Shortfall pension can cost you Centerlink benefits!

In the 2014 Federal Budget, the Federal Government announced that from 1 January 2015, the superannuation income stream will be taken into account in determining whether you are eligible to receive the Age Pension or the Commonwealth Seniors Health Card (CSHC).

You could lose your Centrelink benefits if ...

If the superannuation pension commenced prior to 1 January 2015 and you were also receiving the Age Pension at that time, your superannuation pension will continue to be treated under the old rules. Similarly, if you already hold a CSHC and are receiving a superannuation pension before 1 January 2015, you will not need to include a deemed amount which corresponds to the value of the tax-free component of an account based pension in your CSHC income test.

However, if your superannuation pension stops and new pension recommences after 1 January 2015, the treatment may change.

Moreover, if a fund fails to meet the minimum pension payment requirements in an income year, or the trustee exceeds the maximum annual pension payment limit (10% in case of TRIS pension), the super income stream will be taken to have ceased at the start of that income year.

Because of this, it is crucial that the trustees be aware of the social security consequences of stopping or changing a superannuation pension and monitor pension payments closely from 1 January 2015.

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DISCLAIMER: This information is an interpretation of rules, regulations and standards. It should not be considered as general or specific advice and neither purports, nor is intended to be advice on any particular matter. No responsibility can be accepted for those who act on the contents of this publication without first obtaining specific advice. Liability limited by a scheme approved under Professional Standards Legislation.