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Centrelink Changes Could Affect Pension Entitlement

Changes soon to be made by Centrelink might have a permanently detrimental effect on retirees’ pension entitlements, Gold Coast President of Australians in Retirement Robert Glover has come out and said.

Many retirees receive Centrelink pensions while also having money put aside in superannuation in pension mode. Currently, when assessing a retiree’s pension entitlement, Centrelink applies a relatively favourable formula to the retiree’s superannuation, regardless of whether the super is in a Self-Managed Super Fund (SMSF), an Industry Fund, a retail super fund or any other superannuation structure. However, this method of favourable assessment is changing on January 1 2015 and in many cases, it will result in a reduction of pension payments.

Some pensioners, if subject to the change, could lose their pension entitlement entirely. Regrettably, a change in a pensioner’s circumstances at some point in the future will trigger the new form of assessment.

And these “triggering” changes can be somewhat innocuous. Some examples include:

• If your super is in pension mode with XYZ Industry Fund and you change it to ABC Industry Fund to get a better return.

• If your super is in accumulation mode in your own SMSF and at any time in the future you change it to pension mode.

• If your spouse’s super passes to you on their death but they have not nominated you as a reversionary pensioner.

• If you temporarily become ineligible for Centrelink (eg leaving Australia for an extended holiday) but then re-apply at a later date.

The changes that will be introduced in the new year could have a permanently detrimental effect on a retiree’s Centrelink entitlement. This issue will be fully explained and discussed by a Centrelink Financial Information Service Officer at the next meeting of Australians in Retirement, and if you wish attend, it is being held at 9:30am on Thursday, November 13 at the Broadbeach Seniors’ Centre, 23 T E Peters Drive on the Gold Coast, Queensland.

For more information or to register your attendance please contact Rob Grover at

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Alana Lowes

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