Education videos

Hello and welcome. If super has ever felt a bit confusing or something that you'll deal with later, you're definitely not alone. But here's the thing, even a little bit of knowledge now can help make a real difference to your future. Over the next few minutes, we're going to walk you through the essentials in plain English, what super is, how it works, and some simple steps that you can take today.

My name is Kim Hieronymus, I'm an Education Manager here at AustralianSuper and my role is to help you better understand how super works.

Now just before we jump in, a quick note that the video may include general financial advice which doesn't take into account your own personal objectives, your financial situation or needs. So it is important before you make a decision to consider if the information is right for you and to read all the relevant documents such as the product disclosure statement, target market determination and the FSG, which you can find on our website at australiansuper.com

So let's start with the basics. What actually is super? Well, in simple terms, superannuation, which is commonly referred to as super, is money that's set aside while you're working so that you'll have something to live on when you stop working. It is Australia's compulsory retirement savings system. It's a long term investment structured in a tax advantage environment.

It's preserved and is designed to provide your future retirement income.

So why should you care about super? Well, there's a few big reasons. First, super can be a really tax effective way to build your retirement savings over your working life. Now, the tax rates that are inside super are generally lower than what you'd pay outside of it, so your money has more potential to grow. Second, for a lot of people, super ends up being one of their biggest assets sometimes second only to the family home. Now that could be a pretty significant nest egg which is building quietly in the background. Third super is designed to give you an income in retirement. It's what helps you maintain your lifestyle in retirement when you're no longer working. And lastly, most eligible members get a basic level of insurance cover through their super which can help provide protection if something unexpected was to happen.

Now, if you're eligible, your employer pays a percentage of your income, so it's currently 12% into a super account for you. You can also choose to add extra on top if you'd like. Now, once the money's in your account, it gets invested across a range of assets to help it grow over time. Most of our members are invested in the balanced option, but you can choose which option or options your super is invested in.

Think of it as your future self income. It's your money, there are just rules around when you are able to access it. So generally you can access your super when you reach the age of 60 and you retire, or when you turn 65, regardless of whether you're still working or not.

Now let's look at what goes into super and what comes out because it's not just a one way street. So money in.

There's money from your employer, the employer super guarantee contributions, these are the main source. On top of that, you can make voluntary contributions either before tax or after tax from your bank account. And then there are investment returns which can help grow your balance over the long term. Now money out, there are fees and costs for managing your account.

There's taxes on contributions and earnings if you have insurance through your super,

those premiums come out, too. The amount that you pay on your insurance through your super depends on how much insurance you have and what your work rating is now. In periods where markets go down, negative investment returns can also reduce your balance. The key takeaway? Understanding these moving parts helps you keep an eye on your balance and make informed decisions.

So when can you access your super? This is one of the most common questions I receive. When can I actually get my super? Now, the general rules are pretty straightforward. If you're 65 or older, you can access your super whether you're still working or not. If you're between 60 and 64, you can generally access it if you've retired or left an employer. These are sometimes called conditions of release.

There are also some limited circumstances where you may be able to access your super earlier, like severe financial hardship, compassionate grounds or the first Home Super Saver scheme. But these are special cases and there are strict eligibility rules that apply to these, so for full details you can check that out on the AustralianSuper website.

So what are the types of insurance cover?

This is something a lot of people don't realise, that you may already have insurance through your super. AustralianSuper provides most eligible members with basic insurance cover automatically and there are three types to be aware of. Death cover, total and permanent disablement and income protection.

The key thing here?

Is to check whether the cover you have actually matches your current situation. Are you paying for cover you don't need, or do you need more than you've got? You can access more details on insurance by reading the Insurance in your Super Guide, which is available on our website at australiansuper.com/insurance Guide. You can also calculate an estimate of your insurance needs by using the Insurance Calculator.

On our website, that's a great way to estimate not only how much coverage you should potentially have, but how much is your cover going to cost.

So your investment options, when it comes down to how your super is invested, you actually have a say when you join AustralianSuper. If you don't make a selection, your super goes into the premixed balanced option by default. And for a lot of people that works really well, but it's worth checking whether it still suits where you're at in life.

Your comfort with risk. How long until you retire?

And whether your circumstances have changed since you last looked at it. At AustralianSuper there are three categories of insurance investment options. There's the PreMixed, the DIY Mix options and the Member Direct. So head to our website to explore what's available and see what might work best for you.

Who gets your super? This next one is really important, and it's something a lot of people put off. But nominating who gets your super if something happens to you is really important. Your super doesn't automatically form part of your estate, so it's worth making sure that your fund knows who you'd like your super to go to, and there's a few options here.

Including binding non binding.

And reversionary nominations. Whichever option you choose, the important thing is to have something in place and keep it up to date.

