Thanks for your help.

    • Wally David says

      Hi Adele,

      As stated above, a single pensioner can have financial investments of $139,428 and still receive a full pension. Financial investments do include things such as your bank accounts, term deposits and any shares.

      Based on your figures, you should have a total of $110,000 in financial investments ($75,000 + $35,000). This means you should receive a full Age Pension, assuming your only source of income is from these financial investments and your total assets (eg. cars, personal belongings) are below the asset limit of $202,000 for a homeowner.

      I hope this helps.

      – Wally

  69. says

    Hi Wally,

    I did write to you a month or two ago but cannot find a reply. Never mind, I will try again.
    My father in law loaned us $70,000 to put towards the building of our home and which was going to be used to keep both my Father in Law and Mother in law in once they could no longer remain independent in their own home. The home is now complete and has a granny flat set up downstairs. Unfortunately Mum passed on and Dad still is living in their home independently . He is 97 and is receiving a part pension from Centrelink.. He has stated he has assets of $525,000 including the $70,000 which he gave us in 2010. He now says that he does not want the money back but leave it in the house. My question is: Can the $70,000 be stated as a gift and therefore he declares $10,000 of it per year. If this was the case then his asset base would drop to $495,000 currently. His pension has been reduced again this year to an amount of $348.00. What can be done regarding the $70,000 he gave us to complete the house which we were going to use for them and can his pension be increased as he only gets the advantage of his investments every 6 months.

    Many Thanks Wally
    Kind Regards
    Ross

    • Wally David says

      Hi Ross,

      Your previous question on June 16 and my reply was posted on – How much can a pensioner have in assets before affecting their payment?

      Your current query is a little tricky. The loan can be forgiven with some points to keep in mind.

      As the loan is above the $10,000 annual gifting limit, your father-in-law could consider staggering the forgiving of the loan throughout different financial years (forgive $10,000 per financial year over a 3-year period).

      However, the loan cannot be forgiven retrospectively – the gifting date that will apply will be taken from the date that he notifies Centrelink that the loan (or part of the loan) has been forgiven. He could then potentially forgive $10,000 from the loan in each of next three financial years.

      I hope this makes sense.

      – Wally

  70. says

    Hi Wally, Read through posts and replies. Great service and advice.

    I plan to retire next year (65) and have super of about $450k and own my house. I have assets of approx.$100k. My wife is 60 and has approx.$120k super. If I took a super pension of $60k per year for both of us would I be entitled to any Centre Link aged pension.

    Bob

    • Wally David says

      Thank you for your feedback, Bob.

      Assuming your wife is not working, then you should be eligible to at least a part pension. However you should get some advice beforehand, to see if anything should be done prior.

      From 1 January 2015, the rules are changing with superannuation account-based pensions. This will mean all financial assets are assessed under the deeming rules, rather than the favourable treatment account-based pensions currently receive by Centrelink.

      Importantly, any account-based income streams held by pensioners before this date, will continue to be assessed under the existing rules. So it’s worth investigating whether there is merit in starting a superannuation pension, prior to the rules changing. This will obviously depend upon your individual circumstances.

      – Wally

  71. says

    Hi Wally

    I was reading through all this great advise, but it looks like its all regarding “age pension”.

    My question is regarding anyone who receives a centrelink Payment like Carer payment and Carer Allowance, and Disabillity Payment. Is there a limit to how much you can have in a savings account before Centrelink stop the payments?

    For some reason I have it in mind that I cant have more than $5000.00 in savings, is this correct?

    Cheryl

    • Wally David says

      Hi Cheryl,

      Centrelink use the same tests across many of different payments. The income test that applies to the Age Pension, also applies to the Carer Payment and Disability Support Pension. That means the figures stated above are applicable to these other payments.

      The Carer Allowance is not income and asset tested. This means your bank account balances and assets, do not affect the rate of payment.

      I hope this helps.

      – Wally

  72. says

    HI WALLY ,

    MY PARENTS ARE ON THE PENSION AND MY MUM IS A CARER FOR MY DAD , APPROX 10 YEARS AGO MY PARENTS HELPED ME BUY MY HOUSE BY USING THERE HOUSE AS A SECURITY AS I DIDNT HAVE A DEPOSIT AND WHEN I APPLIED FOR THE LOAN IT MADE IT EAISIER FOR THERE NAME TO BE ON THE CONTRACT/LOAN , AFTER 10 YEARS I NEEDED TO SELL THE HOUSE TO UPGRADE , AFTER SELLING THE HOUSE WE RECIEVED $400,000 FROM THE SALE AND THAT GOT TRANSFERRED TO MY NEW HOUSE THATS ONLY IN MY NAME. CENTRELINK NOW HAVE CANCELLED MY PARENTS CARERS PAYMENT BECAUSE THEY SAY THEY HAVE GIFTED THE MONEY TO ME , I TRIED TO EXPLAIN ALL THEY DID WAS TRY AND HELP ME AND NOW THERE PAYMENT HAS BEEN CANCELLED AND WE ARE WAITING ON CENTRE LINK TO SEE IF THERE PAYMENT WILL BE REINSTATED AND HOW MUCH WILL BE DETUCTED . MY PARENTS OWN THERE OWN HOME. THE SALE OF MY PROPERTY BUT IN THERE NAME WAS SOLD FOR $400,000 WITH NO MONEY OWING AND THE MONEY WAS TRANSFERED TO MY NEW HOUSE , WILL THERE PENSION AND CARERS PAYMENT BE AFFECTED AND IF YES BY HOW MUCH $400,000 DIVIDED BY THREE $133,000 EACH MUM DAD AND ME

    • Wally David says

      Hi Jay,

      That must be quite a stressful situation for you and your parents.

      If you have paid all the mortgage repayments and outgoings associated with the property, you may be able to request Centrelink undertake a beneficial ownership assessment to determine the true level of ownership. This is normally completed by a complex assessment officer and they will look at things such as who maintained the property, who paid the bills etc. I have seen cases where no gifting/deprivation has be assessed.

      It’s hard to comment on how your parent’s pension may be affected without knowing all the facts and figures.

      – Wally

  73. says

    Hello Wally,

    I agree with former comments regarding your clear and concise explanations and thoughtful clarifications. You are indeed a breath of fresh air!

    Here is my burning question:

    My in-law parents (in their late 70’s and mid 80’s) want to move closer to their three adult children. We all live in WA. They currently receive a pension of $673 each fortnightly. They own their primary residence (no mortgage) and together have approx $200,000 in their savings the interest off of which they also live (approx $6000-$8000 pa depending on interest rates). They have no other properties or assets, etc. Upon a rough calculation, their combined monthly income is just over $3400 based on a 3% interest rate on their $200,000 savings.

