If you’re one of the many Aussies who just miss out on being eligible for the aged pension due to being slightly over the asset-test requirements, you may have considered whether or not you should reduce your assets to become eligible for the pension or increase your payments. After all, with the increasing cost of living what helps the most is cash, not necessarily assets, right?

This week, a financial advice column sparked nationwide interest in this topic. Why? A couple with nearly $1 million in assets wrote in hoping to receive the age pension.

The original question is as follows:
‘My wife is 84 and I am 82. Our combined total assets of bank accounts and superannuation are $998,500. We do not receive any Centrelink benefits but would obviously like to receive some aged pension. We own our own home. Any suggestions?’

How can you get the most out of your money? Image Credit: Shutterstock

Sydney Morning Herald columnist, Noel Whittaker, for his part, offered in-depth advice. Whittaker is the author of Retirement Made Simple and numerous other books on personal finance.

While social media was largely in an uproar over the column, it does raise the question: should you ever reduce your assets to become eligible for the age pension or to increase your payments?

We know that getting used to the ins and outs of the pension can be tricky so let’s investigate.

If you’re looking to finalise your pension eligibility, there’s one thing you should know - the cut-off point for the assets test is $935,000 (for a homeowning couple seeking a part pension). That includes both financial investments such as money in the bank and superannuation, as well as items such as furniture and vehicles (which should be valued at the amount shown by Red Book).

It’s interesting to note that, in most cases, your home does not count towards your asset test. You must be living in the residence and there are land size restrictions but this is a significant benefit for homeowning seniors.

We’ve included the other cut-offs for part pension eligibility below:

It may not be worth reducing your assets to receive the pension. Image Credit: Services Australia

If you receive Rent Assistance with your pension, your cut-off point may be higher.

If your assets are above the cut-off, you may be able to reduce your assets to become eligible for the pension or increase your payments, but is it really worth it?

In this example, a considerable reduction of $100,000 to their asset base would yield an annual pension of $7800, presenting a disheartening return on investment considering it would take almost 13 years to recoup the sum. Moreover, inflation and other market-related losses can adversely affect one’s income. This makes the financial decision a rather daunting prospect.

Although it could appear as a wise decision in the immediate term, it is essential to take into account long-term implications.

Other ways to restructure assets include:

‘Gifts’

You could make small annual gifts of up to $10,000 a year (max of $30,000 over 5 years) to reduce total assets, though it likely won’t be enough to help qualify for the pension. (Not in this example, at least.)

You should also note that, regarding ‘Gifts’, Services Australia states, ‘If you give away your income or assets, they may still count towards your income and assets tests. This also applies if you sell them for less than they’re worth.’

So, basically, they’re watching for any funny business.

Income streams

There are also certain income stream products (lifetime annuities) where only 60 per cent of the money counts towards the asset test. But even then, this couple would have to invest around $300,000 just to reduce their assessable assets by $120,000.

Not to mention, this drops to a minimum of 30% when you reach your 84th birthday or a minimum of 5 years from the asset assessment day.

Home renovations or upsizing

Since owner-occupied homes do not contribute to the asset test, you could choose to upsize and purchase a more expensive home. Alternatively, you could also complete renovations on your existing property.

Now, you might already be receiving pension payments but the same applies; the fewer the assets, the greater the age pension payment. While that may sound great, let’s look at the bigger picture.

For every $10,000 of assets above the allowable threshold, your pension rate reduces by $780 per year for individuals or $390 per year each for a couple ($3 a fortnight for every $1000 over asset cut-off). At the end of the day, $10,000 is always worth more than $780.

So is it worth it? While we’re not qualified financial advisors, it’s certainly not something to jump into without ample prior research and Sydney Morning Herald columnist and personal finance author Noel Whittaker came to the same conclusion. Careful restructuring of assets may be advantageous to a small group already on the age pension and looking to increase their payments, however, that will not be the case for everyone.

Everyone's financial position is different, so it's important to discuss with a professional to determine if the financial steps needed to become eligible for the pension are worth it. This list is not exhaustive and should not be considered financial advice.