It can be a good idea to check your payslips to make sure that your employer is paying the right super guarantee amount and if you change jobs, consider taking your Superfund with you as you could be paying fees on multiple accounts. The Australian Tax Office or the ATO. They actually provide an online tool called MyGov. Now you can use MyGov to see all of your super accounts across different funds, which includes an option.

To consolidate these if that's what you choose to do.

And help make it easy for you, easy for yourself. Download the AustralianSuper app or log into your online account and keep track of your balance. Go and check your insurance and manage your details all in one place.

So today we've covered the basics, but this is really just the starting point. If you'd like to explore these topics in more detail and get your specific answer specific questions answered, we'd love to see you at one of our upcoming live webinars. Our experts cover everything from investment strategies through to retirement planning, and you'll have the chance to ask questions in real time, so head to australiansuper.com/webinars

To see upcoming sessions and register. Thanks for watching and we look forward to seeing you at a webinar soon.

Hi, I'm Jason Voss from the Member Education department of AustralianSuper and today we're going to have a look at how you pay yourself in retirement. One of the biggest shifts people face in retirement. It isn't just financial, it's psychological. For most of your working life, income straightforward, get paid regularly and you organise your life around that rhythm. But in retirement that regular pay stops and income starts coming from different places.

Super savings, maybe the government's age pension. That change leads to a really common question, which is how do I actually pay myself now? And that's exactly what we're going to walk through today. How retirement income works, how people commonly structure it, and how to build an approach that feels both comfortable and sustainable.

But before we jump in, just a quick note. This presentation may include general financial advice which doesn't take into account your personal objectives, your financial situation or your needs. So before making any decisions, make sure the information is right for you and that you've read the relevant product disclosure statement and the target market determination, which you'll find on the AustralianSuper website.

So where does retirement income actually come from? In Australia there are generally four building blocks. Super, your personal savings, your investments and maybe the government's age pension. Most retirees don't rely on just one. It's usually a mix, and that mix can change over time as your circumstances evolve. The people who tend to feel the most confident retirement have three things in common. They know roughly how much they need to live on,

they've set up a regular income and they understand their approach can be adjusted along the way, so the aim isn't to get it perfect from day one, it's to create enough structure that the income feels predictable and manageable.

As I said, retirement income doesn't unlock all at once. It happens in stages. While you're working and under the age of 60, your super is building for you in the background. And then from the age of 60, your options start opening up, including a transition to retirement income strategy if you're still working, or a retirement income account if you stop working. From the age of 65, the rules simplify even further. And then from age 67, you may all also become eligible for the government's Age

Pension and the key takeaway from all this is that income is flexible and that it evolves over time.

In terms of what you can do with your super when you retire, you can leave it where it is, you can withdraw it as a lump sum, or you can take it as a regular income. You're also not limited to an option, of course. You can take your super in a variety of different ways, but you've got to note that there will be different tax implications that you may want to get to consider.

Now many retirees prefer a regular income because it creates that familiar rhythm of getting paid. With an account based pension, generally you can transfer some or all of your super into a retirement income account. If you're 60 and over, these payments are generally tax free and your balance then remains invested and continues to earn returns whilst you draw that income.

Now to open a retirement income account, you simply transfer money from your super and there's usually a minimum amount that you'll need to transfer. And from there you can choose how often to receive payments, whether they're fortnightly or monthly, quarterly or even annually. And you can also take additional lump sum payments if you need them as you need them. Payments are made simply into your bank account, so it's nice and easy, similar to wages.

So the government's age pension.

There's three main requirements.

Age obviously, you need to be at least age 67.

Residency, you need to be an Australian resident that's generally having lived here for at least 10 years, and you must pass both the income and the assets test. Now, even if you're not eligible now, that can change over time as your circumstances change. You can find the full details on eligibility at servicesaustralia.com.au and we also run a live webinar that's just on this topic. It's worth looking at.

Okay, so when it comes to the age pension, Centrelink looks at both your income and your assets, and whichever one reduces your payment the most is the one that applies, of course. So it's not just one number, it's a balance between what's coming in and what you own. This is called means testing. There are two parts and the income. The assets test will look briefly at. Now the income test looks at money coming in like wages, rental income, business income, pensions and investment income, which Centrelink often estimates financial assets using deeming, so it's worth understanding deeming. The assets test, on the other hand, looks at what you own, things like investments, super and pension accounts, and personal assets like cars and boats, etc. However, your family home is generally not included. Both tests work on a sliding scale, so your age pension usually reduces gradually as your income or your assets increase doesn't just stop suddenly.

Although you need to be aware that there are cut off limits that do apply.