    What we know and please correct us if we’re wrong is:

    1) They can rent out their primary residence for 6 years and not have to pay Capital Gains Tax at time of sale.

    2) They can sell their primary residence and not buy another for up to two years without the proceeds of the house sale affecting their pension entitlement.

    Now for the burning question:

    Can they rent out their primary residence and use the rent generated by their primary residence to rent another home closer to their children without this affecting their current pension? There are some sound reasons for this (i.e. no stamp duty to pay on renting and it’s not a good time to sell at the moment.)

    On behalf of all my in-laws I thank you for any insight you may be able provide on this important topic.

    Kind regards,

    Gloria

    • Wally David says

      Hi Gloria,

      Thank you for your kind words.

      You seem to have a good handle on the rules. On your last point, if they leased out their former home and rented elsewhere, they would likely be assessed as a non-homeowner. This would mean the value of their former home would be assessed as an asset. Though they would get access to the higher asset limits for non-homeowners. Please see my related post for more details on these asset limits.

      They may also qualify for rent assistance if they meet all the requirements. Read more at the Department of Human Services website.

      I hope this helps.

      – Wally

  74. says

    Hi, my husband is 67yrs old just finished working self employed and currently receives approx $160 pf from Centrelink. I am almost 59yrs and earn $400 pw. He has $90,000 insuper and we have $100,000 In the bank. How much will he now get in pension? I want to retire at 60 and use money and his super to purchase small apartment in the UK where we still have elderly parents. My husband is adamant that he wont get any pension if we do this. Can you give us some advice? Many thanjs Jo

    • Wally David says

      Thank you for your question, Jo.

      Owning a property overseas does not preclude you from receiving an Age Pension. Centrelink will need know about the property and its value, which will be converted into the equivalent Australian dollar amount. Unfortunately I don’t have sufficient information to provide an estimate of your husband’s payment rate.

      – Wally

  75. says

    Hi,
    I am about to receive the Aged Pension. I have no assets other than my home which is valued at $190,000 and a mortgage of $89,000. I do casual work that is below the taxable limit (as worked out on my recent financial year). My question is…if I decide to let a family member rent my home @ $150 a week (which would cover my mortgage payment) and rent somewhere else does this effect my Pension?

    Thanks, Cheryl

    • Wally David says

      Hi Cheryl,

      By doing what you’re considering, you would be treated as a non-homeowner by Centrelink. This would mean the value of your home and any rental income, would be assessed against your pension. The extra assessable income may lead to a decrease in your payment. Though without knowing the amount of your employment income, this is impossible to quantify.

      However as you will be paying rent at your new home, you may qualify for rent assistance. You can read more about rent assistance at the Department of Human Services website.

      – Wally

  76. says

    Hi Wally. It’s fantastic to be able to ask a question in this way! Thanks.
    My mum needs more money than the pension. She’s put her house (in the country) on the market planning to downsize and have some money left over. There’ll be little left over however.
    I’m wondering if she could sell her house, buy another property- in the city- and rent it out, herself renting in the country at a lower rate.
    I know her pension wold be reduced if she earns too much rent but are there also tax implications?
    Hope this makes sense.

    • Wally David says

      Hi Mandy,

      Centrelink do not assess the value of your principal home where you reside against the Age Pension. However, if you move out of your home and rent another residence, you would no longer be considered a homeowner. If your purchase another property as an investment property, the value of the property would then be assessed as an asset and any rental income against the income test of the pension.

      As a non-homeowner, you do have access to a higher asset limit than as a homeowner. Also you may be entitled to rent assistance on top of your Age Pension. These two factors may assist offsetting any impact on your pension entitlement.

      – Wally

  77. says

    Hi Wally

    My mother is on an aged pension my father has just recently passed away and I am trying to work out her entitlements to the pension.
    She has approx. $100,000 in the bank and approx. $60,000 in shares. She also owns her own home. Can you advise if she is still entitled to a pension and if so, approx. how much. thanks April

    • Wally David says

      Hi April,

      If your mother owns her home and has $160,000 in financial investments, she should be eligible to approximately $828 per fortnight in pension. This is assuming she has no other assets or sources of income.

      – Wally

  78. says

    Hi there my father 63 yr old on newstart (applying for disability currently) is struggling with medical bills. He would like to take 3,000 out from his super, will this stop or reduce his newstart allowance for a period and if so how long for?

    • Wally David says

      Thank you for your question, Agnes.

      The amount withdrawn from super is not treated as income. If the entire amount is used to pay medical bills, then there should not be an impact on his Newstart.

      If the funds are not used and left in a bank account, then they would be assessed as an asset and under the deeming rules. In this instance, the impact (if any) on his Newstart would depend on the level of his assets and income.

      I hope that is clear.

      – Wally

    • Wally David says

      Hi Norma,

      Currently a single pensioner who owns their home, can have another $764,000 in assets and still be eligible to some Age Pension.

      – Wally

  79. says

    Hi, my mother in law is on a disability pension and father in law on a caters pension, the are not working. My mother in law has shares she would like to sell all together possibly a value of $12000, will this affect her pension and will she need to do a tax return this financial year and pay capital gains tax? She has held the shares for longer than 2 years, she is finding it hard to get all the information before selling the shares..

    • Wally David says

      Thank you for your question, Crystal.

      Bank accounts and shares are both considered financial investments by Centrelink. This means they are assessed in the same fashion when calculating your payment rate. Selling shares and placing the proceeds into a bank account, should have no impact on the payment. This is assuming that Centrelink has been made aware of the shares previously.

      In terms of tax, this would depend upon a few factors. Namely, whether a gain or loss has been made on the shares, and what other income they receive (if any). Please see my related post for more details – How much can I earn before paying taxes?

      – Wally

  80. says

    Hi Wally,

    We appreciate you answering questions – you are a trooper, thank you.

    What is our great concern, is for our friend.

    Our friend is a Carer, caring for a disabled adult daughter.

    The Carer is under pension age, which means that their pensions will still be affected by the new Deeming rules which take affect in 2017.

    What is worrying, is that their Disability and Carer Pensions will be reduced due to their savings.

    1) Since they are related and money is already pooled, is it possible to reduce the upcoming Deeming charges when the threshold is reduced from $46,600.00 to $30,000.00 by placing their savings in a Joint Account? The disabled adult does not have any assets.

    2) Do you have another suggestion to reduce the Deeming charges in cases such as these?

    I read that overseas investments will not be Deemed, that does not make sense?

    Thanks mate,
    Terry

    • Wally David says

      Hi Terry,

      Thank you for the kind words.