Seniors, while this is not what you may have been hoping to hear, there are still other options out there.

Sample of the Commonwealth Seniors Health Card. Image source: Services Australia.

If you’re looking for more financial security, then you may be eligible for the Commonwealth Seniors Health Card. This can offer you some of the same concessions and benefits as the pension does, depending on your state or territory, and also has much looser eligibility criteria.

If you’re a pensioner, partially, or fully self-funded retiree, we recently wrote about the Government cards you can get to assist with specific expenses. You can read more here.

Bottom line, members? Before you decide to dip into your savings to reduce your assets and become eligible for the pension or increase your pension payments, look into all of your options and do the maths, so you can make an informed decision.

Do you have experience with this? Let us know in the comments below!

 

[LaniK]

Good on this couple for saving and managing to have that amount of savings. People may say this couple dont need the pension etc however we should remember that they more than likely would have paid a lot of tax in their life time to save or be in possession of that amount of savings. What gets me riled is that people who have never worked a day in their life can go and apply for and receive a full dole payment to the point now that a lot of them never work at all and then receive the pension when they get to the relevant age. Meanwhile they get rent assistance, hardship - what ever they want. We worked until we were 65 and 70 and when it came time to apply for the part pension, the hoops that we had to jump through for 5 months before we received a cent was mind blowing. (they did back pay us). Luckily we had saved money to get by during this 5 months.At least seniors of any age or how much money they have should at least be entitled to some benefit. When someone who has never paid a cent in taxes gets more than a person who has worked 50 years plus and paid big taxes, or the veteran who served our country it screams that something is horribly wrong with the whole system. For one though, if I never needed the pension to help in these days of high cost of living, I would gladly give it up.

 

[Suzanne rose]

Good on this couple for saving and managing to have that amount of savings. People may say this couple dont need the pension etc however we should remember that they more than likely would have paid a lot of tax in their life time to save or be in possession of that amount of savings. What gets me riled is that people who have never worked a day in their life can go and apply for and receive a full dole payment to the point now that a lot of them never work at all and then receive the pension when they get to the relevant age. Meanwhile they get rent assistance, hardship - what ever they want. We worked until we were 65 and 70 and when it came time to apply for the part pension, the hoops that we had to jump through for 5 months before we received a cent was mind blowing. (they did back pay us). Luckily we had saved money to get by during this 5 months.At least seniors of any age or how much money they have should at least be entitled to some benefit. When someone who has never paid a cent in taxes gets more than a person who has worked 50 years plus and paid big taxes, or the veteran who served our country it screams that something is horribly wrong with the whole system. For one though, if I never needed the pension to help in these days of high cost of living, I would gladly give it up.

I worked all my life even after having 13 kids I worked around them , later in life when my husband became very sick I then became the bread winner .
I would often say it's not fair that our taxes are paying for dole bludgers,

Late 2019 I had surgery a common operation that went horribly wrong that has thrown me into a living nightmare, I had to give up a job that I loved and go on jobseeker which I give in a DRs certificate every 12 weeks . I am lucky I own my house but it is so hard living on $300 aweek . I now realise most people would not want to live this way or would live this way.
I don't think there is as many dole bludgers out there as what people think, it's impossible to live on.

I'm applying for disability pension I'm 61 , hubby is 64 and has never received centrelink.
This is not the way I wanted to retire and it feels pretty derogatory being on jobseeker

 

[Sinikka Pollari]

Good on this couple for saving and managing to have that amount of savings. People may say this couple dont need the pension etc however we should remember that they more than likely would have paid a lot of tax in their life time to save or be in possession of that amount of savings. What gets me riled is that people who have never worked a day in their life can go and apply for and receive a full dole payment to the point now that a lot of them never work at all and then receive the pension when they get to the relevant age. Meanwhile they get rent assistance, hardship - what ever they want. We worked until we were 65 and 70 and when it came time to apply for the part pension, the hoops that we had to jump through for 5 months before we received a cent was mind blowing. (they did back pay us). Luckily we had saved money to get by during this 5 months.At least seniors of any age or how much money they have should at least be entitled to some benefit. When someone who has never paid a cent in taxes gets more than a person who has worked 50 years plus and paid big taxes, or the veteran who served our country it screams that something is horribly wrong with the whole system. For one though, if I never needed the pension to help in these days of high cost of living, I would gladly give it up.