Now the work bonus. What is it? Well, the work bonus allows you to earn up to $300 per fortnight from employment without affecting your pension. Fantastic. Unused amounts can build up, you know, balance, which can then offset future earnings. And this means really that retirees can work part time with reduced impact on their age pension.

That's the work bonus.

Once you understand the work bonus, the next question is usually about tax, which is if I go back to work, won't I lose most or all of my pay to tax? Well, that's where the seniors and pensioners tax offset or SAPTO, which I'm going to call it from now on, can help. SAPTO can reduce the amount of tax that you pay in retirement. For some people working part time or casually, it can mean paying less tax than expected or even no tax depending on your circumstances.

All ground today. If you'd like to explore things further, I'd suggest you join one of our live webinars. Where you can actually ask questions in real time. Our experts cover retirement planning, super strategies and much, much more. To register, it's simply a case of heading to australiansuper.com/webinars and we'd love to see you there.

You may have heard of the Government Age Pension, but what exactly is it? How do you know if you're eligible? The Age Pension is a regular payment from the Australian government. It's paid every fortnight to help cover your living expenses in retirement. For some people, it's their main source of income. For others, it's used to help top up their super and other savings.

Before we jump in, Please note this presentation may include general financial advice which doesn't take into account your personal objectives, financial situation or needs. So before making any decision, make sure the information is right for you and also read the relevant Product Disclosure Statement and Target market determination, which you'll find on the AustralianSuper website. The Financial Services Guide is available at australiansuper.com/representatives

So who's eligible? Well, there are three main things to consider. Firstly, age requirement. You need to be at least 67 years old to qualify for the age pension. Now some people think that they can't receive it while they're still working, but that's not always true. There's no rules that say you must be fully retired. So once you reach age 67, you may be able to apply whether you're still working, working full time, part time or not working at all.

You can also launch your application up to 13 weeks before you turn 67.

Second is residential status. Now in most cases you need to be an Australian resident. You also need to have lived in Australia for at least 10 years and with at least five of those years in a row. There can be some exceptions depending on your circumstances.

And then thirdly, the income and the assets test. Now the age pension, it is means tested, which means Centrelink looks at both your income and also your assets. Now a helpful way to think of it is like a set of scales, both your income and your assets, they get assessed and whichever one reduces your payment the most is the one that's used to work out how much you can receive. So there are two main parts to this process.

Now, firstly with the income test.

This looks at all sources of income, not just what you earn from a from a job. Now this can include things such as income from work, whether that's part time, a full time, part time or casual.

Rental income from properties, business income or profits and also other payments such as pensions or overseas income. Now it also includes income from your financial investment. Now for these, Centrelink uses something called deeming. This means that they estimate how much income your investment earns based on its value, their value, rather than what they are what you actually receive.

Now let's talk about the assets test. The assets test looks at the value of what you own. Now this can include things such as financial investments, so shares, investment properties, bonds. It includes your super and pension accounts, lifestyle assets, cars, boats, other belongings, and also gifts that you sometimes give that you've given away. Now some assets aren't counted. It includes your family home in most cases.

A certain funeral and burial arrangements and sometimes your partner's super if they are under the age pension age.

So both the income, the income tests and the assets tests are applied and whichever test results in the lower payment is the one that Centrelink uses to work out how much you receive. What's important to remember is that your eligibility can change over time as your income or your assets change. For more information or to apply visit Services Australia's website. You can also have a look at Centrelink's website where you'll find.

The Age Pension calculator to help estimate your eligibility as well.

Now, there are a few common misconceptions about the age pension, so let's clear up some of those.

Now firstly, people think that age pension is an all or nothing payment, but it's not always the case. It actually works on a sliding scale, so depending on your circumstances you could receive a full pension, a part pension or none at all. Another misconception is that if you're not eligible now, you never will be. But that's not true because your eligibility can change over time as your income, your assets or even the thresholds change. So even if you don't qualify at one point, it's always worth checking in again later on.

Now many people worry that if they take more money out of their super, their age pension will go down. But in many cases it's actually it's not about how much you withdraw, it's about the value of your assets. Because remember, Centrelink often uses something called deeming. This means that they estimate the income from your investments using a set rate rather than your actual withdrawals. So taking a bit more income, it doesn't always have the impact that people expect.

Now some people assume that if they don't qualify for the age pension, they may miss out on all government support. But you may still be eligible for benefits such as the Commonwealth Seniors Health Card, which can help with cheaper medicines and also other concessions.

And finally, many people think that working in retirement means that they are not eligible, that's not always the case. There is something called the Worth bonus which allows you to earn up to a certain amount from work without immediately reducing your age pension. Also, any unused amount can build up over time and this gives you more flexibility to do part time work.

There is also the seniors and pensioners tax offset.

