How to hide money from Centrelink – Legally
Not a day goes by when I am not asked some form of question about how best to structure (hide) money to protect and improve a Centrelink benefit.
The question usually stems from the sale of a house, receipt of an inheritance or some other impetus.
Whilst the term “hiding money” brings thoughts of illegal activity to mind, there are legitimate strategies available to you to preserve or enhance your eligibility for a Centrelink benefit.
The most effective strategy is adding money to superannuation. Superannuation in accumulation phase is not assessed until you reach Age Pension age (this varies depending on your year of birth). By adding money to the superannuation fund of a younger member of a couple, the older partner can benefit from an increased Age Pension payment.
A similar strategy can be implemented for someone who retires before reaching Age Pension age and needs support from Centrelink. There are restrictions around adding and accessing money from superannuation, therefore the strategy should be discussed with an appropriately qualified financial adviser before making any changes.
Other less generous yet effective strategies include:
- Gifting – you are able to gift $10,000 pa and a maximum of $30,000 in any rolling 5-year period. If you exceed these gifting limits in any way, you will be assessed as though you still have the money or asset.
- Prepaid funeral – prepaid funerals and funeral bonds up to the value of $13,250 are not assessed by Centrelink. Buying one of these may assist in improving your benefit.
- Spend it – Your home is not assessed by Centrelink therefore spending money on renovations and maintenance could help improve your Centrelink payment. Spending money on things such as clothes or a holiday may also be helpful. However, this is not something we recommend for clients because spending a dollar of your own money won’t result in you receiving a dollar from Centrelink. Financially speaking, it is much better to preserve your wealth rather than whittle it away and rely on Centrelink.
I think it is also important to discuss the “elephant in the room”. Hiding money under your bed is not a viable strategy. Firstly, the cost of living is rising and if your money sits idle, your money is effectively losing value (purchasing power). In addition, as people grow older and develop dementia, hidden money is often forgotten about. Most importantly, if not declared, hiding money is fraudulent and can result in having to repay money received and criminal charges. We’ve seen it many times before.
The strategies and advice mentioned above is of general nature only. We strongly recommend you chat to someone who is appropriately qualified to discuss these matters and apply them to your personal circumstances. If implemented incorrectly you could be in a worse off position.
I am 68 and receive a pension. I own my home (value $300,000) and have no super. My mother just died and I will inherit about $150,000. It is in shares which she has had for some time. Will I have to pay capital gains if I sell them now ? I heard that if I hold on to them fir 12 months the tax is halved. Is this true? Will Centrelink make me sell them to live on? How long can I have the money or shares before it effects me as I want to move into another house?
Hi Jyoti
There are quite a few things in play here. If your mother purchased the shares prior to 20 September 1985, you are deemed to have purchased them at the share price on date of death. If she purchased them after 20 September 1985, you will need to work out what she paid. When you eventually sell them, the difference between the purchase price and what you sell them for is a capital gain. This may be taxed. I suggest you consult an accountant to work out the tax implications.
Under no circumstances can Centrelink or the the Government compel you to sell your shares, they simply include them in their assessment for determining your Age Pension.
If you would like more information, please do not hesitate calling the office on 03 5224 2700
All the best
Courtney
If I have shares and sell them to put into my superannuation will I still have to pay capital gains tax?
Hi Kerry
Yes, you may well need to pay capital gains tax if you sell your shares regardless of the fact you added the proceeds to superannuation.
You should consult your Accountant regarding this matter.
All the best
Courtney
I hv investment property , my purchase value was 540000$. And my loan is 395000$. I received family tax benefits from central link. My question is how do they calculate my asset.
Hi Dabbu
The Family Tax Benefit, both part A and part B, are income dependent. The value of your home does not come into consideration, however, if you charge rent it will be considered taxable income which may impact your benefit.
I trust this helps
Stay safe
Courtney
Im on newstart & in a depth housing apartment. I may be inherenting $300,000.00.
If i do receive a large sum of money how do I stop it affecting my benefits & my apartment.
Hi David
Please call the office on 03 5224 2700 if you’d like to discuss the specifics of your situation.
All the best
Courtney Robinson
Just a small point but, as I understand it, if I buy a $50,000 new car I still have to declare its value within my assets BUT it is now a “fire sale” value which could be as low as $40,000 immediately after I have left the show-room.
Also can you confirm that if I pre-pay an overseas trip for say $30,000, then my assets immediately drop by that sum when the payment is made?
Pete
Hi Peter
You are correct in both instances. It’s important to ensure you place a reasonable value on your new car. Centrelink online valuation tools to ensure your estimation is reasonable.
All the best
Courtney Robinson
I’m single, 64 years old, own my own home, have approx. $550K in assets and I live on north coast of NSW.
My family live in the ACT and after the recent fires, I am thinking of relocating to be closer to them. My home on the north coast is valued around $300k and a modest home in Canberra will cost me around $500k so I would have to use around $200-$250k (with stamp duty/moving costs etc) of my current assets to relocate.
Under current Centrelink rules, will I be able to apply for a part-pension after reducing my assets to relocate? I note that Centrelink ‘gifting’ rules apply for 5 years prior to applying for pension.
I would be grateful for your advice.
Thanks
Bill
Hi Bill
As you’ve noted the home is not assessed when determining your eligibility for a benefit. If you use your personal savings to buy a more expensive home them you may become eligible for an Age Pension. I suggest you call our office on 03 5224 2700 to discuss your personal circumstances in more detail.
All the best
Courtney Robinson.
am on a full disability payment and my husband on aged pension If I i herit 300000 will I loose my centrelink payment or how much do I have to spend to retain my full centrelink payment
Hi Jan
In order for me to give you an accurate answer I would need to know more about your personal situation.
If you’d like me to do this, please contact our office on 03 5224 2700.
Thanks
Courtney
Cannot find anywhere at all after rephrasing about 15 times, information regarding:
When my assets reduce by $1000 do I get an extra $3 a fortnight on my part aged pension?
Hi James
When Centrelink determine your rate of Age Pension benefit they use the income test and asset test. Both test are independent of each other and one of them could be the limiting factor for you. The rules you speak of to relate to the asset test. It may be that your rate of payment is limited by the income test. The are quite extensive rules surrounding your assessment for the Age Pension therefore I think it is best you call our office to discuss your personal circumstances rather than try and explain it via the website.
Our number is 03 5224 2700
All the best
Courtney
Hello I have an apartment overseas which i have declared to Centrelink, I am now selling it and will transfer the money to australia in order to have a deposit for my house. It will be around $200,000. Im currently receiving payment from Centrelink for my 2 kids and have a concession card as I am not working due to mat leave and my partner earns below $60k per year.
I am worried about transfering this money to my account and then Centrelink making me pay everything back. It is quite a bit of money but my intention is to put everything towards my house. How do I do this? thinking openning an account under my kids name and trasnferring there. Will I be ok with that? thanks
Hi Carmen
By the sounds of it you have a complex situation on your hands. When you speak of Centrelink benefit for your children, I assume you are referring to the family tax benefit.
If this is the case, repatriating money from overseas won’t necessarily impact your payment because it is not taxable income. With that being said, there are a few other complex issues to tackle.
Please give the office a call on 03 5224 2700 to discuss things further.
All the best
Courtney Robinson
can centelink access my bank accounts ……iif I receive a large sum of money can centrelink request details of where it came from and when and bank statements to prove it ?
Hi Jim
Whilst Centrelink don’t have direct access to view your bank accounts, they do have data matching capabilities. It is your responsibility to update them in an honest and timely fashion. If you do not, over time they may audit you and ask you for bank statements to prove your financial history.
We have seen numerous cases where people are forced to pay back significant sums of money.
All the best
Hi, I’ve been managing to save a bit while on jobseeker, I have a little bit of extra income from my eBay business and give Centrelink my profit and loss report every 3 months, but it’s not enough to affect my jobseeker rate. I recently updated my savings amount and Centrelink have asked for my bank statements, I’m wondering if my payments can be affected if I’ve managed to save money while on jobseeker? (I didn’t have any significant savings when I first got on Newstart/jobseeker). It would seem highly unfair if they could drop my payment just for saving, but I wouldn’t put it past Centrelink. Any thoughts?