You are so right we have worked all our lives paid huge taxes and today I don't qualify for any benefits and never will specially as my property is more than 5 acres no productive land only hills.

 

[guymarius58]

If you’re one of the many Aussies who just miss out on being eligible for the aged pension due to being slightly over the asset-test requirements, you may have considered whether or not you should reduce your assets to become eligible for the pension or increase your payments. After all, with the increasing cost of living what helps the most is cash, not necessarily assets, right?

This week, a financial advice column sparked nationwide interest in this topic. Why? A couple with nearly $1 million in assets wrote in hoping to receive the age pension.

The original question is as follows:
‘My wife is 84 and I am 82. Our combined total assets of bank accounts and superannuation are $998,500. We do not receive any Centrelink benefits but would obviously like to receive some aged pension. We own our own home. Any suggestions?’

View attachment 11988

How can you get the most out of your money? Image Credit: Shutterstock

Sydney Morning Herald columnist, Noel Whittaker, for his part, offered in-depth advice. Whittaker is the author of Retirement Made Simple and numerous other books on personal finance.

While social media was largely in an uproar over the column, it does raise the question: should you ever reduce your assets to become eligible for the age pension or to increase your payments?

We know that getting used to the ins and outs of the pension can be tricky so let’s investigate.

If you’re looking to finalise your pension eligibility, there’s one thing you should know - the cut-off point for the assets test is $935,000 (for a homeowning couple seeking a part pension). That includes both financial investments such as money in the bank and superannuation, as well as items such as furniture and vehicles (which should be valued at the amount shown by Red Book).

It’s interesting to note that, in most cases, your home does not count towards your asset test. You must be living in the residence and there are land size restrictions but this is a significant benefit for homeowning seniors.

We’ve included the other cut-offs for part pension eligibility below:

View attachment 11986

It may not be worth reducing your assets to receive the pension. Image Credit: Services Australia

If you receive Rent Assistance with your pension, your cut-off point may be higher.

If your assets are above the cut-off, you may be able to reduce your assets to become eligible for the pension or increase your payments, but is it really worth it?

In this example, a considerable reduction of $100,000 to their asset base would yield an annual pension of $7800, presenting a disheartening return on investment considering it would take almost 13 years to recoup the sum. Moreover, inflation and other market-related losses can adversely affect one’s income. This makes the financial decision a rather daunting prospect.

Although it could appear as a wise decision in the immediate term, it is essential to take into account long-term implications.

Other ways to restructure assets include:

‘Gifts’

You could make small annual gifts of up to $10,000 a year (max of $30,000 over 5 years) to reduce total assets, though it likely won’t be enough to help qualify for the pension. (Not in this example, at least.)

You should also note that, regarding ‘Gifts’, Services Australia states, ‘If you give away your income or assets, they may still count towards your income and assets tests. This also applies if you sell them for less than they’re worth.’

So, basically, they’re watching for any funny business.

Income streams

There are also certain income stream products (lifetime annuities) where only 60 per cent of the money counts towards the asset test. But even then, this couple would have to invest around $300,000 just to reduce their assessable assets by $120,000.

Not to mention, this drops to a minimum of 30% when you reach your 84th birthday or a minimum of 5 years from the asset assessment day.

Home renovations or upsizing

Since owner-occupied homes do not contribute to the asset test, you could choose to upsize and purchase a more expensive home. Alternatively, you could also complete renovations on your existing property.

Now, you might already be receiving pension payments but the same applies; the fewer the assets, the greater the age pension payment. While that may sound great, let’s look at the bigger picture.

For every $10,000 of assets above the allowable threshold, your pension rate reduces by $780 per year for individuals or $390 per year each for a couple ($3 a fortnight for every $1000 over asset cut-off). At the end of the day, $10,000 is always worth more than $780.

