Financial Planning can prepare you for Centrelink changes in Mount Gambier

Posted on 23/12/2016 by Jon Pegler in Audit & Advisory
Jon Pegler
Jon Pegler is a Senior Financial Planner within the Sinclair Wilson Investment Services team.  Based in the Mount Gambier office, Jon provides his clients with advice on a broad range...

Centrelink benefits are a complex area and, as my job title suggests, I’m here to help with Financial Planning. You should also consider me your expert resource for assistance navigating the Centrelink system in Mount Gambier. I can explain all the rules, conditions and provisos and ensure you receive your maximum entitlements.

Some major changes will be introduced in the near future which may affect Aged Pensioners and Youth Allowance recipients. Make sure you consider these changes if your future plans involve receiving one of these benefits. If you’d like personal advice, seek out a qualified and informed Financial Planning professional.

Changes to the Pension Assets Test
Significant changes to the Centrelink Pensions Assets Test are to be introduced from January 1 next year. If you are retired or nearing retirement, the changes could impact your plans. The changes are:

  • The lower assets test thresholds for both homeowners and non-homeowners will increase, giving a small number of pensioners (around 50,000) an increase.
  • The assets test taper rate for the pension assets test will double from $1.50 per fortnight to $3.00 per fortnight per $1,000 of assets over the asset free area. The Government estimates this will see 91,000 part pensioners lose their pension entirely and another 235,000 have their pension reduced.
Lower Asset Thresholds Upper Asset Thresholds
Current Proposed Current Proposed
Single homeowner $205,500 $250,000 $779,500 $542,500
Couple homeowner $291,500 $375,000 $1,156,500 $816,000

These changes have been legislated and will take effect from January 1 2017. A pensioner couple who own their own home and have assets above $451,500 will see their pension fall – in this case by as much as $14,467 per annum. It is important that people who might be affected consider their options now to minimise impact on their overall cash flow.

Changes to Independent Youth Allowance
Prior to the election, the Coalition proposed potential changes to Independent Youth Allowance for gap year students. Of particular benefit would be the reduction of the self-support period from 18 months to 14 months. These changes have yet to be introduced to parliament and it may be many months before any positive change is seen in this area.

It is important that students considering Youth Allowance as a means of support, consider all options open to them prior to leaving school. A well considered strategy can make all the difference.