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Pension Rates and Rules

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Your pension is likely an important part of your retirement plan. But do you really understand what you’re entitled to? What about how the new rates will impact you? This article is going to overview the details of some of the recent changes and rules involved with understanding your pension.

Recent changes

As of September 2014…

  • The Clean Energy Supplement (CES) payment was created as a non-taxable way to offset increased carbon costs and other expenses. This has resulted in an increase of funding for certain people groups.
  • Single people are eligible for an increased amount of pension funding
  • Couples are also eligible for an increased amount of pension funding

September of 2014 ushered in a series of changes to Age Pension rates and eligibility. The good news is that these changes have generally brought on good news, an increase in funding for most people. It’s just important to understand these changes, to ensure you’re as up to date as possible on what pension amount is coming to you.

See the table below to help illustrate the difference in funds that could apply to you.

Age Pension rates
Single (per fortnight)
 20 March 201420 September 2014Increase
Base$766.00$776.70$10.70 pf
Supplement$62.90$63.50$0.60 pf
Clean Energy Supplement$13.90$14.10$0.20 pf
Total $842.80$854.30$11.50 pf
Couple (each member of couple, per fortnight)
 20 March 201420 September 2014Increase
Base$577.40$585.50$8.10 pf
Supplement $47.40$47.90$0.50 pf
Clean Energy Supplement$10.50$10.60$0.10 pf
Total $635.30$644.00$8.70 pf

Source: DSS media release, and Centrelink website

Other changes as of September 20, 2014

The following is a list of some of the other effected areas of Age Pension:

  • Age Pension Assets and Income tests
  • Allowances
  • Levels of family payments
  • Pension bonus scheme evaluation
  • Rent assistance

Pension Eligibility and Transitional Rules

Unfortunately, the CES is not the only recent change to pension rules. The Age Pension Income Test has changed, and now excludes certain people. This would have left a lot of people without many options, but the government has put transitional rules into place.

See the table below to get an idea of what the transitional rates typically work out to.

 

Age Pension transitional rates – Resident in Australia
Single (per fortnight)
 20 March 201420 September 2014Increase
Age Pension (maximum)$699.80$706.80$7.00 pf
Clean Energy Supplement$13.90$14.10$0.20 pf
Total$713.70$720.90$7.20 pf
Couple (each, per fortnight)
 20 March 201420 September 2014Increase
Age Pension (maximum)$565.10$570.80$5.70 pf
Clean Energy Supplement$10.50$10.60$0.10 pf
Total$575.60$581.40$5.80 pf
Age Pension transition rates – Not resident
Not resident in Australia or absent for period of greater than 6 weeks
 20 March 201420 September 2014Increase
Single (pf)$641.90$648.30$6.40 pf
Couple (each, pf)$536.30$541.70$5.40 pf

Source: DSS media release and Centrelink website

The transitional rates have come into place to compensate those individuals while they work on developing a plan of action. Individuals will be assessed under the older rules until Centrelink determines the switch needs to be made. If the switch is made, it cannot be undone, and if that is the case, these individuals will receive the transitional rates (plus allowances) while developing alternative arrangements.

How much funding a person is entitled to is based on the Consumer Price Index. The Department of Social Services (DSS) has stated that the maximum pension under transitional rules is $720.90 per fortnight (in the case of a single person), and $1,162.80 per fortnight (in the case of a couple, the combined amount). In addition to this, there is a rental assistance program.

We have asked our readers for input, and so far we’ve heard somewhat good things. One reader in particular has made the claim that he and his wife (as well as any couple who earns between $26,250 and $77,850 annually) actually prefer the transitional arrangement. Many seem to feel similarly, so these are potentially optimistic conditions.

If you are interested in learning more about Age Pension, feel free to check out the following articles from SuperGuide for further reading:


 

 

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