So is it worth it? While we’re not qualified financial advisors, it’s certainly not something to jump into without ample prior research and Sydney Morning Herald columnist and personal finance author Noel Whittaker came to the same conclusion. Careful restructuring of assets may be advantageous to a small group already on the age pension and looking to increase their payments, however, that will not be the case for everyone.

Everyone's financial position is different, so it's important to discuss with a professional to determine if the financial steps needed to become eligible for the pension are worth it. This list is not exhaustive and should not be considered financial advice.

Seniors, while this is not what you may have been hoping to hear, there are still other options out there.

View attachment 11987

Sample of the Commonwealth Seniors Health Card. Image source: Services Australia.

If you’re looking for more financial security, then you may be eligible for the Commonwealth Seniors Health Card. This can offer you some of the same concessions and benefits as the pension does, depending on your state or territory, and also has much looser eligibility criteria.

If you’re a pensioner, partially, or fully self-funded retiree, we recently wrote about the Government cards you can get to assist with specific expenses. You can read more here.

Bottom line, members? Before you decide to dip into your savings to reduce your assets and become eligible for the pension or increase your pension payments, look into all of your options and do the maths, so you can make an informed decision.

Do you have experience with this? Let us know in the comments below!

I'm 62 now and worked all my life. Last year I was forced to stop work because of a bad back and severe arthritis. I've started a course at Tafe for six months in the hope of finding a suitable job to get by. I've been told I can get a student allowance of $49 a week only, because my partner has a small savings over $10,000 and earns just over $820 week after tax. This is all I've got to live on, and I find it hard to understand why a couple are complaining about having over $900,000 and not being able to get the pension. If they want to swap with my position, I'll gladly make the swap, as I wouldn't have anything to worry about. People really need to face reality here.

 

[Macarj]

Good on this couple for saving and managing to have that amount of savings. People may say this couple dont need the pension etc however we should remember that they more than likely would have paid a lot of tax in their life time to save or be in possession of that amount of savings. What gets me riled is that people who have never worked a day in their life can go and apply for and receive a full dole payment to the point now that a lot of them never work at all and then receive the pension when they get to the relevant age. Meanwhile they get rent assistance, hardship - what ever they want. We worked until we were 65 and 70 and when it came time to apply for the part pension, the hoops that we had to jump through for 5 months before we received a cent was mind blowing. (they did back pay us). Luckily we had saved money to get by during this 5 months.At least seniors of any age or how much money they have should at least be entitled to some benefit. When someone who has never paid a cent in taxes gets more than a person who has worked 50 years plus and paid big taxes, or the veteran who served our country it screams that something is horribly wrong with the whole system. For one though, if I never needed the pension to help in these days of high cost of living, I would gladly give it up.

So very right what you have written I was almost in the same position Paid massive taxes for 50 years then your hit again when you retire someone who's pissed their money away are given full pension

 

[margaretritchie48@hotmail]

Good on this couple for saving and managing to have that amount of savings. People may say this couple dont need the pension etc however we should remember that they more than likely would have paid a lot of tax in their life time to save or be in possession of that amount of savings. What gets me riled is that people who have never worked a day in their life can go and apply for and receive a full dole payment to the point now that a lot of them never work at all and then receive the pension when they get to the relevant age. Meanwhile they get rent assistance, hardship - what ever they want. We worked until we were 65 and 70 and when it came time to apply for the part pension, the hoops that we had to jump through for 5 months before we received a cent was mind blowing. (they did back pay us). Luckily we had saved money to get by during this 5 months.At least seniors of any age or how much money they have should at least be entitled to some benefit. When someone who has never paid a cent in taxes gets more than a person who has worked 50 years plus and paid big taxes, or the veteran who served our country it screams that something is horribly wrong with the whole system. For one though, if I never needed the pension to help in these days of high cost of living, I would gladly give it up.

Could not agree more.