Which may help reduce the amount of tax you pay in retirement. If you're unsure of how this applies to your situation, there is support available. So Services Australia, they offer FIS officers, which stands for Financial Information Service Officers and they can help you understand things such as how the income and the assets tests work.

How your super and investments are treated and what it could mean for your age pension.

It is a free service and they are there to explain your options in a clear and also simple way.

We also run live webinar on this topic which explore these key areas in a bit more detail. We also include real life case studies worked examples and also you have the opportunity to ask questions. You can register at australiansuper.com/webinars

Thanks for watching and I hope to see you at one of our upcoming webinars soon.

If you're approaching retirement and wondering how to make the most of your super, this video is for you.

Today we're going to talk about something called Transition to Retirement, or TTR for short.

It's a strategy that could give you more flexibility and control in the years leading up to retirement.

Before we jump in, just a quick note, this presentation may include general financial advice which does not take into account your personal objectives, financial situation or needs. So before making any decisions, make sure the information is right for you and have a read of the relevant product disclosure statement and target market determination, which you'll find on the AustralianSuper website.

So what can a TTR income account actually do for you?

In a nutshell, it gives you the option to start accessing some of your super while you are still working.

That might mean reducing your work hours and using your TTR income account to top up your pay. Or it could mean easing into a retirement lifestyle on your own terms, picking up new hobbies, travelling a bit more, or simply having more time for the things that matter.

It can also help ease financial pressures during that transition period. Instead of going from full time work to fully retired overnight, you get to adjust gradually.

And here's one that surprises a lot of people. TTR can actually help you grow your super savings. We'll explain how that works shortly.

To be eligible, you need to have reached your preservation age of 60 and still be working. If that sounds like you, keep watching.

Whilst there are a number of ways you might consider using a TTR strategy, I'm going to focus on two ways today. The 1st is the save more approach.

This is where you use your TTR alongside any salary sacrifice contributions to grow your super balance faster and potentially pay less tax along the way.

You keep working the same hours, but your money works harder for you.

The second is the work less approach. This is where you reduce your hours and use your TTR income to make up some or all of the difference in your take home pay.

You get to enjoy a bit more freedom now without having to stop working full time.

Some people even combine elements of both. The right approach depends on your own personal situation, which is why getting advice can be really valuable.

Let's have a look at the work less option and how that works in practise. First you transfer a lump sum of at least $10,000 from your existing super account into a new TTR income account. This is a once off transfer to get things started.

Your employer continues to pay super contributions into your super account as normal, and your regular income from work still goes into your bank account.

The difference now is that you also have your TTR income account which pays you a regular income on top of your wages.

And here's the great part. Once you're over age 60, that TTR income is completely tax free.

So if you decide to drop a day of work each week, your TTR payments can help bridge that gap.

You get more time for yourself without necessarily feeling it in the hip pocket.

If you look at the save more option now, employer pays contributions into your super account and your income goes into your bank account.

The setup is similar, you still transfer at least $10,000 from your super account into a new TTR income account, and your employer contributions and income continue as before. But here's where it gets interesting. With the Save More strategy, you make additional contributions into your super, often through salary sacrifice. This means a portion of your pre tax salary goes straight into your super, which is taxed just 15% instead of at your marginal tax rate.

At the same time, your TTR income account pays you a tax free income to help offset the reduction in your take home pay from those salary sacrifice contributions. And the net effect you could end up with more money going to super, paying less tax overall and still taking home a similar amount each week.

It's a strategy that can really add up over time, especially if you have a few years until retirement.

Keep in mind though, that minimum and maximum annual withdrawal amounts do apply to a TTR income account.

To open a TTR Income account you will need to be aged between 60 and 64 and still be working. You'll need to transfer at least $10,000 from your super savings to your TTR Income account.

To keep your super account open, you'll need to leave at least 6 thousand $6,000 in it.

Each financial year you will receive payments of between 4% and 10% of your total TTR income balance and to learn more about TTR income, look at australiansuper.com/TTR

When you retire or stop working for an employer and tell us, we'll switch your TTR income account to a Choice Income account.

When you turn 65, this will happen automatically.

With Choice Income, your investment returns are tax free and there's also no maximum income payment amount.

However, your account balance will then count towards your total or your transfer balance cap, which is a lifetime limit on the amount of super you can transfer into any tax free retirement income accounts.

This was really just a high level overview of how TTR works. If you'd like to go a little bit deeper, see real examples and understand where TTR could work, we'd love you to join us at one of our live webinars. In the webinar, our experts will walk through detailed case studies so you can see exactly how TTR plays out in practise. You'll also have the chance to ask questions in real time.

If you're interested, head to australiansuper.com/webinars to register.

Once people move into retirement, the questions we hear from members often change their focus. Many are no longer asking about when they can retire, but are instead asking things like am I getting the right amount of age pension?

