‘I’m about to inherit up to $100,000. How will it impact my Age Pension?’

Apr 12, 2019
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Losing a slice of the Age Pension can be the price of receiving a substantial sum of money. Source: Getty

Q. I will be 70 in July and am receiving the Age Pension. I live alone with no superannuation and my total assets a $4,000 second-hand car, a small amount of second-hand furniture. At the end of every fortnight, my bank balance is approximately $30-$40 if that. 

I’m expecting an inheritance from my late mother’s estate in approximately six months, with the amount being between $60,000 and $100,000. All I want to know is what is the maximum dollar amount I can receive before it impacts my pension, and am I allowed to spend the on myself and use it to pay back money that I’ve had to borrow funds over the years for a lot of medical and living expenses.

I’ve continually phoned Centrelink to ask this question but can’t get someone to answer my calls.  I’ve also looked up the Centrelink website and don’t understands everything I read, so it only  gives me further questions, which again leads to unanswered calls and frustration.

A.  You will be tested on an income and an asset test. The point at which the pension starts to reduce for a single homeowner is $258,500 under the assets test and $172 a fortnight under the income test.

The money in your bank account will be subject to the deeming test but under the current rates, total financial investments of $100,000 would produce a deemed income of just $76 a fortnight.

It would seem you are well under the cut-off points so, based on the information you have supplied, it would appear your pension will not be affected no matter what you do. My website has an Aged Pension calculator and a deeming calculator for readers who wish to do their own calculations.

If you have a question for Starts at 60’s money experts, email it to [email protected].

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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