 

[Cheezil]

Good on this couple for saving and managing to have that amount of savings. People may say this couple dont need the pension etc however we should remember that they more than likely would have paid a lot of tax in their life time to save or be in possession of that amount of savings. What gets me riled is that people who have never worked a day in their life can go and apply for and receive a full dole payment to the point now that a lot of them never work at all and then receive the pension when they get to the relevant age. Meanwhile they get rent assistance, hardship - what ever they want. We worked until we were 65 and 70 and when it came time to apply for the part pension, the hoops that we had to jump through for 5 months before we received a cent was mind blowing. (they did back pay us). Luckily we had saved money to get by during this 5 months.At least seniors of any age or how much money they have should at least be entitled to some benefit. When someone who has never paid a cent in taxes gets more than a person who has worked 50 years plus and paid big taxes, or the veteran who served our country it screams that something is horribly wrong with the whole system. For one though, if I never needed the pension to help in these days of high cost of living, I would gladly give it up.

So well worded, agree 100% - something is horribly wrong here & it is sooo sad!
Can also bet the ones jumping up & down about this couple would be in that group who havent worked & paid taxes all their lives as well

 

[Plastic Druid]

I was self-employed when I retired. Because I did not have a 'job' Centrelink could not figure out what to do about my pension. It took them 11 months to establish that I was actually entitled to a small pension and all that time I had to live off my savings. The case was obviously 'too hard' and was shuffled around to different departments. Nobody wanted to deal with it until one very lovely and helpful lady decided to fix it. I am eternally grateful to her. She sorted the whole mess out in a few days and I got my small pension almost immediately. Personally, I don't resent the fact that my pension represents a minute fraction of what I paid over the years in tax. We need to care for people who need help because that's what a civilised society does.

 

[Lynjw]

If you’re one of the many Aussies who just miss out on being eligible for the aged pension due to being slightly over the asset-test requirements, you may have considered whether or not you should reduce your assets to become eligible for the pension or increase your payments. After all, with the increasing cost of living what helps the most is cash, not necessarily assets, right?

This week, a financial advice column sparked nationwide interest in this topic. Why? A couple with nearly $1 million in assets wrote in hoping to receive the age pension.

The original question is as follows:
‘My wife is 84 and I am 82. Our combined total assets of bank accounts and superannuation are $998,500. We do not receive any Centrelink benefits but would obviously like to receive some aged pension. We own our own home. Any suggestions?’

View attachment 11988

How can you get the most out of your money? Image Credit: Shutterstock

Sydney Morning Herald columnist, Noel Whittaker, for his part, offered in-depth advice. Whittaker is the author of Retirement Made Simple and numerous other books on personal finance.

While social media was largely in an uproar over the column, it does raise the question: should you ever reduce your assets to become eligible for the age pension or to increase your payments?

We know that getting used to the ins and outs of the pension can be tricky so let’s investigate.

If you’re looking to finalise your pension eligibility, there’s one thing you should know - the cut-off point for the assets test is $935,000 (for a homeowning couple seeking a part pension). That includes both financial investments such as money in the bank and superannuation, as well as items such as furniture and vehicles (which should be valued at the amount shown by Red Book).

It’s interesting to note that, in most cases, your home does not count towards your asset test. You must be living in the residence and there are land size restrictions but this is a significant benefit for homeowning seniors.

We’ve included the other cut-offs for part pension eligibility below:

View attachment 11986

It may not be worth reducing your assets to receive the pension. Image Credit: Services Australia

If you receive Rent Assistance with your pension, your cut-off point may be higher.

If your assets are above the cut-off, you may be able to reduce your assets to become eligible for the pension or increase your payments, but is it really worth it?

In this example, a considerable reduction of $100,000 to their asset base would yield an annual pension of $7800, presenting a disheartening return on investment considering it would take almost 13 years to recoup the sum. Moreover, inflation and other market-related losses can adversely affect one’s income. This makes the financial decision a rather daunting prospect.

Although it could appear as a wise decision in the immediate term, it is essential to take into account long-term implications.

Other ways to restructure assets include:

‘Gifts’

You could make small annual gifts of up to $10,000 a year (max of $30,000 over 5 years) to reduce total assets, though it likely won’t be enough to help qualify for the pension. (Not in this example, at least.)

