Super not counted as an asset until age pension kicks in

Q I am 64 this month and will be eligible to go on to the age pension. My husband has two allocated pensions, with Centrelink counting $111,136 as an asset. He is drawing down the minimum pension of $695 a month. I have $86,787 in superannuation. Our other assets total $33,000 and our car and contents are worth $12,000. How are we affected by the income and assets test?

AA couple who own a home can have up to $252,500 in assets and still get the full pension. The total of your assets is $242,293 and as such will not affect the amount of age pension you receive.

Under the income test a deeming rate of income is applied to financial assets. These include bank deposits, shares and superannuation where a pension is not being taken. For a couple the deeming rates are 3 per cent for the first $70,000 and 4.5 per cent on the balance.

In your case, the assets counted for deeming total $119,787. The deemed income for these assets is $167 a fortnight.

The amount counted as income by Centrelink is this deemed income plus the assessable part of the super pension your husband receives.

The assessable super pension is calculated by deducting the purchase price of the pension from the amount being received. The purchase price is calculated by dividing the value of the superannuation when the pension started by your husband's life expectancy at that time.

If your husband began his super pension at age 65 before January 1 this year, his life expectancy would have been estimated at 17.7 years. If his superannuation at the time the pension began was worth $130,000, the purchase price would be $7345 a year, leaving an assessable pension of $995 a year or $38 a fortnight.

This would give you total income for Centrelink purposes of $215 a fortnight. A couple can earn up to $248 a fortnight under the income test and still get the full pension. This means you will not be affected by either the income or assets test. By starting a pension from your super fund, the income counted by Centrelink would be even less.

QMy wife and I are both over 65 and receive a fortnightly combined Centrelink pension of about $980. We own our house and have combined assets of about $240,000, which includes $185,000 in super, most of which is invested in term deposits. With the price of gold going up, I thought about opening a metals account with the Perth Mint. What implications will investing in gold have on my pension?

A It would appear you are not now receiving a pension from your superannuation fund. As a result, the value of your superannuation counts as an asset and this value would also have the deeming rates of income applied to it. By investing in gold, this should not affect the amount of pension you receive, unless it dramatically increases in value.

You should consider starting an account-based pension from your super fund while investing only a portion of your available cash in gold. Gold is a growth asset and does not produce income. If too much is invested in gold, and your super fund is paying a pension, you may have to sell the gold or other investments to fund the minimum pension.

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