Could you be missing out on an increase in Age Pension payments?
Retirement expert and independent financial planner Nick Bruining says there is a blip in the system that could mean you’re missing out on valuable income.
Mr Bruining says Services Australia may be using outdated valuations to calculate payment rates for the Age Pension and other Centrelink payments and, as a result, part age pensioners may not be getting their full entitlements.
Services Australia requires account-based pensions (ABP) – a superannuation investment that pays regular retirement income – to supply data on how their investments are performing.
The ABP data is usually sent to Services Australia in February and August, but there is no set date and it can vary between providers.
Services Australia uses the data to calculate entitlements and the change in balance can significantly affect part-pension payments.
For example, Mr Bruining explains, under the Age Pension assets test, each $1000 over the lower limit decreases the amount of pension payable by $3 a fortnight. For example, an increase of $40,000 for an assets-tested pensioner will result in a decline of 40 times $3 – or $120 – a fortnight.
See the assets limit for the Age Pension here.
Naturally, with dips and highs in the stock market, investments can vary.
Currently, the Australian stock market is tracking quite low because of the collapse of the Silicon Valley Bank, concern about the US banking sector in general and high inflation.
As a result, any ABP fund with investments in the stock market has probably been devalued since February, but there is no legislative requirement for Services Australia to recalculate your entitlements as a result of that fall.
However, ABP holders can ask online for a recalculation.
Simply log into your ABP account and check the balance. If it has fallen, there should be a file available on the site titled ‘Centrelink schedule’ that you can print out or upload.
Next, log into your Centrelink account via myGov. Go to the ABP balance on record and if this is higher than the actual balance then you can upload the schedule obtained from your ABP account.
Centrelink should then recalculate your entitlements.
If the Centrelink balance is lower, the system has not been updated and you should let it be.
If you are struggling to upload the files or update your information, your ABP provider should be able to help. Alternatively, ask them to post a copy to your Centrelink office and follow up with a visit to update your details.
Do you regularly check your account-based pension balance? Have you had your payments adjusted as a result? We’d love to hear about your experience in the comments section below.
Also read: Are you owed some of Services Australia’s ‘lost’ Medicare millions?
Whilst I generally agree with this very sound advice, I would differ in one regard.
If your balance has fallen and you wish to update your Centrelink figures PHONE or VISIT Centrelink with the update. If you just upload the information it may (as I have been advised on a couple of occasions) be months (if ever) that anyone in Centrelink will look at it!
Centrelinks document upload facility is, apparently, there for when Centrelink ask you to upload documents.
This is great advice, thank you Peter. Yes, Centrelink can certainly be a bit tardy in updating information, it’s much better to follow through yourself.
Two months and one week Ihave bee waiting for an update but on the positive side I cannot update either and that is a positive.