The Age Pension: 5 things you need to know

The Age Pension: 5 things you need to know

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We’re living longer, more active, healthier lives. Ample investment in medical, pharmaceutical and bio-technology related research have got us here. We owe it to ourselves to make the most of the benefits gained. This means maximising opportunities to fund the decades ahead. A mindboggling array of retirement funding options lie in wait for you to navigate. Don’t try and tackle this alone. Invest in professional advice from a financial specialist with expertise in retirement planning.

To get you started on some thinking before you meet with a financial planner, here are five things you need to know about one of the income streams that may be available to you – the Age Pension. The Age Pension provides income support and a range of concessions for eligible older Australians.

1.     Seek professional advice

If you’re exploring Centrelink payment options as an income stream, seek professional financial advice early so you can start planning.

Visit the Australian Government’s Department of Human Services website for the most up to date information and explore payment options from Centrelink that you may be eligible for.

2.     You need to meet defined eligibility criteria

There are several criteria you need to meet to qualify for a partial or full Age Pension. There are age requirements (roughly over 65 in 2014); residency requirements; falling between lower and upper limits of an income test; and an assets test. If you plan to travel overseas for lengthy periods, you’ll need to check in with Centrelink on what this means for Age Pension payments.

3.     Payment basics

If eligible, the base rate of the partial or full Age Pension payment is paid fortnightly. It’s either paid as a single payment, a combined couple’s payment or a couple’s payment paid separately to each of you if you’re separated due to ill health. In special circumstances weekly payments might be arranged. The rate of the Age Pension is adjusted twice a year, March and then September.

You may also qualify for a pension supplement or rent assistance. A clean energy advance supplement is also paid to eligible older Australians. Beyond the Age Pension there are a number of other Centrelink payments available to seniors and over 65s.

4.     It is income and asset tested

Entitlement for a partial or full Age Pension is based on results of an asset test and an income test. This is where retirement income stream planning can get complicated. Seek professional financial advice to help work through this.

5.     Links to helpful Age Pension information

This information is only scraping the surface of the basics of the Age Pension. Ask around to find a well-respected, independent financial planner who is known for offering good advice in retirement finance planning.

Here is a list of useful online resources about the Age Pension to prepare you for a conversation with a financial planner:

Age Pension and your retirement

Older Australians

Payment Finder

National Information Centre on Retirement Investments (NICRI)

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