What happens if my circumstances changed and what other support is available to me now?

We're now going to focus on those common questions we hear from members living in retirement, particularly around the government age pension. To help unpack these questions, I'm joined by Kris Tiberi, Financial Planner who works closely with members everyday. Kris supports members through all stages of retirement planning from pre-retirement strategy and income planning to understanding how superannuation fits into life after work. He is known for translating complex financial concepts into clear, straightforward advice that empowers clients to make confident decisions. 

Now, just a reminder that the information we're covering in this section is general information only, and before making any decisions, we recommend seeking personal financial advice.

AustralianSuper has engaged Industry Fund Services Limited IFS to facilitate the provision of financial advice to members of AustralianSuper. This advice is provided by financial advisors who are authorised representatives of IFS.

Kris. Thanks for joining us now what got you into being a financial planner? As a kid, I always enjoyed the concept of investing and money and all that sort of stuff. And financial planning was this up and coming thing back when I went to university and I started a unit in it and I saw the impact that it was sort of having on people. At the time my grandmother was retiring, when I was at university and she sort of went and spoke to a financial planner, and it is quite instrumental in sort of setting her up for retirement and allowing her to retire early in it. I sort of thought to myself, this would be something I really enjoy doing is talking to people about money and retiring and structuring their assets and these types of things. So that's, that's what got me into it. 

Yeah. When I was a kid, I wasn’t investing. I was just spending, if I had any money at the time.

So, in your experience, Kris, what is the most common question that members have about the government age pension from members? It's more in around work. I think it's the first question they come to us with. A lot of members may be looking to transition to retirement but don't want to.

Give up work fully and there's not a great level of understanding between the relationship between working and getting an age pension. I think members still see it as an all or nothing, wherein I guess it's our role as the financial planner to educate them to say that age pension or being eligible for an age pension doesn't mean you have to stop work.

So I think that's the big one that members really want to engage on is well, I want to continue to work maybe in a reduced capacity, can I still get some eligibility to that age pension. So that may be the first thing. The second thing they then want to ask is the relationship between their financial position and the ability to get an age pension, so.

I think the second thing we like to do then is maybe explain the asset and the income test in a in some language that the members can understand. So it's, typically those two questions that we sort of start with that then rolls off into I guess some more specific questions, the other ones gifting as well. Members sort of heard a little bit around, you know, this punishment perse of giving away assets once their age pension mode. So they want a little bit of understanding around there because again, members are looking to support either at all children or their grandchildren throughout their retirement as well. 

So it's getting knowledge about something they don't really know about. Well they've heard about and qualifying age for the age pension yeah, so 67 so.

The government lifted the qualifying age to for everybody to now 67. So that's male and female. And just to I guess for a bit of information for members out there, you can make an application up to three months before your 67th birthday. So maybe something to watch out for their don't maybe wait until you've had your 67th birthday, start making preparations leading up to your birthday, Yeah. And they've got to be proactive Centrelink don't come to the correct you don't get the birthday card saying happy birthday, you're over. Age pension, age. Come over. Chat to us. You know you've got to go any good to start that process yourself with the age pension. Many members I speak to find that it's just sitting. Forget that's going to be the same. Not true. No, not true.

Centrelink want to know changes to your personal circumstances. So I guess fleshing that out a little bit more, what they're really looking for is material changes to your asset position in particularly. So that's either your income position or the value of your assets. They really want that communicated to them. So if you have a windfall, you inherit.

The money, it's incumbent on you as the recipient of your age pension to let Centrelink know that 'cause they're not going to know that you know, great Aunt Effie passed away and left you $5,000. So you've got to let them know any changes to your acid and income position. The other one where people are quite knowledgeable on is travel.

So we're seeing more and more of our members now travelling, particularly travel overseas are Centrelink want to know if you're heading overseas for more than six weeks. It shouldn't impact on your entitlements and less if you're leaving Australia permanently, but they do want to know when you're leaving, how long you going for and when you plan to come back. So that's just.

Ensure that you've got some continuity payment and more importantly, Centrelink knows what your plans are around travel. I guess the other one is people restructure their affair. So they might change a super provider, they might make some big changes to their financial position. Again, Centrelink and not going to be aware of that. You've got to tell them when you make those types of big changes to your circumstance. Now you mentioned their, their assets income changing, but the government also has thresholds that change as well as they index them in line with CPI. Yeah, exactly. So again, got a lot of members who in retirement maybe renovate the family home, don't want to big trip overseas these types of things.