You should also note that, regarding ‘Gifts’, Services Australia states, ‘If you give away your income or assets, they may still count towards your income and assets tests. This also applies if you sell them for less than they’re worth.’

So, basically, they’re watching for any funny business.

Income streams

There are also certain income stream products (lifetime annuities) where only 60 per cent of the money counts towards the asset test. But even then, this couple would have to invest around $300,000 just to reduce their assessable assets by $120,000.

Not to mention, this drops to a minimum of 30% when you reach your 84th birthday or a minimum of 5 years from the asset assessment day.

Home renovations or upsizing

Since owner-occupied homes do not contribute to the asset test, you could choose to upsize and purchase a more expensive home. Alternatively, you could also complete renovations on your existing property.

Now, you might already be receiving pension payments but the same applies; the fewer the assets, the greater the age pension payment. While that may sound great, let’s look at the bigger picture.

For every $10,000 of assets above the allowable threshold, your pension rate reduces by $780 per year for individuals or $390 per year each for a couple ($3 a fortnight for every $1000 over asset cut-off). At the end of the day, $10,000 is always worth more than $780.

So is it worth it? While we’re not qualified financial advisors, it’s certainly not something to jump into without ample prior research and Sydney Morning Herald columnist and personal finance author Noel Whittaker came to the same conclusion. Careful restructuring of assets may be advantageous to a small group already on the age pension and looking to increase their payments, however, that will not be the case for everyone.

Everyone's financial position is different, so it's important to discuss with a professional to determine if the financial steps needed to become eligible for the pension are worth it. This list is not exhaustive and should not be considered financial advice.

Seniors, while this is not what you may have been hoping to hear, there are still other options out there.

View attachment 11987

Sample of the Commonwealth Seniors Health Card. Image source: Services Australia.

If you’re looking for more financial security, then you may be eligible for the Commonwealth Seniors Health Card. This can offer you some of the same concessions and benefits as the pension does, depending on your state or territory, and also has much looser eligibility criteria.

If you’re a pensioner, partially, or fully self-funded retiree, we recently wrote about the Government cards you can get to assist with specific expenses. You can read more here.

Bottom line, members? Before you decide to dip into your savings to reduce your assets and become eligible for the pension or increase your pension payments, look into all of your options and do the maths, so you can make an informed decision.

Do you have experience with this? Let us know in the comments below!

Honestly if I was over 80 with over $950,000 I would feel lucky and not be greedy in wanting a pension. There r a lot of people struggling on the merge pension. Govt funds are stretched and should be targeted more towards those who need it most and not
Given to those who have plenty but still want to live in luxury. The rich should be grateful and be happy for the govt to help those in need. Unfortunately that is not the case. It’s sad but true.

 

[Riorita]

If you’re one of the many Aussies who just miss out on being eligible for the aged pension due to being slightly over the asset-test requirements, you may have considered whether or not you should reduce your assets to become eligible for the pension or increase your payments. After all, with the increasing cost of living what helps the most is cash, not necessarily assets, right?

This week, a financial advice column sparked nationwide interest in this topic. Why? A couple with nearly $1 million in assets wrote in hoping to receive the age pension.

The original question is as follows:
‘My wife is 84 and I am 82. Our combined total assets of bank accounts and superannuation are $998,500. We do not receive any Centrelink benefits but would obviously like to receive some aged pension. We own our own home. Any suggestions?’

View attachment 11988

How can you get the most out of your money? Image Credit: Shutterstock

Sydney Morning Herald columnist, Noel Whittaker, for his part, offered in-depth advice. Whittaker is the author of Retirement Made Simple and numerous other books on personal finance.

While social media was largely in an uproar over the column, it does raise the question: should you ever reduce your assets to become eligible for the age pension or to increase your payments?

We know that getting used to the ins and outs of the pension can be tricky so let’s investigate.

