Anyone of pension age who is providing care for someone who is sick or has a disability that prevents them from working is eligible for the Age Pension or the Carer Payment.
But which one should you choose?
The Age Pension provides income support as well as access to concessions. There are also further incentives, such as the Work Bonus, to help pensioners boost their income.
A Carer Payment also offers income support and, as long as certain conditions are met, is available to anyone under Age Pension age who is looking after someone with a disability, someone who is frail, aged or has a debilitating medical condition.
There are similarities between the Carer Payment and the Age Pension, such as:
- the rate of payment (depending on your financial circumstances)
- both are assessed according to income and assets tests
- the Age Pension is taxable; the Carer Payment is also taxable once the carer or the care receiver reaches Age Pension age
- both are eligible for a Pensioner Concession Card
- rent assistance rates are the same, except if you’re single and share privately rented accommodation.
Once you reach Age Pension age, you can choose to keep receiving the Carer Payment or switch to the Age Pension.
To be eligible for the Carer Payment, you will need to be an Australian residents and pass income and assets tests.
To be eligible for the Age Pension, you need to be Age Pension age, currently 67, meet residency rules and pass income and assets tests.
While the payment rates are the same, there are some differences you should know before making your decision.
How are they different?
If you get a Carer Payment or an Age Pension, there are some different rules.
You can work volunteer, study or train on the Carer Payment for up to 25 hours a week, including travel time, and income will be subject to the income test.
There is no limit to the amount you can work, volunteer, train or study on the Age Pension, but any income may affect your rate of payment.
Under the Carer Payment rules, the income and assets of the person you are caring for will be assessed by Centrelink if they are not receiving Centrelink or Department of Veterans’ Affairs payments. This does not apply if you are on an Age Pension.
Centrelink may review your circumstances if you are on a Carer Payment to check you are still eligible.
If you are on the Age Pension and receiving the Carer Allowance, Centrelink may also review your circumstances. You will not be reviewed for any caring duties if you are on the Age Pension alone.
Under the Carer Payment rules, if you take a break from caring or the person you are caring for goes into hospital, you can take a break from caring for up to 63 days each calendar year. This won’t change your Carer Payment. If you stop providing care for more than 63 days, Centrelink may cancel your payment. You can also have 63 additional days off from caring per calendar year. This is if the person is in hospital temporarily and you still help with their care.
If you take a break from caring and you are on the Age Pension, it will not affect your payments.
For people on a Carer Payment, if you get a Carer Payment on 1 July, you’ll be eligible for an annual Carer Supplement. This supplement is $600. You’ll get the Carer Supplement each year for as long as you remain eligible. If you get a Carer Allowance on 1 July, you’ll be eligible for a further annual Carer Supplement. You can get up to $600 for each person you provide care for.
If you are on the Age Pension, you won’t be eligible for Carer Supplement but you will get a Carer Supplement for each person you get a Carer Allowance for.
People on Carer Payments may get a higher maximum rate of Rent Assistance if they are single and share privately rented accommodation.
Conversely, if you are on the Age Pension you may get a lower rate of Rent Assistance if you are single and share privately rented accommodation.
If you study and get a Carer Payment, you may get a Pensioner Education Supplement and an Education Entry Payment. You will not be eligible if you are on the Age Pension.
People eligible for Carer Payments whose last job was casual or contract work may have to wait up to six weeks to get a payment under the rules for seasonal work preclusion period rules. These rules do not apply for age pensioners.
If the person you were caring for dies
If you are receiving a Carer Payment and the person you are caring for dies and you were not their partner, but their partner receives a Centrelink pension, Department of Veteran’s affairs Service Pension or Income Support Supplement, you are not entitled to a lump sum bereavement payment, however you may continue to receive the Carer Payment for up to 14 weeks.
If you are on the Age Pension and the person you were caring for dies and you were not their partner, then you are not entitled to any bereavement payments and you will continue to receive the Age Pension.
If you are receiving a Carer Payment and the person you were caring for dies and you were not their partner and their partner was not on Centrelink or Department of Veterans’ Affairs support, then you may receive a lump sum bereavement payment and may continue to receive the payment for up to 14 weeks. You will then need to consider transferring to another payment such as the Age Pension.
However, if you are on the Age Pension and you are not the partner of the person you were caring for and their partner was not on a Centrelink or Department of Veterans’ Affairs support, then you are not entitled to any bereavement payments but can continue on the Age Pension.
If you are on the Carer Payment and the person you were caring for was single then passes away you may receive a lump sum bereavement payment and you will continue to receive the Carer Payment for up to 14 weeks. You will then need to consider transferring to another payment such as the Age Pension. If you are on the Age Pension in the same circumstances you are not entitled to any bereavement payment and will continue to receive the Age Pension.
You could contact a Services Australia Financial Information Service officer for assistance.
Does this help you decide which payment works best for you? Why not share your experience in the comments section below?
Also read: Most common Age Pension mistakes (and misunderstandings)
Financial disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.
Unfortunately in south Australia, the state government takes the rent relief we get from the commonwealth govt from those of us who live in a co-op house. Well done politicians, rip it off us. I bet it wouldn’t be so easy to take it from you.