Pension changes FAQ 47



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1st January 2015 Pension Changes FAQ


The upcoming changes in January to the way in which the Age Pension is assessed have definitely caused some confusion. With the deadline only weeks away, it’s important to know where you stand so you can plan accordingly for any change to your circumstances.

After receiving dozens of questions from the public, I’ve compiled a list of those most frequently asked on what is a tricky subject…even for the so-called experts!

Here it goes…


Q1 – I’m retired and have some funds in super and I am not drawing a pension. I don’t receive any payments from Centrelink and I don’t qualify for the Age Pension until after January 2015. Can I transfer my super into an account-based pension now so that it can be assessed under the current, more favourable rules?

The short answer is no. The ‘grandfathering’ (i.e. passing-on of existing rules) only applies to those currently receiving a Centrelink income support payment (pension or allowance) with an account-based pension product as at 1st January 2015.

For those who are granted a pension or an allowance with a super pension product after 1st January 2015 the assessment will be made under the new rules.


Q2 – I’m an Age Pensioner with one of these account-based pension products. I may want to add some funds to this account next year. Do I still keep the same grandfathering treatment?

I’m afraid not. Adding new funds to an existing account-based pension after 1st January 2015 would impact upon its grandfathering treatment. The pension account would be restarted with a new commencement date, once new funds were added.

This highlights the need to get professional advice before making changes to your super pension account.


Q3 – I’m not happy with my current super pension provider and I want to change to a new fund. If I keep all the same payments and details, can I change my super provider after January and still keep the grandfathering treatment?

Again, the answer is no. A move to a new provider would lose the grandfathering arrangements and trigger a fresh assessment under the new rules. This could be bad news and potentially cost you a decrease in your Age Pension, depending on your situation.

This may make for a tricky situation in some cases. For instance, if the performance of your super fund isn’t up to scratch, you can either stay put and cop the sub-par performance, or change super provider and potentially cost yourself some Age Pension.


Q4 – I have a low income health care card that doesn’t expire until late next year. If I’m not entitled to the card under the new rules in January, can I still keep my card until the expiry date on the card?

Not necessarily. With the changes to rules on 1st January 2015, all super income streams will be deemed from this date.

This means that people could start to have their cards cancelled within the first couple of weeks of the new year. Because this card is based on the last eight weeks of assessable income, you should know within a couple of months if you get to keep the card to the expiry date.


Q5 – If you’re a couple with each person having an account-based pension and one partner is an Age Pensioner but the other is yet to reach pension age, do both of your super pension accounts get the benefit of grandfathering?

You cannot rely on your partner to meet the rules. Both partners need to meet the grandfathering rules in their own right.

For example:

  • husband receives the Age Pension
  • wife is under Age Pension age and not in receipt of government support
  • each has an existing account-based pension
  • when the wife turns 65, she cannot claim that her account-based pension is also grandfathered as she was not on income support prior to January 2015.

Confused? You’re not alone. There are likely to be many more scenarios where people are affected. I’ve outlined just a handful. Please share your thoughts below.

Information provided in this article is general in nature and does not constitute financial advice. Before making any decision based on this information, you should assess your own circumstances or seek advice from a financial adviser. Wally David is an Authorised Representative (318432) of Wealth Managers Pty Ltd, AFSL No. 232701. 

Wally David

Wally David is a Certified Financial Planner® with over a decade of experience in the field of financial planning. He is the founder of and regularly appears in the media to comment for news stories, TV segments and other forums.

  1. Hold it, Abbott’s history he may change his mind again, he is most unstable & don’t know what he will do next!

    2 REPLY
    • He is more predictable than Rudd and Gillard ever were. That was just policy on the run, usually to the detriment of retirees.

    • God almighty, this is December 2014 another lifetime. Be in the present & Abbott is the leader now, and totally unreliable & underhanded.

  2. True, Carol. He could do 29 mental somersaults before 2015. We won’t find out till New Year’s Eve.

  3. Just think carefully if your in that position but at this stage of the game I agree with Carol, Abbott and this Government are very unstable, they could do anything. you get no sense of security with them..good luck

  4. We could put the Pension Age to 100, it does not change a thing, how can you work when there are no more Jobs??????

    4 REPLY
    • I know people who are 50 years old with a solid trade background who have lost their jobs since this Government came into power..they want to work, they still have kids at home to support and they can’t get jobs, so how would a 70 year old find work?

    • If we all want to work right now, we all can only work 15hr a week, but with that money what you will earn, nobody can pay a House, buy a car, pay for $100 000 for education!!!!!

    • By putting the pension age up to 70 they save money because people stay on Newstart (only 2/3 of the Pension and well below the poverty line) for 5 years longer.

    • I know people with a solid trade background who lost their job under Labor and at that time Labor extended the retirement age to 67. So much for looking after working class people. Absolute frauds. How would a 67 year old find work?

  5. I may be wrong and if this applies to you..check.. but I think has passed legislation, go to an accountant and get some advice

  6. My hubby is 63 and not ready to retire,he has 35 years plus in operating heavy earth machines,every job he now goes for now he is told he has not got the qualifications they need,only to find the little super market chick does,well hello,cause they are looking at his age,he is still fit,neat and tidy,not take days off,and do any job they throw at him,and we are supposed to work longer where

    3 REPLY
    • I know exactly where you’re coming from too.
      They put the pension age up… knowing full well we can’t get work because the young kids that do the recruiting won’t hire us. So… they put us on Jobsearch so they save approx $300 a fortnight.!!! What they don’t understand is that JS isn’t enough to live on so we’ll have to use some Super money which in turn will make most of us more reliant on receiving a full pension when the time comes…. which is very meagre if you’re renting. This will mean not only an aging population. .. but also a much more poorer one.
      Why are we… the ones that have worked & paid our Taxes to keep our country going be the ones to cop it? Politicians should take a cut in pay & ONLY be paid a normal pension like everyone else….. IF they qualify!!!

  7. Well I guess I’ll be working till I’m 90 because I don’t have enough in private super to retire on and I sure as hell don’t understand any of this stuff!

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