If you’re looking to finalise your pension eligibility, there’s one thing you should know - the cut-off point for the assets test is $935,000 (for a homeowning couple seeking a part pension). That includes both financial investments such as money in the bank and superannuation, as well as items such as furniture and vehicles (which should be valued at the amount shown by Red Book).

It’s interesting to note that, in most cases, your home does not count towards your asset test. You must be living in the residence and there are land size restrictions but this is a significant benefit for homeowning seniors.

We’ve included the other cut-offs for part pension eligibility below:

View attachment 11986

It may not be worth reducing your assets to receive the pension. Image Credit: Services Australia

If you receive Rent Assistance with your pension, your cut-off point may be higher.

If your assets are above the cut-off, you may be able to reduce your assets to become eligible for the pension or increase your payments, but is it really worth it?

In this example, a considerable reduction of $100,000 to their asset base would yield an annual pension of $7800, presenting a disheartening return on investment considering it would take almost 13 years to recoup the sum. Moreover, inflation and other market-related losses can adversely affect one’s income. This makes the financial decision a rather daunting prospect.

Although it could appear as a wise decision in the immediate term, it is essential to take into account long-term implications.

Other ways to restructure assets include:

‘Gifts’

You could make small annual gifts of up to $10,000 a year (max of $30,000 over 5 years) to reduce total assets, though it likely won’t be enough to help qualify for the pension. (Not in this example, at least.)

You should also note that, regarding ‘Gifts’, Services Australia states, ‘If you give away your income or assets, they may still count towards your income and assets tests. This also applies if you sell them for less than they’re worth.’

So, basically, they’re watching for any funny business.

Income streams

There are also certain income stream products (lifetime annuities) where only 60 per cent of the money counts towards the asset test. But even then, this couple would have to invest around $300,000 just to reduce their assessable assets by $120,000.

Not to mention, this drops to a minimum of 30% when you reach your 84th birthday or a minimum of 5 years from the asset assessment day.

Home renovations or upsizing

Since owner-occupied homes do not contribute to the asset test, you could choose to upsize and purchase a more expensive home. Alternatively, you could also complete renovations on your existing property.

Now, you might already be receiving pension payments but the same applies; the fewer the assets, the greater the age pension payment. While that may sound great, let’s look at the bigger picture.

For every $10,000 of assets above the allowable threshold, your pension rate reduces by $780 per year for individuals or $390 per year each for a couple ($3 a fortnight for every $1000 over asset cut-off). At the end of the day, $10,000 is always worth more than $780.

So is it worth it? While we’re not qualified financial advisors, it’s certainly not something to jump into without ample prior research and Sydney Morning Herald columnist and personal finance author Noel Whittaker came to the same conclusion. Careful restructuring of assets may be advantageous to a small group already on the age pension and looking to increase their payments, however, that will not be the case for everyone.

Everyone's financial position is different, so it's important to discuss with a professional to determine if the financial steps needed to become eligible for the pension are worth it. This list is not exhaustive and should not be considered financial advice.

Seniors, while this is not what you may have been hoping to hear, there are still other options out there.

View attachment 11987

Sample of the Commonwealth Seniors Health Card. Image source: Services Australia.

If you’re looking for more financial security, then you may be eligible for the Commonwealth Seniors Health Card. This can offer you some of the same concessions and benefits as the pension does, depending on your state or territory, and also has much looser eligibility criteria.

If you’re a pensioner, partially, or fully self-funded retiree, we recently wrote about the Government cards you can get to assist with specific expenses. You can read more here.

Bottom line, members? Before you decide to dip into your savings to reduce your assets and become eligible for the pension or increase your pension payments, look into all of your options and do the maths, so you can make an informed decision.

Do you have experience with this? Let us know in the comments below!