Hi Casey
Centrelink determine your rate of payment used what is called the income test. Money you have in the bank is “deemed” to earn income. As a result it is important to periodically update Centrelink with your bank balance so that they may accurately calculate your “deemed” income.
With the deeming rate being so low at present, small increases in your account balance will generally have an immaterial impact on your payment.
All the best
Courtney
Hello
We pay our adult daughter’s insurances, registration and rates, as she simply cannot afford them.
We are self funded retirees, aged 72 and 68
We yet do not receive any pension, but may be eligible in a couple of years.
Will,Centrelink count paying these bills as gifting please?
Thankyou
Hi Liz
Thanks for raising this question, it is always a grey area.
Centrelink allow you to assist a family member with payments like you have suggested and it will only be considered a gift when it becomes regular and sizeable. Centrelink don’t provide an exact number therefore it’s best to use a reasonableness test. A few hundred here and there would be fine, however, if you are spending thousands each year you may need to declare it as a gift.
I hope this helps
All the best
Courtney
My mother is in a nursing home. I am a protected with our home after caring for both my perants
And living with them for 10 years.
My mother had assets bank account and car tot 86000.00
But since June 2019 the facility has been taking a daily care fee .
Of $69.00 per day. Being her P.O.A I have access to her account
Her pension falls short of her fees .
I needed to buy her an electric wheel chair out of her account.
And numerous other comforts. Will the nursing home still bill me for this .
Once her assets hits $49,500.
Hi Shane
For all residents, a basic daily care fee of $51.63 per day (current until 20 March 2020) is payable. Based on an individual’s financial means, further fees may be payable in the form of an Accommodation Payment or Contribution, a Means Tested Care Fee and Extra Services fees.
Based on the information you have provided it appears your mother entered care under a partially supported arrangement. This may mean she has to pay a small daily Accommodation Contribution in addition to the basic daily fee.
Based on what you have described, your mother should be in receipt of the maximum Centrelink Age Pension of $933.40 pf. If this does not cover your Aged Care fees, clients often use savings accumulated in the bank to meet the shortfall.
I would encourage you to contact our office on 03 5224 2700 to discuss this in further detail should you wish.
All the best
Kate Officer
We are a couple. Live in Austtalia, Own our home here. Have 180,000 in the bank.
We get The NZ age pension plus and a small top up from centrelink. We have a 15,000 car. Second hand furniture and clothes.
Otherwise no other assets. We are 70 and 72 years.
My parents have just left us inheritence of aprox 160,000. From NZ yhe soli iyor has advised it will soon be deposited in our Koiny account.
How will this affect our pension that has been in place for over 5 years?
I need to have an operation costing abouy 15,000 and we want to do up our bathroom
very soon.
What should we do?
Hi Denise
Australia and New Zealand have an agreement whereby they share responsibility for paying welfare benefits. If you circumstances change, you should update Centrelink who will in turn pass the information on to New Zealand. Based on the information you have provided it’s hard to ascertain whether it will impact your pension benefit. I suggest you call our office on 03 5224 2700 and I will be able to answer your question in more detail.
All the best
Courtney Robinson
hi
kindly , i am asking your help to illustrate me why the centrelink online services delete the access to mange income and assets from my menu.
first they put the income under assessed . then, they asked for documents. after that the delete the access to mange the income from the button of family income and assets. my question is why they took this step.
regards
Ibrahim
Hi Ibrahim
Centrelink encourage you to update your income and assets via their online portal. When there are significant changes to your circumstances Centrelink require supporting documentation before they will implement the update. In some circumstances they will not allow you to amend the income or asset online and you must contact them directly. This sounds like it has happened to you.
All the best
Courtney Robinson
My dad is the sole beneficiary of my mother’s estate, which is made up of a RAD from her aged care facility where she had been due to dementia. Everything else mum owned jointly with dad, so he should automatically inherit those. Dad is also the executor of mum’s estate and is thinking of paying the RAD to my sister & I directly from the estate. Will Centrelink be able to track this if it never hits dad’s own account?
Hi Jacqui
Centrelink rely on regular updates from recipients in order to accurately determine ones eligibility for support.
They do not have access to your father’s bank account nor do they assume joint assets were transferred into his name.
You will need to help Dad update Centrelink as to where your Mum’s assets were distributed.
Please contact our office on 03 5224 2700 if you would like to discuss the practical implications.
All the best
Courtney Robinson
Does my Centrelink aged pension payment get included into my assets (if it stays in my bank account) AND does the March adjustment each year use the same annual super(pension) asset amount (July)?
Thanks
Hi there
Centrelink include your bank balance when determining your level of assets. As a result, if your bank balance increases over time, it may impact your pension. As for your superannuation balance, your provider may update Centrelink on your behalf. Many do this twice a year. Centrelink determine your payment rate off the most recent data they have.
All the best
Courtney Robinson
Thank you…to confirm…if the centrelink payment is left in my bank balance, does that payment show up as a higher asset total..(which seems very odd!) So if I don’t use it, it becomes an asset?
Yes, by letting your bank accumulate you will have higher assets which may impact your Age Pension. With that being said, it may take a few years of not spending a cent before it will have a material impact.
Cheers
Courtney Robinson
A inheritance of app 240,000 will come to me over this year. My husband is 65 in august will not transfer from disability to age pension until 66.5 years…. I am 63 and to transfer from wife to carer pension soon under new ruling… We have a mortgage of $20,000. a 80year old house in need of new bathroom and repair. Estmated $50,000 in cost.
My understanding is this mortgage and repairs can be taken from the inheritance and will not be seen as asset until bank interest is received. What do I do .. do I have to prove in some way ie receipts as to how the money is spent???
Hi Jenny
You are correct in saying money spent on principal home renovations and paying off the mortgage will reduce the amount Centrelink asssess.
We advise clients to update Centrelink in two parts. First, let them know once you have received an inheritance payment. Second, provide a further update once you have spent the money. You can do this by simply providing a bank statement and a cover letter saying you have spent money on renovations. If they ask questions, you can point them to transactions on your statement which substantiate your claim.
I’d be happy to chat on the phone to provide you a little more context about updating Centrelink. Our number is 03 5224 2700.
Thanks
Courtney Robinson
Hi
My husband passed away a couple of months ago, I gave up work andwas receiving a carers payment and allowance, after his death this was paid for 14 weeks which ended last week. centrelink have advised the only other benefit to me is Newstart. I am 64 cant get aged pension until i am 67 and have always worked and intend to return to some part time work hopefully.
I received my husbands life insurance pay out. i need to upgrade some things on our home and pay off the mortgage, keep paying rates, water power etc before I can sell the house and buy a smaller house for myself. Can or does Centrelink count the life insurance as an asset and therefore I would not even be eligible for the small Newstart payment they have advised to claim….Thank You
Hi Elkay
Sorry to hear of your loss. What you’ve said sounds like you are largely across the Centrelink rules.
The life insurance proceeds may or may not be counted depending on where you put them following the payout.
For example, paying off your mortgage and doing works on your home will reduce the amount which is assessed. Adding to superannuation can also be of benefit though there are rules and we suggest you seek advice before doing this.
Feel free to call our office on 03 5224 2700 if you require a more detailed answer.
All the best
Courtney Robinson
My mum retired in her early 60’s with all of 40,
000 super. She’s been using that to pay the mortgage and General loving costs for approximately 3 years. Since then she realised she can’t keep up with the cost so started to try and make income as a sole trader. It kid for itself but didn’t make more than $250 a week income. Since then she returned to child care in the last few weeks but now because of covid she can’t do that either. She has 3 children including myself who give her between $50 and maybe $150 a week each. It’s not convenient for my siblings who live far to pay cash every week. Is it possible to have an account that only we pay into that Centrelink doesn’t know about ?. As she is 63 in November she is not age pension age for about another 4 years but in my early 30’s I already have more super than that. Her only asset is her house which she still pays a mortgage for and is worth $200k if she’s lucky
Hi Kelly
By the sounds of your mother’s circumstances she may be eligible for Newstart Allowance (recently renamed to Jobseeker). Whilst there is an activity test, she may be able to meet this by volunteering 15 hours per week. At present the Jobseeker allowance carries an additional $550 pf coronavirus stimulus allowance. I strongly urge you to look into this. In addition, it is not illegal for family members to support each other and it will not impact your mothers Centrelink payment if you all decide to help her out. If you go down the route of setting up a bank in her name to deposit into, it will be assessed by Centrelink though by the sounds of the level of money you’re talking about it won’t likely have much, if any, of an impact.
