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Pension changes 2015 – What is changing from 1 January 2015?


| by Wally David, CFP®

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The rules that deal with the treatment of incomes being paid from your super pension (i.e. account-based pension) are changing from 1 January, 2015.

Currently for an account-based pension, Centrelink use the sum of your pension payments for the year and then subtract a deductible amount to work out how much income they count. It sounds technical, but the net effect is in many cases very little income (if any) is assessed from your account-based pension.

However, from 1 January 2015, these rules will change.

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 everyone is impacted in the same way. Many won’t notice any change come 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 super 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 card?

If you hold a health 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.

Wally David, CFP®
Financial Planning Matters

Wally-David-2-291x300

Wally David, CFP®

Financial Planning Matters
Authorised rep of Wealth Managers Pty Ltd (AFSL 232701)
www.financialplanningmatters.com.au

I’m a proud husband and father and I advise people on money for a living. I’ve been doing this money thing for over a decade and have a keen passion for educating people on their options by simplifying information into everyday language and cutting to the chase. I try and avoid fancy words and jargon, and present information in a way that helps you make smart decisions with your hard-earned.

 

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