      The deeming rates will almost certainly change between now and 2017. Your friend should calculate what impact the new deeming thresholds will actually have, closer to the time. At that stage, you can work out what alternatives are available to reduce any impact on the pensions.

      There are a few investments that are not deemed by Centrelink. For instance, if you are under age pension age and you place funds into super, this money is not counted as an asset or assessed under deeming. Your friend should wait closer to the time and get some advice on the best way to go.

      I hope this helps.

      – Wally

    • Wally David says

      Hi Terry,

      It is tough to find investment options that are both safe and provide a competitive interest rates. Unfortunately I can’t provide investment advice on this forum. You could try one of the online comparison sites such as InfoChoice to compare the rates on offer.

      – Wally

  81. says

    Hi I am 59 and on a wife pension [full] my hubby is 76 and on a full aged pension. We are selling our home and going into a life lease unit . we pay $112;000 for the unit and $95 per week . This will leave us with around $165,000 in the bank . will this affect our pension please ? thank you

    • Wally David says

      Hi Dianne,

      As mentioned, a pensioner couple can have financial investments of $245,086 and still receive a full pension. This assumes the only source of income is from financial investments, and that total assets are below the maximum allowed under the assets test for a full pension ($286,500 for a homeowner/$433,000 for a non-homeowner).

      If you have $165,000 in the bank and no other assets or sources of income, you should continue to receive the full pension rate.

      You still need to update Centrelink within 14 days of any change of circumstances, even if your payment rate is unaffected.

      – Wally

  82. says

    Hi Wally,
    I am on Parenting Payment Partnered, have no other assets, 2 children with my husband who is on Newstart. Currenty Husband owns home but is just about to be sold with $320,000 in bank. What will we be entitled to receive on Parenting Payment, Family Tax, and Newstart + Rent Assistance? Does my husband’s savings account affect my payment or his only?
    Thanks

    • Wally David says

      Hi Julz,

      Centrelink assess your combined total assets and income when working out your payment rates. They do provide a handy online estimator tool, that allows you to calculate what you may be entitled to, across a range of payments. You can find a link to this tool on my Resources page.

      Hope this helps.

      – Wally

  83. says

    Hi Wally,

    Just a quick question on my mums behalf. She is 63 yrs old on a disability pension. She has only ceased employment in the last few weeks. She has applied to withdraw her super ($42,000 approx). How will this effect her centrelink disability payment ?

    Thank you,

    • Wally David says

      Thank you for your question, Brooke.

      It depends upon what other assets or sources of income your mum has. If she is left with less than $139,428 in financial investments (e.g. bank account, shares), then she should receive a full pension. This is providing she has no other sources of income, and her total assets (eg. cars, personal belongings) are below the relevant limit under the assets test (e.g. $202,000 for a single homeowner).

      If she is spending the money on home repairs or a holiday, then this should also have no impact on her pension.

      – Wally

  84. says

    My father is in his 80s and looking to downsize his house to a single storey more manageable house to live in. In downsizing he will pay less for his new home than he receives for his current one – resulting in around $350,000 in the bank. He receives a part pension – will it be affected by having this money in the bank?

  85. says

    My wife is receiving a pension of $318 per fortnight
    She also receive £213 per 4 weeks from UK Pension
    I receive no pension in Australia because of the 10 year rule
    I do earn $2000 per 4weeks and receive a pension of $413 per 4 weeks
    Our joint savings are $17000
    and $3000 in shares.
    We don’t own the property where we live but pay no rent.
    Is my wife entitled to any more pension from Centrelink.
    Terry

    • Wally David says

      Hi Terry,

      I’m a little confused. You stated in one line that you receive ‘no pension’ and then on the next line, you state that you receive a pension of $413. I gather this isn’t a Centrelink pension you are referring to.

      To be eligible to $318 per fortnight in Age Pension, you would need to have assessable income of approximately $1,552 per fortnight. This is assuming you are assessed under the income test. Your figures don’t quite add up to this amount, though I may be missing something.

      A simple way to check what Centrelink have recorded is to phone up and request an Income statement. This will list all your assets and income that is being assessed against your wife’s pension. Cross check that against your records and update Centrelink with any changes.

      Hope this helps.

      – Wally

  86. says

    Wally,
    I have a question re Centrelink rental assistance and retirement village entry.

    my mother currently rents and gets aged pension and rent support. She is very poor with some furniture and and small sum in bank just for emergencies., as her only assets.
    Her rental property has been sold and she must vacate but because of various very restrictive mobility and health issues we can not find replacement rental.
    I want to help her move to a unit in a retirement village which I would have to pay for (approx $200K) and she would pay her weekly management and living fees from her pension. This amount would be a minimum of $300 p/fnight
    It seems there is an deemed $145K ‘entry contribution’ to the Retirement Village which if “she pays it” she is deemed a home owner and looses her rent assistance. But she can’t and won’t be paying or borrowing to pay for it.
    Apparently her name goes on the ‘lease’ even though i am paying for it and she will not be a ‘homeowner”and will effectively be still paying rent/fees
    So how can this be dealt with to maintain her much needed rental assistance?
    Thanks, Bill

    • Wally David says

      Hi Bill,

      It appears that you have quite a predicament. Your understanding is correct regarding the entry contribution and Centrelink treatment.

      If the facility is run under the Retirement Village Act, then no rent assistance will be available, unless the person has paid an entry contribution of less than $146,500.

      $146,500 is called the Extra Allowable Limit, which is the difference between the homeowner and non-homeowner assets test limit.

      If the facility falls under the Relocatable Homes Act, then a person could be eligible for rent assistance, irrespective of how much they have paid as an entry contribution. As the name suggests, the houses must be relocatable to be governed under this act (can’t be built using brick).

      Sounds technical, but you can simply ask the village management which act they fall under. Another option could be to try and find a retirement village that offers a rental option, offered under a standard ‘Residential Tenancy Agreement’.

      Please see my latest post for more information on retirement villages – Retirement Village FAQ

      I hope this helps.

      – Wally

  87. says

    Hi Wally,

    If you are managing to actually save money through your pension ever week what is the limits on how much you are allowed to save using the money you receive from your pension. I don’t smoke or drink, nor do I have holidays or go out anywhere, I just save. Am I in any breech of doing this or can they take my pension away or cut it down so I cannot save. After all instead of smoking or drinking it up like a lot of pensioners do, I am trying to save some money?

    • Wally David says

      Hello,

      Well done on managing to save money from the pension you receive. That is no easy feat these days with the rising cost of living.

      The above information gives you some idea how much you can have in the bank before your pension is affected. A single pensioner who owns their home, can have additional assets of up to $764,000 under the assets test, before they don’t qualify for any Age Pension.

