How super affects eligibility under income and asset tests

Q My husband is eligible for a pension in August I draw a $400-a-month pension from my superannuation fund, which is an industry fund. Is my pension counted as his income when he applies for the age pension?

ASuperannuation is counted by Centrelink when a person is eligible for the age pension. For males this was originally 65 and for females it was 60. Changes have been made so these age limits will be 67 for everyone born after December 31, 1956.

For males born after June 30, 1952 the qualification age increases from 65 to 67 in half-yearly increments. For females the pension age is currently 63.5 for those born before January 1, 1946 and increases to 65 for those born between January 1, 1949 and June 30, 1952. After July 1, 1952 it increases to 67 for females in the same increments as for males.

Once a person reaches age pension age both the assets and income tests are applied. Before then the value of super is not counted as an asset. Your super can be counted under the income test.

Q I am 61 years old and have not been able to work for the past five months because of illness. My working days may be over and I have applied for a disability pension due to my incapacity. I have $100,000 in super in my own self-managed fund that at present is just sitting in the bank.

Can I legally leave this money in the bank at a good interest rate and use the money from the interest like a pension to supplement my disability pension? I have researched several super funds to roll the money into and the fees really eat up any good benefit, which is why I am considering the bank.

AAs you have a self-managed fund the regulatory body you are accountable to is the Tax Office. You can leave your money in your fund earning interest and take the income as a pension as long as it meets the minimum payment standards. The pension you take will be counted as income by Centrelink. The actual amount counted will be the gross pension you receive decreased by the purchase cost of the pension.

Q My husband and I were born in 1966 and have a small business. Will we be able to retire and get the pension when we turn 60? We have no super as we have always put our money back into the business or our house. Will we be able to have our home and a small holiday house close by?

AYou will not be eligible for the age pension until you are both 67. The amount of pension you receive will be affected by the income test and the assets test. Your home will not be counted as an asset but the value of your holiday home and all other assets will be. These other assets include your cars and household furniture. The full pension is paid to a couple with assets up to $252,500 and the pension cuts out with total assets of more than $975,500.

Questions can be emailed to max@taxbiz.com.au

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