Feel free to call our office on 03 5224 2700 to discuss this further if you’d like.
All the best
Courtney Robinson
Hi,
I’m on Youth Allowance. About 3 weeks ago, I had sold some shares for significant loss. Then a few days ago I earned a small profit when selling other shares. Do I need to report this as a type of income to Centrelink ? Because combined with the shares I sold for loss 3 weeks ago, I still made a loss overall. Please help. I really appreciate your advice
Hi Tristan
For starters, Centrelink do not consider capital gains income (or losses for that matter). From their perspective, if you have made a loss then your overall assets will be lower and vice versa if you make a gain. Your job is to update Centrleink any time you buy or sell an asset and they’ll do the rest of the calculations.
I hope this helps.
Courtney
Hi, so if I made capital gain from sale of a property in late 2019 but lets say the money was all gone within a short time and nothing left now, what impact would this have on me applying for a centrelink income support now ? Thank you.
Hi there
Centrelink assess your income and assets at the time of application. Apart from gifting and a few other things, they are not concerned about what you have done in the past. Simply declare what you own and earn and they will make an assessment.
I hope that helps.
Regards
Courtney Robinson
I am 60 years old, unemployed and have been living frugally off term deposits, the last few years. The rates are so low now; I am eating quickly through my savings. I have too much cash assets for the dole. Can I put a non concessional cash contribution to my super (only $3000. cash in it at the moment) and apply to centrelink ? Will my money be tracked and considered hiding money to gain the unemployment benefits ?
Hi Jude, a great question and definitely one our advisers are qualified in answering. I suggest you give the office a call on (03) 5224 2700 to discuss.
My wife and I are 63 years old retirees on a super allocated pension but have lost a substantial amount of investment due to covid-19. To preserve what is left is it possible to apply for jobseeker and continue with my allocated pension until we are back on our feet?
Hi Alan
There is a distinct possibility you may be eligible for Jobseeker allowance given the Government have temporarily removed the asset test threshold. That being said, there are other criteria you need to consider. I suggest you call our office on 03 5224 2700 and I can give you a clearer idea of your eligibility.
All the best
Courtney Robinson
I am getting a inheritance of about $100,000. I need to put it somewhere as it is not enough yet to buy a house. If I put it into super, I cannot get it back out can I? DOB: 1963. Any suggestions on where it can earn interest without centrelink knowing or getting taxed.
Hi there
Unfortunately your question requires us to give more than general advice. Generally speaking the only assets that are not assessed by Centrelink are your home or Superannuation if you are under Age Pension age.
If you’d like us to consider your personal circumstances, please call us on 03 5224 2700.
If I have $8500 in bank account, $5000 of that just got paid into my account from super money and I want to apply for the aged pension will this affect the amount that I get paid
Hi Tania
Unfortunately we would need more information to properly assess whether cash in your bank account will impact your Age Pension benefit.
If you would like to discuss things in more detail, please call our office on 03 5224 2700
I am on jobseeker and will inherit approximately 60 thousand $$ from my late Mother’s estate when it is settled in 6-9 months. I know I can gift 10 thousand to someone (deeming) and I intend to spend around 10 thousand on car repairs, new clothes, a new computer and paying off my credit card, going to the dentist, nothing extravagant but as I’ve been unemployed several years I’ve been living on a shoestring. I don’t own any property and am renting. Centrelink says a one off inheritance is exempt unless you put it in the bank. I doubt it’s even possible to not have it deposited initially in to my account? Can I put the remainder in a non interest bank account or some other non income generating type to not have it lower my benefit payment?
I am 50 years old and have a congenitally deteriative disease, my life expectancy is approx 60. I don’t want to put it in to Super as I’d like to access it when needed for medical care & quality of life, or if my car carks it etc I also intend to purchase a funeral bond of around 6-7K.
Hi Gough
Sorry to hear of your circumstances. Unfortunately I feel you have been provided some misinformation from Centrelink. Once you receive the inheritance it will be assessed just like any other money you have. If left in the bank, the inheritance will be included under the asset test as well as deemed to earn an income under the income test. As you have touched on, adding to superannuation may be of benefit because superannuation is not assessed until you reach age pension age, however, there are access issues to consider.
It is important to note your rate of payment isn’t impacted by your level of assets, it simply cuts out if your assets exceed $473,750 as a single, non-home owner. By the time you have spent some money on personal upkeep, assuming to keep the remaining balance in the bank, it will be deemed to earn an income.
Please give the office a call on 03 5224 2700 to discuss the impact on your situation.
All the best
Courtney
I’m on the Disability Support Pension and will in the course of this year will receive an inheritance . Will my pension be affected upon final receipt of the inheritance and would i be able to open a Superannuation account to possibly put that money into?
Hi there
Centrelink rules allow superannuation to be held in accumulation phase and it will not be assessed for determining your benefit until you reach Age Pension age.
To answer your question, yes, it may be possible to add your inheritance to superannuation to protect your DSP payment. However in considering this move it is important to consider super contribution rules and limits as well as access restrictions. I’d be happy to have a chat if you call our office on 03 5224 2700.
All the best
Courtney
My husband will be receiving a gift of $50,000 from his mother overseas at the end of the year. We’re both on jobseeker at the moment and a few years off the pension. How will this affect us?
Hi Lizzy
To fully ascertain the impact your inheritance will have on your payment, I will need a lot more information. If you’d like to chat further, please call our office on 03 5224 2700.
Your rate of payment is dictated by an income test. If you decide to leave the $50,000 inheritance in the bank, it will be deemed to earn an income which may impact your rate of payment.
There is also an asset test. A couple can have assets of $394,500 before losing Jobseeker. Assets assessed by Centrelink do not include your home or superannuation, provided you are not drawing a pension from it. The asset threshold has been put on a temporary hold due to COVID though we expect it to return in the coming months.
As I said earlier, I feel a quick phone call will be more useful to answer your question, Lizzy.
Regards
Courtney
When Centrelink jobseeker reintroduce the asset threshold will I be able to continue with my $7,000pa superannuation allocated pension or will my super balance of $345,000 be then counted as an asset and put me over the Centrelink asset limit.
Hi Alan
The rules state that superannuation in accumulation phase is not assessed by Centrelink until you reach Age Pension age. Once you begin drawing a regular pension your account is assessed by Centrelink, regardless of your age.
Without knowing your personal circumstances I can’t comment on the impact this change will have on your benefit. If you’d like to chat further, please call our office on 03 5224 2700.
All the best
Courtney
Hi there, my mother whom is on the aged penion was left $80,000 inheritance. She offset that amount off her mortgage and would now like to start to take it out of the mortgage and back into her everyday savings account to spend. Are there any centrelink implications around this for her? Many thanks for your help.
Hi Jem
I would need to get more information to provide you with an accurate answer. To discuss her circumstances, please call our office on 03 5224 2700.
As a starting point I can give you some general advice. Money that is used to pay off a mortgage on a principal residence will no longer be assessed by Centrelink. This does not include adding money to an offset account. Money in an offset account is included for Centrelink means testing purposes. Moving money from an offset account to a savings account will have no impact, both are fully assessable by Centrelink.
I trust this points you in the right direction.
All the best
Courtney
Hi,
I am planning to apply for Austudy in August. Does my 30K bank saving effect or delay my Centrelink payment? My situation is I am leaving my job next month for full-time study and my wife is working parttime. We also have a child.
Thank you.
Hi Ama
Austudy does not have an asset test however the money you have in the bank is “deemed” to earn an income. This is used to determine your rate of payment under the income test.
I trust this answers your question.