      – Wally

  88. Ileana Kapic says

    Hi Wally,

    My parents of 70 and 71 are relocating interstate to enjoy being full time grandparents. They will be downsizing and expect a maximum of around $180,000 difference between the sale and purchase and not many financial investments. They will also have some relocation costs of around $15,000 at least. They also have combined super of $125,000 and assets that won’t reach $286,000 if they include super.

    However I was reading elsewhere that super money might be considered financial investments after this age and that the price difference could be considered an asset, leaving me quite confused as I thought the difference from the house sale would be financial investment and super, regardless of age would be asset.

    They currently do not work and receive a full pension and dad receives $118 a ft as a carer for mum.

    In trying to determine how this would affect there pension could you help clear some of this up for us. Is it likely to affect their pension? Also do they have spending restrictions on their own money if it is for themselves?

    Thanks for the great advice on your website. Kind thanks, Us.

    • Wally David says

      Hi Ileana,

      Thank you for your feedback.

      Once you reach your Age Pension age, your accumulated super becomes assessable under the deeming rules for financial investments. This means it is essentially assessed in the same fashion as money in a bank account.

      If you transfer your super into an account-based pension, the funds can be treated more favourably. In terms of the income test, an account-based pension currently does not fall under the normal deeming rules for financial investments. This normally means only a small amount of income you draw (if any) is assessed against your pension. The reason being is that these types of pensions contain a non-assessable amount. This often results in a much lower income assessment and a potentially higher Centrelink entitlement.

      Any funds your parents had left over after downsizing would be assessable. For instance, if the money was placed into the bank, this amount would be assessed against the deeming rules.

      There are no spending restrictions as such, though you need to keep Centrelink updated on your current state of affairs. Normally, if there is a large change in balances, Centrelink will ask what you did with the money. Often this can be for valid reasons such as, overseas holidays, car upgrades, house repairs and maintenance etc.

      I hope this helps.

      – Wally

  89. melanie says

    Hello Wally
    We are a retired couple on the age pension. We own our home. Our Son is wanting to help us pay our living expenses (ie power, rates, ph etc) and pay off a car loan as we currently don’t have a car and don’t have money in the bank. He is looking at transferring $2000 per month to help us by way of PayPal as he lives in America. Will this affect our pension and if so, by how much?

    • Wally David says

      Hi Melanie,

      Interesting question. After doing some research, it appears that where the funds are received from an immediate family member (e.g. son or daughter) and used for living expenses, they are not treated as income for pension purposes.

      The section in the Social Security law that deals with this aspect, can be found at the following website.

      It’s always a good idea to double-check with Centrelink, particularly where it is something outside the norm.

      Hope this helps.

      – Wally

  90. Kara says

    I am 58 y.o. and would like to know that if I withdrew my super (currently $80k) now, would it affect me receiving the age pension when I reach 65yo. I own my home & car & investment property with a net value of $150k. Would early withdrawal of super affect my Age pension entitlement?

    • Wally David says

      Thank you for your question, Kara.

      It really depends upon what you do with the money. For example, if you withdraw the money and paid it off your home mortgage, then the funds would not be assessable. If you withdraw the money and simply place into a bank account, then this amount would be counted against the pension. Though this may or may not have an impact on your future pension entitlement.

      As we have seen in the recent Federal Budget, the rules around the Age Pension change frequently. The amount you can have in assets and income will be different when compared to today’s limits.

      – Wally

  91. Laurie Farrugia says

    I’m 65 and still work part time and receive a part pension now, would i need to include my pension income with my normal part time income in the asset income, or do i just include my part time work and assets.

  92. Grace says

    Hi. Just wondering. My father lives on his own in his own house, bought outright many years ago and my mother now resides in a nursing home. He receives the Italian pension for both himself and my mother and the only asset he has is the house, car and some life savings in the bank. He is very elderly and is at the point were he needs looking after, He lives an Hour and 45 mins away from me, and is very against going into a nursing home . I would like him to sell the family home to live with my family. But he is frightened that he may loose his pension.
    I’d like to know if he will loose his pension and will have to rely on the value of the house as his lively income even though he wants to pay for his own granny flat to live with my family.

    • Wally David says

      Thank you for your question, Grace.

      It is a little tricky to provide too much information without all the facts and figures. Centrelink do not assess the value of your principal home against the Age Pension. However, if you sell your home and place the proceeds into the bank, this money would be assessed against your pension. How much it would impact your father’s pension, would depend upon how much he received, and his other assets and income.

      Centrelink will allow you to pay or transfer up to a certain amount of money for your granny flat, without affecting your pension entitlements. This is known as the reasonableness test amount. You can read more about this at – Granny flats – a win-win for all parties?

      Hope this helps.

      – Wally

  93. Brian says

    Hi Wally,

    Just a quick question on my dads behalf who is 66 yrs old on a aged pension. He has just finalised a divorce which will see him get approx. $320k. He wishes to access some of his super to use with the $320k to purchase a house. Would his pension be affected under these circumstances?

    Cheers

    • Wally David says

      Thank you for your question, Brian.

      The value of your home is not included in the assets test by Centrelink. If your dad is using funds from super to help purchase a home to live, this should in theory reduce his level of assessable assets. Though as a single person, the asset and income limits do also reduce, so this may impact the pension he receives.

      I hope this helps.

      – Wally

  94. Sally says

    Hi Wally
    My husband and I are on disability and carers pension,hubby has been diagnosed with a terminal illness and has received a tax free TIB payout of 83k we want to pay off the morgage and do some house renos,do we have to notify centrelink about the payout and will it effect our pensions?

    • Wally David says

      Hi Sally,

      I’m sorry to hear of your plight.

      You should notify Centrelink within 14 days of a change in circumstances. They will need to know how much you receive, and what you do with the money. If the funds are used to repay the home mortgage and complete renovations, they shouldn’t be assessed against your pension. Though if the funds remain in a bank account until the renovations are paid for and completed, they will be assessed during this period.

      – Wally

  95. Vivienne says

    We are looking at putting my father in law into a nursing home/aged care facility as he is no longer able to look after himself. We have gone through the ACAS assessment and have found a room (low care) at a nice home for him. He currently has a loan on an investment property (which is rented out) and is also paying rent himself (his current accomodation), he also owns 2 other investment properties (no loan on these).

    The rent he receives from the 3 rental properties is used to pay off his current loan, which means he doesn’t have the money to pay for the RAD (or enough to cover the DAP) so my husband and I are considering taking out a loan to cover the RAD and pay off the loan on his investment property (Our goal is to sell all 3 properties, but unfortunatley he has tried to sell them before but has had no luck).

