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This month, Centrelink released new benefit and payment rates for the Age Pension, effective from 20 March 2021. Single clients receiving the maximum Age Pension will benefit from an increase of $8.40 per fortnight and partnered clients will each receive an increase of $6.30 per fortnight. As a result of this increase the means test disqualifying rates have also increased.
Changes to payments rates will effect the Age Pension, Disability Support Pension (except if aged under 21 without children), Carer Payment, Aged Service Pension, Invalidity Service Pension and Partner Service Pension.
Maximum pension supplement and energy supplement(per fortnight combined)
Clients who were previously not entitled to a benefit and were marginally above the upper income and/or asset test threshold may now be entitled to a benefit which could also entitle them to a Pensioner Concession Card.
Now is good time to review your clients who may have previously just missed out on the Age Pension and assess their eligibility again.
Asset test disqualification limits
The lower asset test threshold being the amount of assets from which entitlements begin to phase out remains unchanged.
The lower income threshold being the amount of income from which entitlements begin to phase out remains unchanged.
Despite this small increase, the new maximum Age Pension falls short of a modest or comfortable lifestyle based on the Association of Superannuation Funds Australia (ASFA) estimated budgets for various households and living standards for those aged around 65.
*Based on estimated budgets for various households and living standards for those aged around 65. Estimated budgets for older clients are lower.
To this end clients cannot rely solely on an Age Pension to achieve a modest or comfortable lifestyle and will likely need to draw on personal savings to achieve their desired way of living.
If you’d like more information, please speak to your IOOF Client Solutions Manager.
For more information on the assumptions and methodology of ASFA Retirement Standard please see their ‘Detailed budget breakdowns – December quarter 2020’.