Don’t leave money on the table: How to claim your age pension sooner
Many Australian retirees are missing out on thousands of dollars in government benefits simply because they delay applying for the Age Pension. Research by Aware Super found that 32% of retirees wait at least a year longer than necessary to apply – some delaying for two to three years after they become eligible. The reasons? Confusion, misinformation, and the daunting task of dealing with Centrelink.
But delaying could cost you. Every dollar of pension you claim is a dollar of your own savings you don’t have to spend. With longer life expectancies and rising living costs, it makes sense to claim what you’re entitled to as early as possible. Here’s how to make sure you don’t leave money on the table.
1. Understand the rules – You may be eligible sooner than you think
Many retirees assume they aren’t eligible for the Age Pension because they’re still working part-time or have too many assets. But the reality is, Centrelink’s means testing is more generous than many expect:
- A homeowner couple can have up to $1.04 million in super and other assets (excluding their home) and still receive some pension.
- A non-homeowner couple can have up to $1.29 million in assets.
- Income testing allows couples to earn up to $1,911 per week before losing the pension entirely.
2. Apply early – Even if it feels overwhelming
Many retirees delay applying simply because the process seems too complicated. While Centrelink paperwork can be time-consuming, taking the time to apply sooner rather than later can lead to thousands in additional benefits. If the process feels overwhelming, consider:
- Getting help from a financial adviser who specializes in retirement planning.
- Using Centrelink’s Financial Information Service for free guidance.
- Asking a trusted family member or friend to assist with the paperwork.
3. Don’t forget the Commonwealth Seniors Health Card
Even if you don’t qualify for the Age Pension right away, you may still be eligible for the Commonwealth Seniors Health Card (CSHC), which has a much higher income threshold – $99,025 per year for couples. This card provides valuable benefits, including cheaper prescription medicines, bulk-billed doctor visits, and energy rebates.
(Read our article: New rules mean you can get a Commonwealth health card on $90,000)
4. Review your eligibility annually
Just because you don’t qualify at age 67 doesn’t mean you won’t in the future. As retirees start drawing down on their super and other assets, their financial position changes, potentially making them eligible for benefits they didn’t initially qualify for. Make it a habit to review your pension eligibility each year.
5. Think long-term: Your retirement could last 30+ years
With one in four people aged 65 today expected to live beyond 95, securing every financial advantage possible is crucial. Claiming the Age Pension early and preserving your own savings can provide greater financial security and flexibility in retirement.
The Bottom Line
The Age Pension is not just for those who are struggling – it’s a valuable entitlement designed to help all Australians make the most of their retirement. If you’re eligible, don’t delay. Take action today to claim the benefits you deserve and ensure a more financially secure future.
Navigating Centrelink’s system is complex and we recommend that you seek professional advice or help, such as an accountant or financial adviser, to ensure a successful application.
Lastly, it’s important to understand Centrelink’s process and be persistent. Thorough preparation of necessary documents can be crucial to expedite the process and application wait times.
What readers are saying
Based on comments and feedback from this article, there are five common themes discussed by over 60s. These comments reveal a broad debate on the Australian pension system, reflecting frustrations, ideological divides, and policy concerns. Below is a summary of the main themes and perspectives discussed:
Universal vs. Means-Tested Pensions:
Many commenters argue that Australia should adopt a universal age pension, similar to systems in the UK and New Zealand, where all retirees receive a pension regardless of income or assets. Supporters believe this would be simpler, fairer, and more cost-effective to administer. Others counter that a universal pension would reward those who didn’t save, while penalizing self-funded retirees who planned for their future.
Fairness and Entitlement:
A key point of contention is whether the pension should be seen as an entitlement for all taxpayers or as a safety net for those in financial need. Some retirees feel they have “paid their dues” through lifelong tax contributions and deserve pension benefits, while others argue that tax revenue funds broader services (e.g., healthcare, infrastructure) and not just individual retirement. This debate extends to perceptions of fairness in government spending, with some feeling that self-funded retirees are unfairly excluded from pension-related perks.
System Complexity and Barriers to Access:
Many retirees share frustrations over navigating Centrelink’s complex bureaucracy. Some report long wait times, excessive paperwork, and unclear eligibility rules that deter them from applying. Stories highlight elderly individuals struggling with online applications, making multiple attempts to claim a pension, or ultimately giving up due to frustration. There is a recurring sentiment that the system is designed to be difficult to reduce payouts.
The Role of Superannuation:
Some commenters argue that Australia’s superannuation system was intended to replace reliance on pensions but has failed in execution. Concerns include government mismanagement, excessive fees, and the fact that many retirees still require pension support despite super savings. Others believe super has been a success, allowing responsible individuals to remain independent in retirement, but feel that it is unfairly taxed or regulated.
Behavioral Incentives and Policy Effects:
A recurring complaint is that the current system discourages financial responsibility. Some argue that people are gaming the system by deliberately structuring their assets to qualify for the pension, while others believe hard-working, self-funded retirees are unfairly penalized. There is concern that pensioners receive benefits (e.g., discounted healthcare, aged care costs) that self-funded retirees miss out on, making pension reliance a more attractive option.
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