    My question is if we take out the loan to pay the aged care facility (RAD) and his investment property, is this loan also counted when Centrelink work out his ‘means tested care fee’? – Keeping in mind that the rent he receives from all 3 properties will be used by him to pay off the loan, so he will not end up with any additional income.

    Regae

    • Wally David says

      Thank you for your question, Vivienne.

      For an investment property, Centrelink generally assess the net value of the home (allowing for any loan outstanding), along with the net income (after expenses). By you paying out the loan, he could potentially have full value of the property and a greater proportion of rental income being assessable. If more income is assessed this would likely impact the means-tested care fee.

      This is a guide only. It sounds like a bit of a tricky situation, so I recommend you seek professional advice before doing anything.

      – Wally

  96. Jenny says

    Hi Wally,

    I wrote earlier. I have sold my retirement villa and am renting at $290 pw. I understand that if I say I am going to re-buy within 12 months my financial assets will be classed as home owner – but I am not sure if I will re-buy within that time. If I say I am re-buying and don’t, will they take out that money at the end of the 12 months that my pension would have reduced by? – on the other hand, if I say no and they reduce my pension, will they repay that money to me?

    I will have $192K in financial assets at this time – how much will my pension reduce by if I say I am not re-buying? Is it better to say no, and get rental assistance, or can I still get rental assistance anyway?

    They are evasive about answers to these questions on the phone at Centrelink and I don’t think all the operators are experienced.

    Thank you for your reply.

    Jenny

    • Wally David says

      Thank you for your question, Jenny.

      I can’t really comment on how Centrelink will treat your situation if you change your mind about repurchasing a home. Though with financial investments of $192,000, and no other assets or sources of income, your pension should be calculated under the income test. The 12-month exemption for house sale proceeds only applies to the asset test. So, you may find you’re eligible to the same pension, irrespective of whether you make use this exemption or not.

      A single pensioner with $192,000 in financial investments, and no other assets or sources of income, should receive approximately $818 per fortnight. Rent assistance would be paid in addition to this figure (if eligible).

      You can use Centrelink’s Online Estimator to compare different scenarios to see which may suit. A link to this tool can be found on my ‘Resources’ page.

      I hope this helps.

      – Wally

  97. Kristie says

    Hi

    Need advice for my parents my dad is retied don’t own any houses only has 14000 in the account which joint with mum, he tried to get pension which only get $355 a fortnight , mum get 1800 a fortnight and her super is 66000 does that super affect the pension? even though she not retired or have taken it out? Such low amount :( makes no sense, i know looks alot combine but to rent bills food :( i will go get more info for them anyways at clink :)

    Thanks :)

    • Wally David says

      Hi Kristie,

      Centrelink assess you under both an income test and an asset test. The one that results in the lower payment rate is the test that Centrelink adopts.

      So, you can be entitled to a full pension under the asset test, but a small part pension under the income test. In this scenario, the latter would be paid.

      I’m afraid that’s just the way the rules are set out.

      – Wally

  98. Jacqueline Alexander says

    Hi Wally
    I am aged 68 and will retire in December — my husband is 66 and has been made redundant from his job as of December .We own our house and have a combined super amount of $390,00, and $ 30.000 in the bank as well as his package which will be about $40, 000 . How much of the aged pension will we be able to get as of January 2015? Thanks for your assistance.

  99. Shane says

    Dear Wally,

    I am on a disability pension and i do not own a home.

    I have total cash assets of $165,000 however $35,000 of that is in a first home saver account (which is exempt from centrelink income and asset tests until next July)

    My question is..when my first home saver becomes a ‘live’ bank account next year would I be better off investing that money and losing the corresponding amount off my full pension rate..or should i just roll that account into superannuation so i can keep the full pension? i am 35.

    Cheers

    • Wally David says

      Thank you for your question, Shane.

      I can only provide general advice on this forum, so I can’t advise you on which option you should choose. As a guide, if you have $165,000 in financial investments, and no other assets or sources of income, you should be assessed under the income test of the pension. So, if you have a bank account or investment that is returning more than Centrelink’s deeming rates, this should be greater than any pension you would lose.

      I hope that make sense!

      – Wally

      • Shane says

        Thanks Wally. One more question. Could you tell me how to find a trustworthy and preferably independent financial adviser? Is it the FPA membership that i should look for?

        Cheers

        • Wally David says

          Thank you for your question, Shane.

          The FPA has a ‘Find a Planner’ service on their website.

          A CERTIFIED FINANCIAL PLANNER® is the highest certification available worldwide, so that may be a good place to start as a filter.

          I hope this helps.

          – Wally

          • Shane says

            Hi Wally. Are there financial planners that write financial plans for a fee and don’t have trailing commissions on their products?

            They really put me off in light of the scandals with the banks.

          • Wally David says

            Hi Shane,

            Thank you for your question.

            Trailing commissions for new clients are now banned, introduced as part of the Future of Financial Advice (FOFA) reforms. Most financial planners should be able to quote you a fixed fee to prepare a Statement of Advice (written recommendation).

            I’m happy to try and assist you finding someone suitable, if you want to get in touch via the ‘Contact Us’ page.

            – Wally

  100. Josh says

    Hi Wally,

    Appreciate you cutting to the chase.

    My mother and her partner will get married soon. They each own their own house (each worth max 300k). Her partner is on the pension, Mum is still 5 years off.

    They have about $40-$50k each in savings and no other investments besides Mum’s very small Super.

    My question is will her partner’s pension be affected once they get married and move in together?

    Thanks Wally. Appreciate you helping. Found it hard to find this specific question on the Net…and without waiting on hold with Centrelink for ages.

    • Wally David says

      Thank you for your feedback, Josh.

      It’s great to hear you are taking an interest in your mother’s finances. As a couple, Centrelink assess your combined assets and income when calculating your payment. If they have two houses, only one can be nominated as their primary residence, and not be counted under the asset test. This would mean the remaining house would be treated as an investment property.

      Her partner would receive the couple pensioner rate, rather than the higher rate payable to a singles.

      To give you an idea of what her partner’s pension rate may be according to their level of assets, please see – How much can a pensioner have in assets before affecting their payment?

      I hope this helps.

      – Wally

  101. Naj says

    Hi there,I’m just wondering if you could please help? My son’s turning 23 this year and he’s ok the disability support pension he’s earning around $800-900 a fortnight he’s currently got a savings account amount is around 10 thousand i was wondering if he’s allowed to have that amount? Would be get in trouble and what should we do? Do we have to report it? Thank you.

    • Wally David says

      Thank you for your question, Naj.

      You should keep Centrelink updated, so that their records are accurate. If $10,000 in a bank account is your son’s only asset, with no other sources of income, his Disability Support Pension should not be affected.