All the best
Courtney Robinson
Hi
I am wanting to resign and will have accrued unused annual and long service leave of approx 17000. Whilst I will.pay lots of marginal tax on this that I cant avoid, my concern is that this will equate to about 17 weeks of pay and thus put me over the 13 week rule for the austudy I have just been approved for. That is , if I dont receive austudy payment for 12 weeks they will stop austudy. I though that if I gifted 10000 (or more?) to my 16 year old daughter, that would effectively reduce my weeks without payment to 7 weeks (or less if gifted more) and I am still eligible for austudy. Is this an effective strategy?
Hi Anj
What you appear to be referring to is the liquid asset waiting period. A waiting period of up to 13 weeks is applied to your application and is based on the amount “liquid” assets you have which includes money in the bank.
Changes have been bought in due to the recent COVID situation and my understanding is the liquid asset waiting period has been temporarily put aside. I suggest you contact Centrelink to confirm if this is the case.
All the best with your study.
Courtney Robinson
To provide ourselves with some flexibility at a time when we cannot be paying off our principle loan due to high Kindy costs, we have an interest only mortgage with an offset account. This offset include any supples cash at the end of the month plus about $30k which we drew on the mortgage for home improvements which we have not yet used but plan to when finances pick up. As a result we have $30k+ cash in our offset account keeping the mortgage payments manageable.
I have now been made redundant which does not help and filling in the Job seekers application it asks for savings? Does Centrelink consider this $30k as savings when it’s really just funds lowering our debt. These funds were acquired to improve the home and not for any other reason. Spending them to feed the family etc also increase our costs and our mortgage payment increase? Di i need to declare these funds in the application as savings?
Hi Gary
Centrelink do assess an offset account much the same way as an everyday or savings account. Given you have access to these funds they are considered a liquid asset.
I trust this answers your question.
All the best
Courtney Robinson
I am currently on Jobseeker and was gifted 20k 4 months ago as a back up fund – in case. I have no other assets, no car etc and I rent a room for my residence.. Will I now lose job keeper with the liquid asset test returning? I could return most of the gift if needed…or buy a car!
Hi Jack
The liquid asset waiting period only applies when making an application. You will not have to serve a waiting period once you are already receiving a payment.
I trust this answers your question.
Stay safe
Courtney Robinson
Hi Courtney
Just want to confirm your previous answer about Liquid Asset WP. Please see the following scenario:
I got JobSeeker on 1 Sep.
On 23 Sep i will get a property settlement of 50k that I want to spend on home renovation but not straightaway. Say I am homeowner with no mortgage , no income and no other asset.
What will happen to my JobSeeker payment when the LAWP get reintroduced on 25 Sep? Will the waiting period apply to me and make my JS payment stop?
Thank you!
The reason I asked about the LAWP was because most of the information I read says that the asset test and LAWP will be applied for both new and existing JS recipients.
Hi Nova
I can confirm the Liquid Asset Waiting Period (LAWP) only applies to new applicants from September 25. If you are already receiving JobSeeker Allowance, this waiting period does not apply to you.
Any money you have in the bank will be assessed as an asset and deemed to earn an income under the income test. I trust this answers your question.
All the best
Courtney
Thank you Courtney! Much appreciated
Hi I have been accumulating options contracts in a silver etf with my jobseeker and a $5000 gift they expire 1/2022 its in interactive brokers in US options I have not sold now my account is worth $25000 but can change in value every day. not sure what to do? I,m single and do not own a home.
Thanks
Hi Rob
Unfortunately I’m not able to understand what your question is. Do you mind rephrasing.
Thanks
Courtney Robinson
Hi
If I have $25000 in shares and I report it as liquid assets would it affect my jobseeker payment ?
And $25000 today could be $20000 next week, how often do you update liquid assets if somethings value changes daily?
Thanks
Hi! I have a quick question.
I’m pretty new to centerlink and this whole world. A few questions have been stressing me out lately.
Basically, is it a bad thing if you don’t spend much of your Centerlink money? So far, I’ve saved a few thousand dollars (8k+). Can this get me in trouble in any way? Does it seem like I’m hording it when I shouldn’t be?
Can centerlink ask to see my bank activity? And, if I spend it on the wrong things, can I get in trouble.
Thanks.
Joe.
Hi Joe
These a very common questions and I can start by saying you won’t be in trouble for saving your benefit.
They will not look into what you choose to spend your money on or penalise you in any way. Centrelink will periodically request updated bank statements to verify your balance.
I trust this will put your worries at ease.
All the best
Courtney
Hi Courtney,
My Dad is currently on the Aged Pension and Workcover, and has been for the past couple of years, my Mum is on JobSeeker since the pandemic hit.
He’s just won a workers injury court case of about $150,000. $70,000 of that amount will go towards the legal fees (since it’s a case that’s been going on for 7 years). They’ll be paying off multiple debts and will be left with basically nothing.
What will happen to their payments?
Hi Mindy
First and foremost it’s important that your father updates Centrelink regarding the payout. I suggest you draft a cover letter to accompany the update to explain how much he received and where the money has gone. Centrelink do not assess money used to pay off credit cards, personal loans and a mortgage on the primary home. Anything left over will be assessed using the means tests. Given I do not know your parents situation I can’t comment on the impact.
I hope this helps
All the best
Courtney Robinson
HI Courtney,
If I am on Jobseeker and receive a gift of $100,000 to my bank account do I have to declare it to Centrelink, or am I at liberty to put it straight into super as a non-concessional contribution to avoid it counting towards the assets test for Jobseeker? I am 59 years old.
Thank you so much for your kind assistance.
Regards
Annemarie
Hi Anne Marie
That is an interesting point you raise. Whilst Centrelink do not assess your superannuation if you have not reached age pension age and do not draw a pension from it, the rules state that you must update Centrelink of any change to your circumstances within 14 days.
I feel it would be wise to update Centrelink regarding your windfall and at the same time explain to them you have added it to superannuation.
This will save you any hassles down the track.
All the best
Courtney
Hi
If I have $25000 in shares and I report it as liquid assets would it affect my jobseeker payment ?
And $25000 today could be $20000 next week, how often do you update liquid assets if somethings value changes daily?
Thanks
I’ve been currently on JobSeeker since COVID-19 took a hit in our economy. Every time I received my payments fortnightly, I’ve been putting it aside and saving it as I don’t know when I will have a full-time job anytime soon.
During this period, I took my superannuation early before my retirement age as I am in my 20s. Anyway, the total amount of this is $13,000. Overall, currently I roughly have $15,000 in my bank account (under savings).
I am aware the Liquid Asset test will start end of September (I think) and was wondering, if I am still eligible for JobSeeker payments and will my superannuation money and my savings that I have in my bank account affect how much I will be able to claim or if I’m able to claim any JobSeeker payments from September?
What kind of requirements or information will I need to provide in order for me to seek for JobSeeker payments from September once Liquid Asset test will resume again.
If I take cash out of my bank account, will that then not be considered an ‘asset’? Or if I transfer my money into my overseas account as I have an active bank account in Ireland as I was living there previously and will come back to be with my partner mid next year.
Please do let me know or advice what I can do (and to make sure I’m not doing anything ‘illegal’, as I don’t want to be flagged by the ATO or centrelink.
Hi Taj
What I am about to give you is general advice. If you’d like something more specific, I suggest you call our office on 03 5224 2700.
The liquid asset waiting period applies to new applicants. When it is reinstated in September it will not have an impact on existing JobSeeker recipients.
Your rate of Jobseeker payment is determined by the income test. Your financial investments (bank and shares etc) are deemed to earn a certain level of income. The greater the amount you have in the bank or other financial investments, the greater the deemed income which will result in a lower payment. I suggest you look into the deeming rates and tiers.
There is also an asset test related to the JobSeeker Allowance. This test will not dictate your rate of payment, instead, if your assets are below the applicable threshold you may be eligible if your income permits. Once your assets exceed the threshold, you are ineligible regardless of your income level.
Centrelink assess you on your worldwide income and wealth. It is your responsibility to declare whether you hold money in an overseas bank account.
I trust this information will point you in the right direction.
All the best
Courtney
Hi Courtney,
thanks for all your invaluable information.
