The rules surrounding the treatment of income being paid from your superannuation pension has changed from 1 January, 2015.

Previously, for an account-based pension, Centrelink used the total sum of your pension payments for the year and would then subtract a deductible amount to work out how much income they consider. It does sound technical, but the net effect is that in most cases very little income (if any) is assessed from your account-based pension.

However, from 1 January 2015, these rules have changed.

Account-based pensions will be placed into the category of ‘financial investments’ which means the deeming rules will apply (Click here for more information on deeming). The likely result will be more income being counted by Centrelink against these types of accounts.

Not all people will be impacted in the same way. Many won’t notice any change since New Year’s Day as ‘grandfathering’ (i.e. passing-on of existing rules) will apply. This means that if you currently receive an income support payment from Centrelink, and you have an existing superannuation pension product, nothing should change.

However people granted a pension or allowance from Centrelink after 1 January 2015, will be assessed under the new rules.

How about if you hold a health care card?

If you hold a health care card such as the Low Income Health Care Card and Commonwealth Seniors Health Card, these changes will also impact on their assessment. For more details, please see my related article – 1 January 2015 Pension Changes.

Reg Grantham
Acorn Financial Services

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