      – Wally

  102. April Kidd says

    Hi Wally

    Just after some advise please regarding my mother pension. She has the following assets a home, $51,000 in shares, $113,250 in cash and she receives $315 per month from an English pension. What aged pension might she be entitled to. She is a widow. Thank you for your advice.

    • Wally David says

      Thank you for your question, April.

      A single pensioner with $51,000 in shares and $113,251 in a bank account, who receives $315 per month in British Pension, should be entitled to approximately $760 per fortnight in Age Pension.

      Please treat as a guide only and this assumes she has no other assets or sources of income.

      – Wally

  103. Oscar says

    I am currently on invalid pension and my wife on age pension. 3 years ago I was hit by a car while walking my dog on the pavement. I now am suing the driver and am expecting a lump sum of $100,000- $150,000. What is the best way to invest my money without being effected from centrelink. Thank You

    • Wally David says

      Thank you for your question, Oscar.

      I can only provide general advice on this forum, so I suggest you get some professional advice to point you in the right direction. Depending upon your age and circumstances, there may be options available to help retain your benefits.

      – Wally

  104. josephine silva says

    Hi and thank you for letting me enquire ….my husband recently passed away on 4th july 2014 and I have just received his super plus death benefit totalling 254,800…I am on a carers pension of approx 900$ per fortnight …..I am not able to get a mortgage but my 24 r old son wil be buying a house for
    us all to live in togeher with my other son who is on disability support pension …..I have also bought a car each for my two adult children $17,000 each ….how would this affect my carers pension? Thanku ….

    • Wally David says

      Thank you for your question, Josephine.

      It’s hard to comment too much without all the facts. You should notify Centrelink of the lump sum payment and where any money have been spent. The purchase of the cars will likely be treated as gifts and assessed accordingly. Depending upon your other assets and income, this may or may not impact your payment.

      I hope this helps.

      – Wally

  105. Lorraine Woods says

    Hi Wally

    Your site is very informative. Have a question, my sister wants to put half of her house in my name will this be costly to her or to me

    • Wally David says

      Thank you for your question, Lorraine.

      You would need to speak to a solicitor to confirm, though I imagine you would be up for stamp duty on any transfer.

      – Wally

  106. Carl says

    G’Day Wally,

    Excellent site. Just a quick one. My father is only 57 and has had enough of working. If he retires midway through next year he will have approx. $430k in his super fund but no other assets and no savings. He is heavily considering moving overseas and buying a unit to live in as he fears he will not have enough assets or cash to live in Australia for the rest of his days.

    My two questions to you are these;
    If he moves overseas to settle, but has worked his entire life in Australia, what entitlements could he still claim (if any)?
    AND
    If he stayed in Australia but retired next year all the same, would he be best to buy a property to reduce his bank account to under the $139k so it won’t bother his eligibility for full pension?

    Thanks in advance, Carl.

    • Wally David says

      Hi Carl,

      Thank you for your feedback and question.

      You can still claim the Age Pension whilst living abroad, though to qualify you must have reached your pension age.

      Centrelink do not assess the value of your principal home against the pension. Though there would be other factors to consider, besides this when deciding whether to buy a home or not.

      I recommend your father seeks some professional advice to assist him in making a decision.

      – Wally

  107. Ange says

    Hi Wally, does the “pension” in this article include parenting payment from centrelink? If not, can you roughly estimate how much of parenting payment would be effected with $75000 cash in bank.
    Thank you.

    • Wally David says

      Thank you for your question, Ange.

      For the assets test that applies to the Parenting Payment, please refer to the following page on the Department of Human Services website.

      You can use the Centrelink Rate Estimator to calculate your likely payment based on your specific circumstances. A link to this tool can be found in the ‘Resources’ page.

      – Wally

  108. Gay says

    Hi Wally. My husband and I receive the full pension. We would like to use some of our savings to do repairs on our house. Do we need to take receipts to Centrelink to prove the work has been done. Thanks Gay

    • Wally David says

      Thank you for your question, Gay.

      Generally, Centrelink do not request receipts for home repairs and maintenance. Though there is no harm in retaining these for your records, should the need arise to provide evidence.

      – Wally

  109. Jenny says

    Hi Wally, I want to help my daughter buy some land but don’t want to be penalised by Centrelink for gifting – can I put down the deposit and she and her partner pay off the land? Will it help if I my name goes on the mortgage document as well? The plan is that I will also have a home on part of the land as well in the future.

    I don’t have a lot of money (only $185K) and don’t think I should be penalised for wanting to help my family. I can’t afford to buy anything with it myself as I can’t get a loan as I am retired.

    How can I approach this?

    Thanks for your reply.

    Jenny

    • Wally David says

      Thank you for your question, Jenny.

      You can only gift up to $10,000 each financial year or up to a maximum of $30,000 over 5 years. By gifting more than $10,000 in one financial year, the excess amount is classed as a deprived asset. The deprived asset will continue to be assessed against your pension for a period of 5 years.

      If the funds that you plan to gift are already in your bank account, then there should be no change to your rate of pension. The main difference would be you would lose the bank interest that you would otherwise earn on the money.

      I hope this makes sense.

      – Wally

      • Jenny says

        Thanks Wally,

        I know the gifting laws but what I really want to do is to pay a deposit on some rural large acreage, about $85,000. As I can’t borrow any money my daughter would be paying off the land. If both our names go on the loan agreement, what does Centrelink consider this to be. A gift or me just buying some property?

        In the future I will also be able to live on a portion of the land.

        Can you please answer my question then in light of the above.

        Thanks
        Jenny

        • Wally David says

          Hi Jenny,

          It’s always tricky to comment on hypothetical situations. You can buy a property jointly with someone else, to become your principal place of residence. Though it really depends upon how you intend to structure what you doing.

          You can speak to Centrelink’s Financial Information Service (FIS) on 132 300 to check how your pension may be affected under different scenarios.

          – Wally

  110. christina says

    HI Wally

    Mum receives a full single pension and is going to sell her home which is valued @ $800k and wants to buy a townhouse valued @ $400k, she has $3k in the bank removing monies to pay ancillaries she may be left with $350k with no other investments or income in her bank account. How will this effect her pension? Is it wise to speak with a financial advisor? Does the bank notify Centrelink or is it mums responsibility to inform of the change

    • Wally David says

      Thank you for your question, Christina.

      With $350,000 in a bank account, your mother would receive a reduced pension. It is her responsibility to notify Centrelink within 14 days of any change.

      It would be a good idea to get some professional advice to discuss how to best use the funds leftover from the sale.

      I hope this helps.