In regards to the reintroduction of the liquid assets test and your explanation above, could you comment on this article which appears at odds with what you are saying, or maybe I am misreading something.
https://www.abc.net.au/news/2020-07-31/jobseeker-liquids-assets-test-sees-applicants-with-savings-hit/12508686
Many thanks
Peter
Hi Peter
Thanks for sharing the article. I can confirm the liquid asset waiting period (LAWP) only applies to new applicants. From what the Government have released, it will not be applied retrospectively to existing recipients.
The article is worded in a way that suggests the LAWP will be applied to an existing recipient. I can only assume the person referred to in this article has not yet applied for a benefit or there is a slight misinterpretation of the interplay between the Income Maintenance Period and LAWP.
Thanks again
Courtney
Can I put shares under a super structure without having to sell the shares? Then would they be exempt from the assets test. Does this require an SMSF (which I don’t have)
Hi Mark
May I start by saying this is not intended to be personal advice, instead, I hope this information will point you in the right direction.
It is possible to transfer shares into a superannuation fund. This is known as an in-specie transfer.
There are tax implications of doing this because it is considered a change in ownership (from you to your superfund).
Not all superannuation funds accept in-specie transfer of shares. It is possible to do it via a SMSF as can many of the retail and wholesale funds. Industry funds generally do not.
I am happy to discuss the concept of in-specie transfer in more detail on the phone if you care to call on 03 5224 2700.
All the best
Courtney Robinson
My husband was retrenched due to COVID-19 on 25 June and received approx 37 weeks payout comprising long service/annual leave and redundancy payment which he has put in the bank with other savings of approx $30k.. total savings of about $70k.
I’m currently on JobKeeper as sole trader but will be receiving lower tier payment from 28 September.
We’re both 61 so we’ll under pension age of 67.
Can he apply and receive JobSeeker at full amount considering $$ in bank or should he put some $$ into super as not assessed for JobSeeker purposes? I understand he has to wait an income maintenance period of 37 weeks so will receive nothing until March next year. If he applies now can he avoid income maintenance period due to funds in bank?
Appreciate your help as CENTRELINK can’t answer this for us.
Hi Coco
I am unable to provide advice as to whether it is appropriate or not to add to superannuation without more information about your personal situation.
I can however advise you Centrelink plan to re-introduce the asset test and liquid asset waiting period from September 25. The asset test applies to both existing and new recipients whereas the liquid asset waiting period only applies to new applicants.
As for the income maintenance period, it takes effect from the date the employer pays the termination payment. Again, I can’t give you specific advice without more information about your personal circumstances.
I hope this points you in the right direction.
Thanks
Courtney Robinson
I live with my 3 children, in the family home of my parents. We have lived here since 1964. At the start of 2019 both parents moved into an Aged care facility due to dementia. They both receive full pension, but the two year exemption of the family home in the assets review is approaching, and it scares me to think of what might happen.
I don’t know how it will affect their costs at the Facility, they currently pay the Basic Daily Fee, and the DAP, at a rate determined by Centrelink. The value of the home is, I think, around $1.9m. I’ve been told that after 2 years of them not living in their home, its value changes these rates.
I am sole parenting, and the sole income while the children complete high school/Tafe/Uni. I certainly couldn’t afford to rent in Sydney.
We are worried that :
a) the value of the home will be included in their assets, and this will push up their costs at the facility which will force us to sell the house that our 3 generations have lived in all their lives.
b) if we sell the house, all the money goes to the nursing home anyway, and we are left homeless and unable to afford to live in Sydney close enough to tend to the parents.
I don’t know what the current rules are, and the likely actions Centrelink will take, what the costs could change to, how we can stay in the family home, yet afford to keep the parents in the care facility they need, if Centrelink changes the rates of $’s at the facility? Do I have to move them back home, quit my job and be their 24/7 carer again, as I did in 2018? If so, how do I support my children? Any suggestions and guidance much appreciated.
Hi Jennifer
Given there are quite a few moving parts here I will save the essay and suggest you call our office directly on 03 5224 2700.
We have specialist Aged Care advisers who will be able to give you information about the costs of aged care and the implications of keeping vs selling the home.
I’m sure a short chat with either Kate or Zac will allay some of your concerns.
All the best
Courtney Robinson
My part age pension application has been approved recently but has yet to receive first payment. In my application ,Centrelink has used my bank account balance in 2003 instead of the current balance I provided them in my application.They didn’t tell me why they did not use my recent balance. When I informed them about their mistake, they asked me to produce bank transactions and statement since august 2019. I find this disheartening and I want to cancel my approved application altogether and not going ahead with aged pension. I am thinking either going back to work or becoming a self funded retiree instead. Can I actually stop the age pension voluntarily once approved? . The information I could get on their website is that I could only stop payment , but not the whole process. Please advise. Thanks
Hi Indahim
I’m sorry to hear your experience with Centrelink was not ideal. Unfortunately I have heard similar cases where old balances and assets have not been updated in their system despite more recent figures being provided. All I can suggest is you provide the statement requested and put this behind you. If you do want to cancel your application or payment, you can call the older Australians line on 132 300.
All the best
Courtney Robinson
I recently applied for the Aged Pension but when entering my financial details on the online application, the MyGov form accepted all my bank accounts except my credit card accounts, since these accounts don’t have a BSB & Account No. So I rang Centrelink about this, since I keep a couple of thousand dollars or more in my credit cards, & therefore I regarded these amounts as assets.
Centrelink advised me that credit card amounts were not considered in there calculations as they don’t attract interest; they only use amounts where a deeming rate can be applied. I queried her, restating that I actually have funds accumulating there. She then went to her manager to confirm, who then restated that credit cards were not considered by Centrelink, therefore applicants were not able to input those amounts into the Aged Pension application.
Since I can’t approach them again about this matter as it would lead nowhere, I thought to put it before you for your understanding of their response. If that is the case, then it would be possible to park various amounts of funds, legal & illegal, there, without these figuring in Centrelink’s assessments! I find this very peculiar.
Thank you for your consideration of this.
Hi Chris
This is an interesting point you make and I appreciate you posting on our forum for others to see and benefit from.
In normal circumstances, where there is no outstanding balance on a credit card or a negative balance (you owe money), Centrelink do not assess it for either the income or asset test. However, where you have a positive balance (occurs if you make repayments greater than what is owed), the amount in excess of your limit is assessed as a financial asset.
In the example you explained, parking additional funds on a credit will be assessed by Centrelink. Unfortunately it seems you have been given misinformation otherwise you are right, what’s to stop people from implementing your strategy to hide money from Centrelink aseessment.
I trust this answers your question
All the best
Courtney Robinson
Thanks for your reply, Courtney and I agree with you that a positive balance in the credit card account should be regarded as a financial asset. This is what I posed to Centrelink on the phone, to which they responded that “credit card amounts are not taken into account as balances there don’t attract interest, therefore they don’t figure under their deeming rules”.
However, when I input my financial details into the MyGov Aged Pension application form, there is simply no provision on the form to insert credit card amounts. I tried every which way to do so, but my entries kept getting rejected as the form only accepted amounts that had a BSB and Account number associated with them. As you know, and from my search of my credit card statements, there is no evidence of BSB and account number on these statements.
Thanks for your advice; I might just write to them this time & have their instruction to me on paper, in the event that I’m hit with a penalty for non-declaration of financial assets.
I just received a payout from a company I owned equity in after it was brought out (Common Stock). Do I have to report this to Centrelink as income? I read that lump sum payments don’t count towards income if they are unlikely to be repeated, which I feel this is. I have already updated my bank account information to show the increase in available savings.
Hi Jay
You have done the right thing in updating your bank balance with Centrelink. I always recommend providing Centrelink a cover letter to explain the shares (ownership stake) were sold and are no longer held.
Thanks
Courtney
Hi.. can you please reply and answer my question raised 30 August.
Hi Corinne
As noted in my initial response, the question you asked requires me to know a little more about your personal situation.
It may be that you are eligible for a payment without adding to superannuation. Unfortunately this is not the forum for me to be answering question regarding personal circumstances.
If you’d like to chat on the phone, i’d be happy to help. Our number is 03 5224 2700.
Thanks
Courtney
Thanks
Courtney
Morning,
is the $20000 early release of superannunation due to COVID 19 included in assests for centrelink. I have about $24000 in my bank account atm , but $20000 of that is the 2 payments i was allowed to access. Im currently on jobseeker.