I would seek a good financial advisor....no messing around ...getting best return on my $$$

 

[LH2022]

LUCKY???!!! Luck has NOTHING to do with it. Like others, I've worked my whole life, paying massive taxes and scrimping and saving for the future because I'm on my own. I didn't laze about collecting the dole or have kids (or heaps of kids) to collect payments. I didn't smoke or drink my money away or take vacations or fritter money away EVER. So my toil and conscientious saving my entire life now means I deserve nothing from the pension. Don't EVER say someone is LUCKY to have savings. They were responsible, worked hard and long and were not the ever present dole bludgers who seem proud of their lifetime of bludging on the system. Oh yes, the bludgers know how to 'work' the system and get their free money for doing absolutely nothing. Seriously, what ridiculous uninformed statements you have made. Shame on you. And your statement that the 'rich' should be grateful for the government helping those in need. Wake up and realise the money the bludgers get came right out of my pocket and other's pockets like mine. Why should those who feel the world owes them and sit around forever feeling entitled get ANY payments? Get up off your arse and go to work. Support yourself instead of thinking the world owes you anything. Be an adult instead of a bludger. There are genuinely needy people who are disabled and there are the ones who are genuinely battling to get a job every day. They are the ones who need payments, NOT the bludgers. The bludgers teach their kids that the world owes them and that's shameful. Generations of bludgers. THAT is not a good claim to fame. A lifetime of taking and whinging about the free money they get to boot. Australia is a country of giving out free money to those who don't deserve it. Makes me sick.

Honestly if I was over 80 with over $950,000 I would feel lucky and not be greedy in wanting a pension. There r a lot of people struggling on the merge pension. Govt funds are stretched and should be targeted more towards those who need it most and not
Given to those who have plenty but still want to live in luxury. The rich should be grateful and be happy for the govt to help those in need. Unfortunately that is not the case. It’s sad but true.

Honestly if I was over 80 with over $950,000 I would feel lucky and not be greedy in wanting a pension. There r a lot of people struggling on the merge pension. Govt funds are stretched and should be targeted more towards those who need it most and not
Given to those who have plenty but still want to live in luxury. The rich should be grateful and be happy for the govt to help those in need. Unfortunately that is not the

 

[springburn]

I'm one of those fortunate self-funded retirees who is a bit above the cut-off limit for a part pension. That's fine - I accept that but I would have thought it would be reasonable for Centrelink to at issue me with a Pension Card so I could at least enjoy the same benefits that Pensioners receive. Such as free car registration and reduced Council rates etc. Admittedly I have only worked since I was 16 and retired when I was 68. Paid taxes, started two companies, employed staff who paid taxes, made profits and paid company taxes - part of which may have helped provide benefits for the professionally unemployed (and unemployable) members of our community. But I no complain.

 

[margaretritchie48@hotmail]

LUCKY???!!! Luck has NOTHING to do with it. Like others, I've worked my whole life, paying massive taxes and scrimping and saving for the future because I'm on my own. I didn't laze about collecting the dole or have kids (or heaps of kids) to collect payments. I didn't smoke or drink my money away or take vacations or fritter money away EVER. So my toil and conscientious saving my entire life now means I deserve nothing from the pension. Don't EVER say someone is LUCKY to have savings. They were responsible, worked hard and long and were not the ever present dole bludgers who seem proud of their lifetime of bludging on the system. Oh yes, the bludgers know how to 'work' the system and get their free money for doing absolutely nothing. Seriously, what ridiculous uninformed statements you have made. Shame on you. And your statement that the 'rich' should be grateful for the government helping those in need. Wake up and realise the money the bludgers get came right out of my pocket and other's pockets like mine. Why should those who feel the world owes them and sit around forever feeling entitled get ANY payments? Get up off your arse and go to work. Support yourself instead of thinking the world owes you anything. Be an adult instead of a bludger. There are genuinely needy people who are disabled and there are the ones who are genuinely battling to get a job every day. They are the ones who need payments, NOT the bludgers. The bludgers teach their kids that the world owes them and that's shameful. Generations of bludgers. THAT is not a good claim to fame. A lifetime of taking and whinging about the free money they get to boot. Australia is a country of giving out free money to those who don't deserve it. Makes me sick.

Agree with everything you say. I have a son and daughter in law that work their butts off for the lazy people out there. I have worked for over 50 years and taken nothing from the tax payers. I now look after my 99 years old mother and get $70.00 a week to do this?