Again, I'll be encouraging you if you if you're doing those things and you have this type of spending to, to let Centrelink know because a lot of members we do see they are part age pensioners and those types of material changes in asset position can really have quite a favourable. I guess how come for members. So I'd encourage members to speak to Centrelink when they've got those asset changes because it could result in an uplifting in age pension entitlements and I suppose with those changes my position thresholds I may not have been eligible for the pension in the past. Now I am, it's up to me to find out. Absolutely. So I think again that can be a little bit confusing for members is I've gone through the process before I wasn't eligible, Centrelink wouldn't let me know when I become eligible. That's not the case. I guess it's a, it's a separate assessment process every time you go through Centrelink. So really it's very common for members to spend their assets in retirement and we encourage that, that members are out there enjoying their best retirement from their assets.

So just keeping that in the back of the mind that you know, I may have been ineligible for an age pension initially under that asset test. But as I spend my assets on my retirement and maybe my best interest to go back to Centrelink just to double check that I might be eligible because as you pointed out, they do index a lot of these thresholds in March and September of every year as well. So even if you maintain the same assets, but that there is a likelihood here that at some point you become eligible for an expansion. Yeah. So it's definitely not set and forget, definitely not setting forget. 

Kris, Another common question I get from members is if I start drawing down on my super, I'm going to lose my pension. Yeah, I think it's a common misconception.

And there's not a lot of understanding really income tests the government since 2015 and tried to simplify this for all older Australians in the sense that what you draw from your superannuation is not what is encountered as I guess income for Centrelink purposes. So certainly give something called a deeming rate. So I might use an example, might be a bit easier. So we've got $100,000 in income stream account and AustralianSuper. Whether I draw $5,000 a year from that income stream or I draw $20,000 a year from that income stream, Centrelink assess the income the same and ignore that drawdown amount. So they use something called the deeming rate to say that $100,000 of assets is deemed to earn income of X. So they're more interested in the value of the asset that you hold, not how much you're drawing from it. And also they don't then worry about how much that asset went up or went down. Whether they went from $100,000 to $120,000 or down to $80,000, it's that deeming on the income that determines where you fit on that income test. 

Absolutely correct. So again, using the same example, it goes from $100,000 to $110,000. The deemed rate would be the same if went from $100,000 to $105,000. So it's it they're not looking at how much you earn on your money or draw from your money, they just looking at the value of that asset. Yeah, 'cause many members are worried and I'm taking $30,000, $40,000. It doesn't count. It's that deeming rate. They need to be aware of. 

Absolutely. Now you mentioned before gifting because sometimes retirees find themselves in the position where they can give some money away to support family, for example.

There are some rules around how the government assessors what you give away. There is. So there's a couple of tests here. So there's really two types of spending. There's normal spending and then there's gifting. So I think taking a step back, gifting is not renovating your home or gifting is not going and buying yourself a car or going on a holiday with you and your partner if you're a couple for Centrelink purposes, that's normal spending the same as buying the groceries. Gifting really is where you're giving an asset to someone else and you're receiving no material benefit for that.

So think of, you want to go to Bali and it's you and your wife and you want to take your two adult children with you. If you pay for their flight to Bali, there is no material benefit to you in doing that. That would be a gift for Centrelink purposes. So it's that I guess giving of assets to someone else or an experience to somebody else they're trying to capture here, so they do limit that. So they say $10,000 in a single financial year is the amount that you can do from a gifting perspective, but they do limit it to $30,000 over 5 financial years. And timing then becomes really, really important because if you gift in April and then in May you could inherently go over the gifting threshold in that single financial year. So just be mindful that it's that July to June type time frame and when looking to make gifts. 

So the government is not limiting what I can give away. They're just saying giveaway X will only count.

The difference between X and $10,000 is still counted as an asset. Yeah. So it's a deprived asset. So you're exactly right. Centrelink don't limit the amount that you can gift. They just limit the amount that they will waive from your asset and income assessment. So if you want to give $15,000 in a single year, that's OK. If that's what you want to do it Centrelink will allow you to I guess reduce your asset position by that $10,000 and that $5,000 of excess gifting in that financial year becomes something called a deprived asset, which essentially just means is that is that remains your asset paper for five years. 

So for members joining us today, what we have practical example of giving away money and Centrelink are going to use this gifting rule. So we're in May now. So $100,000 in the bank. I've given away $15,000 to my adult son. My bank balance as of today is now $85,000, but in the eyes of Centrelink I have $90,000. So the way that it works is $100,000 less $10,000 is the allowable gifting amount. So Centrelink it's $90,000, but my actual bank balance shows $85,000. And that difference of $5,000 is the deprived asset. It's the gifting amount in excess of the $15,000 that financial year. So under the income and asset test assessment for Centrelink, I'll be assessed at $90,000 in the bank as opposed to the $85,000 that I actually have. How long do Centrelink continue saying I've got that $5,000 I gave away? Yeah, so we are in May now. So five years from May will be the time frame that they assess me is having that extra $5,000 in my bank account. 