Regards
Hi Jack
Any amount in your bank will be assessed by Centrelink under their means tests. The balance of your bank is “deemed” to earn an income which is used to calculate your payment under the income test.
I trust this answers your question.
All the best
Courtney Robinson
My wife and both Aged Pensioners (aged 72 and 71). We’re about to receive an inheritance that will put us well over the ‘assets’ upper limit, but still want to access senior health benefits.
I have reviewed the Centrelink website and it appears we will need to apply for a Commonwealth Seniors Health Card. Is this correct? I have been told that this application can take several weeks/months even!!
Is there an interim (less benefits option?) available while awaiting approval of the CSHC?
I had been told a few years ago, that there was a card automatically provided when a person’s Aged Pension was cancelled. Is this true?
Hi Barry
You are correct in saying the Commonwealth Seniors Health Card (CSHC) is targeted towards self funded retirees. Waiting times for this card can be lengthy, though to their credit, Centrelink have improved processing times in recent months. Once you have submitted your application I suggest you keep receipts for all of your medical expenses. The card is backdated from the time you apply meaning you can claim back these medical costs via Medicare once you receive the card.
Unfortunately there is no interim card. You may also like to consider your eligibility for the Low Income Health Care Card. It provides a greater range of benefits to the CSHC though it does have more stringent means tests.
As for the card automatically handed to seniors who had their Age Pension cancelled, this only relates to those who lost the Age Pension as a result of Government changes to the asset test back in January 2017.
I trust this answers your questions
All the best
Courtney
Hi, moved interstate and have been renting out our home Of 18 years after moving interstate 2 years ago. We have decided to sell our property to purchase a principal place of residence to live in interstate. We are a married couple receiving carers payment & jobseeker payment With (medical exemption) approx sale of property is $530k with no mortgage. Obviously this money will be used to purchase A new home so the money will be in a bank account ready to roll once we find a house to purchase. How will Centrelink look at this payment Of $530k in regards to carers payment and jobseeker. As the money will be used to purchase a home which under normal circumstances would be exempt will it cancel out our 2 payments and we would need to reapply For those payments once new home is purchased or is there sonething in place in regards to former place of residence that has been used as a rental for the last 2 years. Typically you ring Centrelink 10 times and you will get 10 different answers in regards to how this money is treated until new home is purchased. Any advice?
Hi Angie
If you sell your primary home Centrelink do not assess it proceeds as an asset for 12 months provided you plan to use them to purchase a new home. They do however use deeming on the proceeds which contribute towards your assessment under the income test.
If after 12 months you have not found a suitable home to live in, Centrelink do provide extensions to the 12 month asset test exemption.
All the best with the move.
Courtney
Hello
My husband and I both receive a part aged pension. We want to use our superannuation to renovate and improve our current home which we own with our daughter. We understand if use our superannuation to fund the home improvements that it should not affect our part age pension.
Once the development is approved by the council we intend to close one of our super funds to pay for the build. At what stage and how should do we advise Centrelink.
Hi Gayl
It is advisable to update Centrelink any time there is a meaningful shift in your wealth. For example, if you construct through a builder they will generally take payments in stages. You may elect to update Centrelink each time you make one of these payments. You may also want to update Centrelink when you withdraw your superannuation which will presumably sit in the bank until such time as the builder requests payment.
I hope this answers your question
Thanks
Courtney
I am retiring next year at age 66. I am single, own a house and have $390,000 in super. Is it beneficial to sell the house and withdraw $200,000 from super to buy a more expensive house? This move will maximise the age pension.
Hi David
Given the primary home isn’t assessed by Centrelink there may be a benefit in the strategy you suggested. However, some important things to consider are the changeover costs (stamp duty, agents fees and so on) and the loss of the use of that money. If the Age Pension doesn’t cover your day to day needs, will you have enough left in super.
i trust this points you in the right direction.
All the best
Courtney
Can you tell me how Centrelink assess you? I am a recent widow on the aged pension. When the money from my husband’s bank account is transferred into my name I will be approx $82,000 over the limit. I know they use two deeming rates, one for the first $53,00 over the limit and a higher rate for the balance. I have also read they assess you as losing $3.00 for every $1,000 you are over the limit. This is confusing. Which of these two methods do they use? Thanks.
Hi Colleen
I can appreciate your confusion, it’s no easy feat to work out what payment you may be eligible for. At its simplest, Centrelink use two means tests to calculate your Age Pension payment. The income test and asset test. Whichever test produces the lowest rate of payment, that’s what you’ll receive. For example, if you have very little assessable income you might be eligible for the maximum Age Pension under the income test however, if you have meaningful assets your actual payment will be much lower because of the asset test limitation. There are different thresholds and scales used for singles vs couples and homeowners vs non-homeowners.
I hope this points you in the right direction.
All the best
Courtney
I moved my mum into a nursing home 8 months ago selling mums shares to pay down $300,000.00 of the $500,000 RAD payment they require . Have just sold mums house which settles on the 25th of this month and after paying realestate fees and the remaining $200,00 into RAD will be left with about $340,000 .
I have POA over my mum due to her mental state and also over my disabled brother whom we look after , what id like to do is start up a family trust and pool mums , my brothers and our money in a trust then disperse profits from there . Will this affect my mums pension in any way , at present she is getting the full pension which just covers ther nursing home costs of $3200,00 per month which will come down by $765,00 monthly due to the RAD top up.
Would like to pool funds to bugg another property in trust name and disperse proffits as bank interest is abismal at present.
Hi Gaven
Thanks for your question, however, this is not the appropriate forum for me to provide an answer. Centrelink’s assessment of a trust depends on a number of factors including who the trustee, beneficiaries and contributing entity is.
If you’d like to discuss your plans in more detail, I’d be happy to chat over the phone. Our office number is 03 5224 2700.
All the best
Courtney
hi, my girlfriend and me are on Jobseeker and was gifted $10K 1 week ago ( back up fund and school fees) we also have some saving from previous jobseeker payments during this half year period ( total $20K, and no other asset). Do we need to report the total of bank saving to centrelink before 25th of Sep? will that stop our centerlink payments?
Hi there
Thanks for your question, that’s an incredible effort to be able to save on Jobseeker.
Centrelink determine your rate of payment using a sliding scale income test. The money in your bank, whether gifted or not, is deemed to earn income. It is important to update Centrelink anytime there is a meaningful change in your bank balances (gifts included) because it could impact your rate of payment.
The asset test is much simpler. It doesn’t dictate how much you are paid, instead, if your assets are above the applicable threshold you are not eligible for a payment. The asset threshold is different depending on whether you are single or part of a couple and a homeowner or non-homeowner. You can look these thresholds up on the Centrelink website. It is important to note your bank balance contributes towards the asset test.
I trust this sufficiently answers your question
All the best
Courtney Robinson
Hi there, I am 62 and have received Centrelink Job Seeker payment since the assets test was suspended in April 2020. I am awaiting a procedure to treat my heart atrial fibrillation & also a procedure to treat my enlarged prostate both of which severely limit my capacity to work. I own my home without any debt. My current assets mean I will become ineligible for Job Seeker payment when the assets test is re-introduced on 25 September 2020. These assets, mainly a rental unit with no mortgage, produce a small income which leaves me eligible for part Job Seeker Payment at the moment. My wife’s income is also assessed but still leaves me eligible for part payment. In theory could I borrow money against the value of my rental unit then place the money in a superannuation fund to reduce my assets assessable in relation to the Job Seeker Payment ?
Hi Oliver
By the sounds of it you’re having a rough trot. All the best with your procedure.
That’s quite an interesting strategy you’ve put forward. I will start by saying I am not making any recommendations around this strategy, rather, I’ll explain the Centrelink rules.
As you may be aware, Centrelink do not assess superannuation held in accumulation phase until you reach Age Pension age. In addition, Centrelink will only assess the net value of your investment property. On face value your strategy could work. However, some things to consider are superannuation contribution rules, the fact you will need to make repayments on your investment loan, the costs and time involved in restructuring your finances and ultimately, whether such a move would have a meaningful benefit for your rate of payment.