      – Wally

  111. Lisa B says

    I hope I am in the right thread, as my question pertains to the DSP. I have been on DSP for many years due to ill health. My car, my savings & my furniture all probably equal about $10-$11 thousand in total. I am very careful with my money & I have recently been doing something akin to micro-loans to poor people in Africa. The program I am with should end up, in a few years (if i do not withdraw ANY money in the meantime) replacing & exceeding my DSP. Any money i gain from the program, i do not bother to bring to Oz, but just keep it in Africa & i put straight back in to help ever more poor people start a micro business. My question is this… do I only need to worry about Centrelink & tax when i actually start to withdraw money from Africa to Oz? Officially & legally speaking, (the program is compliant with the law to a high degree in that country) what I am doing is NOT classed as a loan, not shares, not partner, not equity. It is a new business model, called a ‘social business’ & does, actually, micro-franchises, not even micro-loans! I have not paid tax for many years & have no accountant. The social business will not give out any tax advice as laws vary from country to country. I don’t want to get in to trouble in Oz, but I do not want to pay tax or lose any benefit if I am not actually withdrawing any of the money i have made in Africa. Do I only need to pay tax when I withdraw from Africa to Oz please? thanks very much indeed :-)

    • Wally David says

      Thank you for your question, Lisa.

      It’s hard to comment too much, given your situation is quite unique. Ultimately, if your bank balance is changing by more than $2,000, technically you should be notifying Centrelink to update your payment. This is irrespective of where the money is coming from. It may or may not impact your rate of payment.

      The easiest thing to do is simply call Centrelink and the ATO, explain your situation and hopefully get some direction.

      – Wally

  112. gerald says

    Reading all your correspondence fired up my imagination and maybe it will invite other grateful readers to comment
    In my case I am contemplating buying a unit for less than 146k so assume that the amount will no longer be treated as an asset ,I will lose rent assistance and have to pay body corporate, rates etc
    but there’s no way with interest rates as they are that I can equal the 4% that I assume Centrelink is deeming me for. .As a 79 yr old single male I am even reluctant to buy and at my time of life most seniors would be doing the opposite.I have a few other funds which are achieving above 4 %.
    Lately I have been discussing my problem with other seniors and I ve been shocked
    Some had huge amounts in just savings accounts and were just using their atms
    Some were hoarding cash, many Southern Europeans don’t trust banks,they either invest in property or keep the money under the bed,hence the terrible and violent robberies that have occurred lately and even murder .The government even commented their concern on the amount of 100 dollar notes that are being hoarded blaming huge % on pensioners,and that it was even suggested taking 100 notes out of circulation
    With some of my neighbours earning 150,000 aud a year I feel best thing is to spend it all as it wont have any value at the rate half the population are widening the gap for us poor ole pensioners

  113. Natalie says

    Hi Wally,

    my dad wants to gift me $300 000 from his super. I understand this should not be taxable from my point of view but not sure about implications for him.

    He is 64 and retired with his own home and plans to apply for the pension at or around 65. Will there be any implications that he gifted this money, or will the pension only be calculated on the assets he holds once he applies?

    Thanks in advance,

    • Wally David says

      Thank you for your question, Natalie.

      You can only gift up to $10,000 each financial year or up to a maximum of $30,000 over 5 years. Gifting over these limits, will mean Centrelink assess the excess amount as a ‘deprived asset’. For example, you gift $50,000 in one financial year so $40,000 ($50,000 minus $10,000) is defined as a deprived asset. The deprived asset will continue to be counted as an asset and deemed under the income test against your pension for a period of 5 years. For more info, please see – How much can you gift?

      This is even in the case where you are not currently a pensioner. On the application for the Age Pension, it asks for the dates and amounts of any gifts during the previous 5 years.

      I hope this helps.

      – Wally

  114. Alex says

    Hi Wally, Slightly off topic with the pensioner. But how much can a full-time student have in their bank account to apply for youth allowance and/or healthcare card?

    Thank you

  115. Drew says

    Hi Wally

    If I borrow 124k from my mother and pay her 4.5% Intrest p/a payable monthly Will it affect her aged pension. She is a single lives in an aged care facility total assets are 170k cash. If she requires all or some of the loan amount back I can pay it back to her within 24hrs
    Thanks Drew

    • Wally David says

      Thank you for your question, Drew.

      Loans to family members are considered a ‘financial investment’ by Centrelink. This means they are assessed in the same way as a bank account. You can refer to Guide to Social Security Law for more information. Your mother will still need to inform Centrelink of the loan arrangement, even if there is no change to her payment rate.

      For a guide to lending to family, please refer to my related post – The dos and don’ts of lending money to family

      I hope this helps.

      – Wally

  116. adrian says

    hi wally my mum is going into aged care she has sold her home for $400 000,she has $20 000 to $30 000 in the bank bond for the aged care home is $300 000 will she still be entitled to a full pension as she has no other assests.How much can she have in the bank before her pension is affected cause after the bond is paid she will have about $130 000 in the bank

    • Wally David says

      Thank you for your question, Adrian.

      The accommodation bond or Refundable Accommodation Deposit, as it is now known, is exempt from the assets test for the pension. Please refer above for the amount a single pensioner can have in the bank before their payment is reduced.

      – Wally

  117. Helen Tyralik says

    Hi Wally, I have been receiving a part pension as my husband was still working. He is aged 63 in Dec and has finished up at work , we have $ 26,000 in our savings account and $ 14,000 in another account of which is $ 11,670 is lump sum from work. How much am I allowed in savings and what is my husband allowed as he will need to go to Centrelink . Do I put more of the money in a account in my name as he will probably have to go on Newstart till he reaches the age of 65 , hope you can help.

    • Wally David says

      Thank you for your question, Helen.

      For a couple, Centrelink assess your combined assets and income when calculating your entitlements. They will request the bank accounts and balances in each of your names.

      The asset and income limits are different for the Age Pension and Newstart Allowance. This makes it difficult to provide a set figure of what you can have in savings. The other complication is that Newstart has a number of waiting periods that may affect when payment starts. You can read more about these waiting periods, at the Department of Human Services website.

      The Centrelink Online Estimator may assist you working out what you may be entitled to, based on your circumstances. A link to this tool can be found in my ‘Resources’ page.

      – Wally

  118. Mel says

    Are these figures stated in the table above true for disability pensioners as well as aged pensioners? Myself and my two children have physical disabilities which require at times when treatments are needed placed strain on our limited income. So I diligently began to save up from my pension to help cover the costs of therapy and the specialists visits far from home and the costs that come with these visits such as travel and accommodation. I chose not to pay private health cover as it was far too expensive but to instead put ten dollars for each one of us into an interest earning account which we access when expenses arise. I received a sum of money which I declared to Centrelink that I also added to this account. I receive no other income except from Centrelink, however; the account is earning interest. Is there a threshold on the amount of interest earned before it affects disability pension? I simply cannot understand Centrelink’s income and assets when it comes to interest earning savings accounts. Thanks in advance

    • Wally David says

      Thank you for your question, Mel.