So again, you mentioned before timing is essential with the tests that Centrelink apply. Yeah, absolutely because it's done by financial year. So this way good planning can make sure that the impact of this gifting on members can be minimised. 

Now Kris was spoke about the age pension and it comes with an age pension concession card.

But members ask about other cards available, whatever some of those other cards that people can get and are there different eligibility rules? Yeah. So the pension concession card is the card that comes with age pension, but there are other cards that are available and I think the two most common cards that we see some members are entitled to first and foremost is the low income health card. So the pension concession card requires you to be age pension age, so 67 for male and female. The low income health card doesn't have an age limit on it. So people of any age can get a low income health care card. We're talking adults here, not children.

But in essence, what the low income health card was brought into address is those people who maybe retire before 67 and become low income earners within I guess their retirement years. So it's a, it's a bridge between their retirement date, which might be 60 and age 60 when there.

Or 67 when they be going to become age pension eligible. So it's very similar to the pension concession card. It's really designed to reduce the cost of medication primarily through the Pharmaceutical Benefits scheme, but it does afford some other benefits in the form of some cheaper rates, cheaper rego, those types of things. 

Another card which is more for people of age pension age, but maybe a self funded retirees and not eligible for an age pension because of either the income or the asset test is the Commonwealth seniors health card. So the Commonwealth seniors health card like the low income health card is income tested, but the income test is a lot higher.

That threshold is quite high and again, that was bought in by the government to sort of reward those people that maybe had self under their own retirement, not eligible for an age pension, but still wanted to give them I guess some benefits to primarily the Pharmaceutical Benefits scheme again, but there's also some other ancillary benefits that that card can provide. 

So I think it's looking at your own individual circumstances first and foremost. How old am I? If I'm 60 plus maybe retired, am I eligible for that low income health card? If I'm 67 and getting an age pension, well, I've got my pension concession card. And if I'm over 67 but not eligible for an age pension.

I'm looking at something like a Commonwealth seniors healthcare and lock the age pension. I've got to apply for it. I've got to go to send link, fill out the form sold out online to get those cards. Absolutely Ann again. They will ask you what cards are applying for because the application process for all three cards is different. So it's just something to keep in the back of mine. Sounds like a lot of work applying for these cards.

But is it going to be worth it in the end for me to spend my time apply? I think it comes back to the individual member, but a lot of the members we see there is a lot of value in these cards. Medication is really expensive, so getting access to the Pharmaceutical Benefits scheme in a lot of members instances is really beneficial.

Financially for them and then the discounts in particular from the low income health card and the pensioner concession card can be quite significant in the form of a said that we're talking discounted registration that's a that's a big expense and discounted rates electricity these types of things as well. So again we see when we budget with members that these are the big ticket expense items that sit in their budget. 

So any form of I guess lifestyle relief in what is a pretty expensive time in Australia at the moment, I think is absolutely worthwhile. And it's not like Akashi anything to apply other than time. So it's there, there's no application fee or anything like that. So I would absolutely encourage members to go in and make an application for those cards. So maybe a bit of pain for again, yeah, long term gain and especially Commonwealth seniors health care that one is really quite simple to retain compared to the low income health care card. There is a renewal process that Centrelink will put you through to make sure that you remain eligible for that card. But again, if you're eligible at the time and you don't have significant changes to your circumstances overtime at the renewal process is quite straightforward it’s all online now. 

So government pension concession cards, Federal level, but there are also potentially state cards available depending on where you're living. Absolutely. So this is where I think people get a little bit confused. That's already got one of those and they pull out the state card and I say.

Well, now that's, just a state card. What we're talking about here is that is the federal card. So yeah, I'd encourage members to do a bit of research on these cards because, you know, if you enjoy discounted counter meal at your local hotel or something like that, those cards again can provide really meaningful benefit over the long term. Yeah. And it's reducing costs. Costs it's all about reducing cost yeah we unless you love paying Vic Roads the full rate for rego and that brings you excitement I'd really encourage it to explore these cards because it can carve a significant amount out of peoples budget, which leaves more for them to go and enjoy some of the more exciting components of their retirement spending. 

Now Kris we’ve spoken about reducing costs. What about the stuff I've already got? I've got lots of assets. I've got a big family home. Alot of members go through that process of downsizing, Sea change, tree change, retirement village. How does that all impact potentially on Centrelink?

Yeah. So this is a really important consideration for members. As you broadly point out, the asset of the family home sometimes is their biggest asset in conjunction with sort of superannuation. So decisions around that asset can have some material outcomes to retirement funding. I think the first thing we should maybe call out is that the government, I mean, a lot of instances provides an asset test exemption to the family home when it comes to Centrelink. And that's, I guess it is understood, but maybe not in the context of, well then if I sell that, what then happened? So let's take a step back. 