I am unaware if Centrelink have anti-avoidance provisions to prevent strategies such as this.
All the best
Courtney Robinson
we have a motor home listed as an asset valued at 30 thousand dollars – we were fortunate enough to find a buyer last February and they have sold their house and now want to pay
how do I handle this – go to my gov edit the asset by removing it and adding the sales price to cash at bank
would appreciate your guidance
Hi Peter, what you’ve described should do the job. Don’t forget to include supporting documentation. We tend to provide a cover letter explaining what has happened and along with supporting documentation including bank transaction statements.
All the best.
Courtney
Hello, My husband will retire next month and can get the full aged pension but I still have to wait 3 years. I have not been employed for many years as I have been a homemaker and both of us have been living off my husbands wage . He will be eligible for a full pension so do we both have to live off this as a single pension or as couple. Im wondering how we will cope after his final pay runs out especially with me not qualifying yet. Do I get Newstart and volunteer. He will have some long service leave .We also own our home as we spent all his super on buying a small home and we have $8000 in the bank. Thanks for your help.
Hi Janelle
Unfortunately I cannot make an assessment of your eligibility without knowing more about your personal situation. JobSeeker Allownce (previously Newstart) is designed for people who are not working though haven’t yet reached Age Pension age. This is something I suggest you explore to help meet your cashflow needs. You are right in pointing out you can meet your mutual obligation requirements by volunteering 15 hours per week as opposed to having to look for work. This only applies to those who are over 55.
I hope this points you in the right direction
All the best
Courtney
Hi I am on a part pension, as i have reached retirement age and my husband will reach retirement age soon firstly do i contact centrelink when he does to include his super also his super is about $850,000 so i think we will go over the limit to received any age pension. will leaving his super in accumlative stage instead of putting it into an account based pension make a difference wether we would get a part pension?
Hi Chris
Once your husband reaches Age Pension age his superannuation will be fully assessed in both accumulation and pension phases. If your husband is already registered with Centrelink they should automatically contact him asking for information up to 13 weeks prior to him reaching Age Pension age. If he does not receive anything then it might be worthwhile contacting Centrelink yourself to provide them information about his superannuation.
All the best
Courtney
Hello. I recently resigned from my job and have around $75,000 in saving. I have a mortgage of around $220k and around $300k in super. I’m aware that my saving will preclude me accessing jobseeker before 13wks (liquid assets), which is fine, however I’m curious whether after the 13wks has lapsed, will the savings still impact on my ability to get jobseeker? Thanks in advance.
Hi Stuart
You are correct in saying Centrelink assess money in the bank when determining the liquid asset waiting period.
Once you have served your wait period your bank balance will be deemed to earn an income which is used to determine your rate of payment.
I cannot make an assessment as to the impact this will have on your rate of payment without knowing more about your situation.
You might like to contact a financial information officer at Centrelink if you would want to understand what your rate of payment might be.
All the best
Courtney
I’m a student currently studying. I’m currently receiving job seeker but need to start a claim for Aus study.
The period for liquid asset test waiver ended 24 September (mistakenly I considered the date the 25th).
Will I be subject to the liquid asset test on my accounts for making the claim on Aus Study while receiving job seeker?
Hi Abri
I’m sorry to say I don’t have the answer to that. On face value the announcement suggests all new applicants will be subject to the Liquid Asset Wait Period.
That being said I suggest you speak to a Financial Information Officer at Centrelink to clarify your question.
All the best
Courtney
Hi Courtney,
I hope you can help? I received jobseeker in April after losing my job because of Covid. I have since then been actively looking for work. This has since stopped as Centrelink has informed me I am over the assets limit.
My situation is, I own a house in Tasmania that I rent out and I rent a home here-I have no other income apart from rent which doesnt even cover my rent here.
I have had advice from Social security rights and they have said I should be classed as a non-homeowner as my home in Tasmania is not my principle home-this would bring me under the asset limits and mean I should still receive Jobseeker.
I have re-submitted a claim and its still coming back rejected!
Thank you so much for your advice.
Alicia
Hi Alicia
I’ll try my best to point you in the right direction, however, without knowing your full situation I can only give general information.
You are correct when you note there is a slightly higher asset threshold for non-homeowners. Given you are not living in your Tasmania property and it is being rented, you have a reasonable argument to say you fit under the non-homeowner scheme, albeit, the value of that property will be assessed.
If you believe Centrelink have not assessed you correctly, I suggest you contest the decision. We quite often do this for clients.
Good luck
Courtney
I’m currently going through testing for MS and my paid leave from work will soon run-out. As I don’t know my family medical history I was ineligible for Income Protection so need to apply for Sickness Allowance (JobSeeker?). I have minimal assets but have ~$30k in savings which will seem to trigger a 13 week waiting period for this allowance.
These funds were originally intended for a first home deposit but as my working future is now in doubt then for a car as I don’t have one – but due to an MS symptom I won’t pass the eye test so I can’t get my license until my vision improves.
Ideally, I would prefer not to spend the full amount on a car. My rent is $760 per fortnight (small house, outer suburb) so the benefit would cover rent and my other living costs would be covered by any savings left.
Would a car be considered a ‘reasonable expense’ and if so is there any allowance for it be considered a future reasonable expense?
Many thanks.
Hi Jill
I’m sorry to hear of your situation, I wish you well with your prognosis.
Generally speaking a car would not be considered a reasonable expense, that being said, only Centrelink can make that judgement, not me. I suggest you call their Financial Information Service to understand what might be considered a reasonable expense.
All the best.
Courtney Robinson
I am currently on age pension and partner is on jobseeker payment, we will both receive trust distributions through non controlling private trust for last financial year. Income for trust was earned before we both applied for Centrelink payments last financial year. How will Centrelink assess the income from trust distribution and will payment from Centrelink be affected as income was earned before the application for Centrelink was made. Does Centrelink take into account when income was earned?
Are the trust distribution treated differently to being paid as a wage, for example if theoretically we received wages for half of year and then applied for Centrelink payments then how would that be assessed.
Hi Jack
Thanks for the question, this can be a very tricky area and i’ll try to keep it as simple as possible. The assessment of trust income and assets depend to how the trust is set up, who has control of it and who the beneficiaries are.
Centrelink use the most recent financial year statements when calculating trust income therefore your income assessment is based on when it was earned, not if and when it is paid. Another important point to note is that Centrelink base their assessment on trust earnings, not distributions. I think an example will be useful in explaining this rule.
Let’s assume a trust earns $50,000 and there are two beneficiaries. The trustee decides to distribute $20,000 to one beneficiary and leaves the remaining earnings within the trust. Regardless of what is paid, each beneficiary will be assessed as having trust income of $25,000. This example over simplifies what is a complex area and makes a number of assumptions therefore I suggest you speak directly to Centrelink to understand how they have assessed your involvement in the trust.
All the best
Courtney
Hi
I am 34 years old and have autism and get a disability pension, can I contribute some of my disability pension to my superannuation account? I do not pay pay rent where I live and I was told that I should put any extra money I have from my disability pension into superannuation for later in life. Thank you.
Hi Bob
Thanks for the question. As your question has quite a few elements, may I start by saying this is general information and is only intended to provide you with some guidance.
It may be possible to add to superannuation based on your age. What’s important to consider is whether you may need access to this money in the future. Superannuation has restrictions on when you have access your money.
Many use superannuation as a tax effective way to save for retirement. If tax is not an issue for you there are other options to save for retirement without losing access along the way.
I trust this points you in the right direction.
All the best
Courtney
Hi,
I am 66yrs 6 mths and have started receiving age pension. I have a whole of life assurance policy which I am considering cashing in the accrued bonuses (withdrawal value). I’m sure this cash in value will have to be reported to Centrelink but will it be treated differently if it is placed into a superannuation account that is still in accumulation phase?
Thanks, Michael
Hi Michael
Thanks for the question. To your first question regarding the closure of your whole of life policy, here is a direct snippet from the Centrelink website.
“Upon withdrawal from a policy (whether by surrender or by the policy reaching the maturity date specified in the policy) the difference between the surrender/maturity value and the sum of the purchase price (if any) and the premiums paid by the investor over the life of the product is held as income over 12 months (under the income test).
