Thursday, October 21, 2021

What a difference a dollar makes

By: James Coyle, Chief Customer Officer at Retirement Essentials.

We hear of many people who don’t apply for the age pension because they don’t think it is worth it.

“I’ll probably only get a few dollars, so it’s not worth the effort” is a common refrain.  

What many people don’t realise is the fantastic benefits you receive once you get even $1 of age pension. These benefits are cash supplements as well as numerous discounts. So what are they?


Those on the Age Pension get two cash supplements.

Pension Supplement

The minimum pension supplement is $37.80 a fortnight for a single and $57.00 for a couple ($28.50 each). Over a year this works out to be $982.80 a year and $1,482 for a couple. This is the minimum you would receive. 

Energy Supplement

If you get the age pension you also receive the energy supplement. The energy supplement is paid fortnightly and works out to be $366.60 a year for a single and $551.20 for a couple.  

So, if you are eligible for even $1 of age pension, you will receive these two supplements which will give you an additional amount of at least $1,349.40 for a single and $2,033.20 for a couple each year.

Other benefits

Once you are receiving the age pension, you also get the Pensioner Concession Card. This can give you cheaper medicine, bulk-billed GP visits, bigger refunds for medical costs and help with hearing services. In addition, each State and Territory offers a range of discounts on things such as public transport, rates and utilities. These discounts and refunds can save pensioners thousands of dollars.   

So can you do anything to change your circumstances?

There are a few simple things we see that people could change to improve their eligibility for the age pension and the amount of their entitlements. You should always seek advice before making any major changes such as these.

Pay off debt

Most part pensioners find their entitlement to a pension is impacted by the assets test. How’s that? For every extra $1000 you have in assets in the “part pension zone” your age pension declines by $3 per fortnight or $78 per year. A couple with $100,000 less in assets could get $7,800 per year more in Age Pension – a big difference! 

Centrelink doesn’t care that you have a mortgage against your home, even if it is an investment loan, as it isn’t classed as an assessable asset. In simple terms if you had $200,000 in the bank and a $200,000 mortgage, Centrelink will calculate that you have $200,000 in financial assets and reduce your entitlements accordingly. If you used the $200,000 to pay off the mortgage then you will have $0 in financial assets and you will most likely get more age pension (up to $15,600 more per annum for a couple)

Don’t over value your assets and update them regularly

This is a common mistake. For insurance purposes, you might want to value a sofa at replacement cost but for your Age Pension, you should be thinking about what you might get if you had to sell it in a garage sale. Depending on your circumstances every $10,000 in assets could cost you up to $780 in pension so don’t overvalue those assets. Over time your assets often decline in value as well so it pays to keep Centrelink up to date about this. That 20-year-old Corolla is more likely to decline in value than go up.

Pre-pay some expenses

You can pre-pay some expenses up to one year in advance. Again, depending on your circumstance, pre-paying that dream overseas holiday costing $10,000 could see your pension increase by $780 that year. You might also be able to pre-pay some home renovations.  

All of the above could help to change your circumstances and enough to become eligible for the age pension if you weren’t already, or increase the amount you receive if you are on a part pension.  


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