So essentially I live in $1,000,000 home. It's on a standard suburban block in Australia. When I go into Centrelink and I record my assets and income for Centrelink purposes, whilst they asked me about that home, they don't count that against me from an asset and income perspective. If I was to then sell that $1,000,000 home and I move into a $700,000 home, I now have $300,000 of assets which Centrelink are going to want to know about. So if that's sitting in a bank account, if that's in a super fund, with an investment manager, whatever I do with that money provided I don't put it into the new home Centrelink are going to assess that as an asset for Centrelink purposes and deem that asset to earn income.

So it could have an impact on the amount I get from Centrelink so that that decision to downsize can impact on my cash flow position. So again, maybe understanding that before that decision is made, I'm thinking about doing this, what impact will have on my individual circumstances is prudent. And then that would come out in the discussions you have with a member about future plans for the 5-10 years down the track. How's it going to affect me then? 

Absolutely and then the other thing to be wary of is there are different rules and treatment around retirement villages. How much money is being put down to go into these types of villages can get a little bit complicated. So again, I'll just encourage members to maybe discuss their individual circumstances with either Centrelink or a financial planner just to get, I guess, a real clear lay of the land.

Tips to what will happen come, I guess that downsizing type of end because the last thing we want to see here is, you know, full age pension recipient, you know, tracking really, really well from a cash flow perspective, maybe just need a little bit more capital out and then you go and make a decision and it really compromises that at age pension payment and an put you off in a worse off position from a cash flow perspective. Kris we spoke about people who make a decision to do something. What about when decisions are forced upon someone? They got to move into aged care and suddenly throwing a whole new world of Centrelink forms and rules. How do you help people through that? Yeah, I think the best starting point.

Is there's a lot of emotion in those situations and in a number of instances actually not the member that's having to make these decisions. It might be the children of the member under sort of a power of attorney type arrangement. So there are there is support out there, there's age care specialist offices that do offer the opportunity for members and their children to meet with somebody face to face to really talk through those decisions. So I think taking a step back, selling the family home, it's a significant life event. So I would just encourage members to reach out for support, whether that's an age care specialist, one of these specialists through I guess the age care system or financial planner.

I think discussing or walking through the options I think is absolutely prudent. So it’s that preparation again of this is the action. What are the implications? Yeah, because again a lot of people towards the end of their retirement years that they may be that full age pensioner and unlocking any amount of capital from that family home through that, that lifestyle type event, it is likely that it could have an impact on, on that age pension position. So I think just knowing that first and then there's age within age care, there's a whole host of rules and regulations and that sort of stuff. So I think getting your head around that, just say that you're informed around the decisions you make.

And reaching out for support from those organisations, yeah.

Finally, Kris, we've spoken about a lot of things. A lot of people might be feeling a bit overwhelmed. What would be your top five tips for this process. So I guess start with getting a reference number for Centrelink. A lot of people don't have one. So what does that involve? That involves going to Centrelink, taking your identification documents and saying ‘I’m Peter and I'm here to claim my age pension’, so Centrelink will issue you with that customer reference number.

And once you've got that reference number, that's really the first step.  I think that the second step is to apply early. So get ready early. So I'm turning 67 in August or September, 3 months up to my 67th birthday. I can make that application for an age pension. So start nice and early because Centrelink won't back date you if you wait till you're 70 to make an application. So I think that's really, really important. 

Further as to that, don't make the assessment yourself. I think we've given a lot of, I guess, general information today, but ultimately it sent Lee to make the decision. So if you don't ask, you can't receive. So I'd really encourage members to ask the question around.

Am I eligible for an age pension? Do the assessment? The worst they can say is no, it's not a black mark against you forever. It can be revisited overtime, which I think is the next thing I'd really encourage members to do, especially those have already made an application and maybe been declined, is to revisit, I guess, that application process.

The indexation across March and September, because inflation is been a lot higher than maybe previous years. Those indexation amounts of have gone up quite a bit. So maybe revisit whether I've become eligible again. And the other one is I've been on a pension for 20 years and I've never been back to Centrelink. I'd really encourage those members.

To go back in and have a chat to Centrelink, especially if their asset position has reduced overtime, it's likely that they're being underpaid from an age pension perspective. So just making sure you're on the right amount of payment is really important as well.

Thanks, Kris.

As we've heard from the expert's retirement doesn't mean that everything has to be locked in forever. It's about knowing that life will change. But there are places to turn to for support when this happens. Whether it's questions about Centrelink, concession cards, housing, aged care or support options, you don't have to navigate it alone.

We hope today's conversations help you feel more informed, more reassured, and more confident about the choices that you have now or those that lie ahead.