      The information can be confusing. The age of the person receiving the Disability Support Pension can impact the amount of allowable income.

      For more info, you can refer to the Department of Human Services website.

      When it comes to assessing income from your financial investments(e.g. bank account), the Government assumes that you will be earning a certain rate of return, regardless of the actual interest rate that you receive. This system is known as deeming. So you just need to report the balance of the bank account, and not the actual interest rate.

      I hope this helps.

      – Wally

  119. Bruno says

    Thank you in advance for your kindness. I am 67 and I am a disabled pensioner and my wife, 59 years of age and affected by sarcoidosis, receives a small financial benefit from Centrelink and work 8 hours a week. Our total pension income is about $ 1100 a fortnight and with her part time work she definitely does not reach the taxable threshold.
    I will shortly receive a private superannuation payment of $ 140,000, which will generate an annual interest of $ 4200. Will I have to pay any tax on it?

    • Wally David says

      Thank you for your question, Bruno.

      It’s impossible to say without knowing all the details of the payment. The super provider should be able to clarify whether any tax is payable or deducted.

      – Wally

  120. Benz says

    Hi Wally,
    Thank you for the very informative forum.

    My wife and I are both close to 65 and will rely on age pension after retirement. We don’t have mortgage with our house and have about $80,000 cash plus total around $200K in super.

    Since part of the house is self-contained (like a granny flat), we are thinking of 3 options:
    1) either rent out part of the house and live in the other to earn some income (agent estimated about $300 per week)
    2) rent out the whole house (for about $800 per week) but rent a small unit for about $400 per week
    3) Sell the house (estimated around $1 mil) and buy a unit for, say, $600K to cash in

    Just wondering how would the rental income affect our pension in cases 1 & 2? Do we get rental assistance in case 2?

    Would case 3 a better option?

    Thank you

    Benz

    • Wally David says

      Thank you for your question, Benz.

      The net rental income (less allowable deductions) would be assessed against the income test of the pension. For a guide on how extra income affects your pension, please see – How much can you earn before it affects your pension?

      Bear in mind, if you move out of your home into another residence and rent out your home, it would no longer be deemed your primary residence. Instead, it would be treated as an investment property with the value of the home also assessed as an asset. This may be an issue to consider with option 2).

      For rent assistance eligibility, please refer to the Department of Human Service website.

      I can only comment generally on this forum. You would need to seek professional advice to determine the most appropriate option for your situation.

      I hope this helps.

      – Wally

  121. Mary Bhalla says

    I am a New Zealand citizen and get my pension from NZ of $ 562.00 per fortnight and center link pays me $ 358.00 per fortnight. My rent which is a sharing is $ 510.00 fortnight. However my son who was sharing the rent has been transfered and I now have to pay the full rent of $ $1060.00 pf Would my pension increase? Whom should I contact?

    My son intends to invests $80000.00 in my name as a saving. will it affect my pension.
    I am 68 yrs and cannot work
    please advise

    • Wally David says

      Hi Mary,

      For rent assistance, if you are already receiving the maximum rate, then paying more rent won’t necessarily mean a higher payment.

      If your son invests $80,000 in your name, it will be counted as a financial asset against your pension.

      You can phone Centrelink to notify them of a change. If you don’t fancy the long hold times over the phone, there are other options to update your details, including:

      1) Fax your update to 1300 786 102

      2) Send via post to:

      Department of Human Services
      Reply Paid 7800
      Canberra BC
      ACT 2610

      Remember to write your CRN (customer reference number) at the top of the page and include any supporting documentation.

      I hope this helps.

      – Wally

  122. Jim Frost says

    Hi Wally,

    Great site, we are buying another house which will be our place of residence and will sell the old home, most of my money is tied up in super with a flexi pension, rather than take the money out of the super, to which I can not put back, we were thinking of a bridging loan to cover the sale until the old house is sold, now at this point in time we would own two houses and still have the same amount in my super, how would Centrelink look at this ?

    • Wally David says

      Thank you for your question and feedback, Jim.

      It’s a bit of a tricky situation. You will own two houses during this interim period. Your current home can remain your primary residence and exempt from the assets test. However the second property will effectively be treated as an investment property. For an investment property, Centrelink generally assesses the net value of the property against the assets test. By ‘net’ value, I mean the value of the property less any mortgage secured against it.

      So if the bridging loan is secured against the home that you are not residing (i.e. investment property), the net value should be used by Centrelink.

      On a separate note, you also need to be careful not to lose your Age Pension in the process, as this could affect the grandfathering on your super pensions come 1 January 2015. For more info, please see – Deeming Changes 2015 – Centrelink Treatment of Account Based Pensions

      I recommend you seek professional advice beforehand to estimate the impact on entitlements, and advise on an appropriate course of action.

      – Wally

  123. KS says

    My husband has an investment loan and an offset acct linked to it, both in his name. I want to start either making regular monthly payments into the offset account or depositing my whole salary into it so I can help reduce the interest he’s paying. Would this be legal and what implications will this have on his investment and more importantly on lodging his tax for his investment business? My salary will simply be there in that account instead of sitting around on the other (mine) as it currently does. My opinion is that does not matter but we need to be really sure before we do anything in this direction.
    Thank you in advance.

    • Wally David says

      Thank you for your question, KS.

      It’s difficult to say without knowing all the facts, including what structure the investment and loan are held. I suggest you obtain professional taxation advice for clarification.

      – Wally

  124. Michael Marris says

    we have combined super of $700.000 . if appling for a pension is there a set amount we must take from super each month . house value approx. $400.000 – cars and caravan – $100.000. Money in bank accounts $120.000 would we be eligble for part pension

    • Wally David says

      Thank you for your question, Michael.

      Once you start an income stream with your super (e.g. account-based pension), there is a minimum pension income that you must draw each year. This is set down by the government, and the figure is dependant upon your age.

      For instance, a 65 year old must draw 5% of their account balance to meet this minimum requirement. For more info, you can refer to the Australian Tax Office website.

      A pensioner couple who own their home, can have around another $1,145,000 in assets and potentially still qualify for a part-pension. Remembering that the value of your primary residence is normally exempt from the assets test. There is also the income test to consider. For a guide, please refer to the following useful posts:

      How much can a pensioner have in assets before affecting their payment?

      How much can you earn before it affects your pension?

      I hope this helps.

      – Wally

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