As for adding the proceeds to superannuation, if you have already reached Age Pension age your superannuation will be assessed by Centrelink regardless of the format it is held (accumulation or pension phase).
I trust this answers your questions.
All the best
Courtney
Hi
I’m about to submit an application form to my super fund to apply for a pension based on medical, and need help with a couple of questions.
I’m currently on Centrelink-Jobseeker, but may be moving over to the NEIS payment soon where I can earn up to $7000 income per quarter.
I’m 56 single with no dependants.
I would also like to upgrade my house and would be needing to apply for a mortgage with the pension being used by the lender for serviceability. (Unless I use some super to contribute to the purchase).
My questions are as follows-
Are there any strategies to be able to get the pension as well as keep my Centrelink payment?
I believe it depends on what the money is used for, but does it also depend on how I have the pension paid? ie frequency of payment. The options range from fortnightly through to annually.
Someone mentioned to me that if I take a lump sum payment annually, rather than a regular fortnightly payment, that it wouldn’t affect my Centrelink payment unless the money is used for investment purposes-is that the case?
I’m not really understanding how the frequency of payment makes a difference, as I also wouldn’t be using a fortnightly payment for investment purposes either, just for living expenses.
How is one seen as income and the lump sum isn’t-or are they both seen as income??
The Government website also says that any payment is treated as income if it’s placed in a bank account.
The other consideration is that my Super will now be considered an asset. As a single homeowner I can have up to $268000 in assets. My Super is worth about $400k.
Is the only strategy to use some of my Super to contribute to buying the new property therefore reducing the asset down to the allowable amount?
Then changing the payment frequency to fortnightly so I have income to live off the remaining amount.
It does concern me that I won’t have enough super left though to live off for the rest of my life unless of course I downgrade the property at some stage and maybe be eligible for the age pension at retirement age.
Your help would be appreciated.
Hi Dale
Given you have quite a few questions which are personal rather than general in nature I suggest you call our office to have a chat.
The number is 03 5224 2700.
Thanks
Courtney
My mum is 89 years old and on full aged pension. She has about $17,000 in various bank accounts. Will this affect her pension? What is the actual limit a pensioner can have in bank accounts?
Hi Lyn
There isn’t a limit on how much you can have in the bank per sey, rather there is a general asset limit. This limit will depend on whether your mother is a home-owner or not and whether she is single.
The bank account balance is combined with the value of other assets such as cars, contents and so on.
I trust this helps
Courtney
Hi, I am 66 years old and due to Covid had to close my wedding decorating business. I am now receiving an age pension. I have a website and stock (which has been written off in depreciation) The value may be around $20,000.00 I asked Centrelink today if I sell this will it affect my pension and they said yes. I am married to an age pension, we still have a small mortgage but no savings or super. Would appreciate your reply, Thank you.
Hi Bronwyn
Unfortunately I cannot make comment as to whether the sale of your business will or will not impact your Age Pension payment.
To make an accurate assessment we’d need to know your entire financial circumstances.
Sorry we couldn’t be of more help.
Thanks
Courtney
A family friend is inheriting approximately $200,000 from when both of her parents passed away.
She has only an aged pension that keeps her above water and has been living comfortably with it and the thought of purchasing a small home has come to mind, for her kids future.
This isn’t about hiding money but if she utilised the money to put a deposit on a house, would this affect her pension?
Could she gift this to her children without it affecting her?
Ive done my research via the Centrelink website which was extremely unhelpful.
Unfortunately she’s not tech savvy and typical for the elderly generation, change isn’t easily accepted, so just looking to help her out with whatever advice I can. 🙂
Hi Kae
If she chooses to purchase a home to live in the value of that home is not assessed by Centrelink.
In addition, the asset test threshold used to determine her Age Pension will reduce. Please refer to the Centrelink website for information about the asset thresholds for both home-owners and non-homeowners.
I trust this is what you were looking for.
All the best
Courtney
Can i put $10000 from my savings account to my sons youth saver account to be elegible for job seeker as i have injured my achilles and out of work for some time. I currently have to much money in savings according to the liquid asset test and i will burn through it quickly with outgoing bills and accident related expenses?
Hi Jon
Centrelink gifting rules permit you to gift $10,000 pa and $30,000 in any 5 year rolling period. Whilst I am unaware of any specific rule which prevents you from gifting money in order to avoid the waiting period, I suggest Centrelink would likely have provisions against this. Please call the Centrelink Financial Information Service to clarify your question.
All the best
Courtney
Hello. I left my career, sold my small home and moved to the country to be my mothers carer and was on full carers payment for the past 2 years which is ending very soon. I need to apply for job seeker until i find employment again. My problem is my savings account that has my house deposit. The rules are that you are supposed to buy another house in 12 months but that was impossible for me to do as i had no idea where i wanted to live once mum went into full time care facility. I have recently found a house to buy so should i pay for that now before i apply for jobseeker?
Hi Kim
This is quite a complex question which I suggest you refer directly to Centrelink. They have a financial information service. Whilst Centrelink ordinarily include money in the bank when determining your entitlement to Jobseeker and the applicable waiting periods, based on your circumstances they may be willing to use discretion.
All the best
Courtney
We are both on aged pensions. If we downsize do we get 12 months to do renovations before the money becomes an asset?
Hi there
To answer your question simply, yes, money earmarked for the purchase and/or renovation of a new principal home is exempt from asset test assessment for 12 months. To directly quote Centrelink, “funds from the sale of the principal home that are held in a financial investment, which the income support recipient intends to be applied to purchase, build, rebuild, repair or renovate a new principal home” may receive a 12 month asset test exemption.
I hope this helps
All the best
Courtney
If we downsize and buy a home that needs renovating, do we get 1 year to do this before our pension is changed?
I’ve read this is so but know someone who’s had their pension stopped straight away.
Hi there
As I noted in an earlier post, you may receive a 12 month asset test exemption on house proceeds earmarked for the purchase and or renovation of a new principal home.
However, it’s important to keep in mind Centrelink also use an income test to assess your eligibility for a payment. Given your proceeds will likely sit in a bank account they will be deemed under the income test which may impact your payment.
Hi Courtney
When my mother passes I am said to inherit large large sum of money and I wish to ask a question in regards to my thoughts about this. I’m currently on a disability pension and have been for the past 25 years and with my health failing yearly I wish to remain on it for the many benefits and gives me in regards to doctors and medication.
Is it possible to take out term deposit in another person‘s name, affectively handing them the inheritance. As a beneficiary, thus leaving me to remain in my current situation.
Who would I need to speak to? Financial adviser, the bank or an accountant perhaps?
Thanking you for your time.
Hi Carol
As the nominated beneficiary for a said amount of money / asset, you are the official owner of the money / asset. If you wish to forward your inheritance to another person, Centrelink gifting and deprivation rules come into play. You are permitted to gift a maximum of $10,000 pa and $30,000 in any 5 year period. Anything in excess of these thresholds is considered a deprived asset meaning you will be assessed as still owning the asset for 5 years.
All the best
Hi
Just wanted to clarify something. If I simply spend my assets (renovations on my own home, holidays, gambling etc) so it comes under any assets/income threshold before I turn 67 I can get the age pension ?
Hi Chris
Centrelink assess your income and assets when determining your rate of payment. If you spend your savings on leisure activities then naturally your assessable assets will reduce. Without knowing your financial situation I am not in a position assess whether you will be eligible for an Age Pension.
Hi I currently have 27k in savings. A portion of the money isn’t actually mine as I have been receiving my girlfriend centrelink money to help her save money. If I return the money to her is it still considered a gift?
Hi James
This is a very grey area with Centrelink. Whilst I do not believe it is a gift Centrelink may have a different opinion, it’s a matter of interpretation.
Sorry I can’t be of any more help.
Courtney
hi, i am on jobseeker since last year april 2020. i just got hired by a coffee shop working as a casual for 210 dollars a week, thats 420 dollars a fortnight. so if i declared this income to centerlink, will they cut my jobseeker payment? Thanks
Hi Michael
Unfortunately I cannot make an assessment about whether they would cut your payment without knowing your full circumstances. There are other factors that impact your eligibility for a payment.
All the best
Courtney