Is superannuation counted as an asset for the pension? Or is it forgotten about, pushed to one side and neglected like Tasmania is from the mainland? Just kidding, Tassie; I love you.
Well, depending on what you do with your super will determine whether or not it is counted for Age Pension purposes.
Is Superannuation Counted as an Asset for the Pension?
Superannuation is counted as an asset for Age Pension purposes if you have attained Age Pension age. If you have not reached Age Pension age, your super will only count as an asset under certain circumstances.
To ensure we’re clear from the outset, when we refer to superannuation, this should encompass all of your retirement savings held within a complying superannuation fund – whether it be in an accumulation account or income stream (pension) account. Superannuation is the umbrella encompassing both of these types of accounts.
Furthermore, when discussing the pension or Age Pension, I am referring to both the Centrelink Age Pension and the DVA Service Pension.
The assessable portion of your superannuation for Centrelink Age Pension purposes is determined by your age and whether it is in accumulation phase or pension phase.
Is a Super Accumulation Account Counted as an Asset?
If you are under Age Pension age, any balance held within a superannuation accumulation account is not counted for Asset Test purposes when calculating you or your spouse’s Age Pension entitlements.
If you are above Age Pension age, your superannuation is counted as an asset for Age Pension purposes, regardless of whether it is held in accumulation or pension phase.
Your Age Pension age is the age you become eligible to receive Age Pension payments. Your Age Pension age is detailed in the table, below:
Date of Birth Age Pension age
On or after 1 January 1957 67 years
Is a Super Income Stream Account Counted as an Asset?
If you have converted some or all of your superannuation into an income stream, including a transition to retirement (TTR) pension, the total balance of the pension account is assessed for Asset Test purposes when calculating you or your partner’s Age Pension entitlements – regardless of your age.
That is, once you begin drawing an income from your super, the total balance supporting that income stream becomes an assessable asset.
Can You Get a Pension If You Have Super?
Yes, you can get a pension if you have super. The amount of pension you receive will be based on how much super you have, as well as other assets, such as personal investments, term deposits and bank accounts.
Under the Assets Test, all of your assets are added together to determine how much Age Pension you are entitled to receive.
However, your Age Pension payments are not determined by your level of assets, alone. Your Age Pension entitlements are calculated by the application of both an Income Test and an Assets Test. Whichever test results in you being eligible for the lowest level of Age Pension payments is the test that Centrelink will apply.
These tests are dynamic tests and are assessed at any given time. It is possible, for example, to initially be eligible for a payment under the Assets Test and then be assessed under the Income Test some time later, due to changes in your financial situation.
This video explains how a person with a younger spouse can restructure their assets to reduce assessable income and assets:
How Much Money Can You Have and Still Get the Full Pension?
You can have up to $722,000, combined, in assets and still get the full pension if you are a non-homeowner couple; or $566,000 if you are a single non-homeowner.
The table below details how much money you can have and still get the full pension, based on your relationship and home ownership status.
| Homeowner | Non-Homeowner | |
|---|---|---|
| Single | $314,000 | $566,000 |
| A couple, combined | $470,000 | $722,000 |
| A couple, separated by illness | $470,000 | $722,000 |
| A couple, one partner eligible, combined | $470,000 | $722,000 |
The first two-hectares of your family home does not count towards the assets test.
It is important to remember that you will also be assessed under the Income Test, which may make you not eligible to receive the full pension.
How Much Can You Have in the Bank and Still Get the Pension?
You can have up to $1,283,000, combined, in the bank (or other assets) and still get a part-pension if you are a non-homeowner couple; or $938,250 if you are a single non-homeowner.
The table below details how much money you can have and still get the part-pension, based on your relationship and home ownership status.
| Homeowner | Non-Homeowner | |
|---|---|---|
| Single | $686,250 | $938,250 |
| A couple, combined | $1,031,000 | $1,283,000 |
| A couple, separated by illness | $1,214,500 | $1,466,500 |
| A couple, one partner eligible, combined | $1,031,000 | $1,283,000 |
The first two-hectares of your family home does not count towards the assets test.
Again, it’s important to remember that you will also be assessed under the Income Test, which may make you not eligible to receive a part pension.
Read More: How Much Can You Have And Still Get The Pension?
How to Reduce Assets for Centrelink
There are several retirement planning strategies designed to reduce assets for Centrelink in order to receive higher Age Pension payments. Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.
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Hi, I hope you enjoyed reading this article.
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Thanks for stopping by - Chris
