Mike Reynolds
Mike Reynolds

Director / Adviser


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Are you prepared for Centrelink account based pension rule changes?

From 1 January 2015, account based pensions will have new rules in place, changing the way Centrelink determines assessable income under the income test. The change means account based pensions may now be assessed under the ‘deeming,’ rules, the same assessment given to other financial assets such as shares, managed funds and bank accounts. Deeming rules assume financial assets earn a certain amount of income, and this ‘deemed’ income will now be included in the income assessment for Centrelink entitlements.  

Centrelink account based pensions

Who will it affect? 

The new rules will apply to account based pensions established from 1 January 2015. Account based pensions established prior to this will be ‘grandfathered’ for those currently in receipt of income support. This means the account based pension income will not be assessable for Centrelink purposes. Importantly however, this ‘grandfathering’ may be lost if income support payments cease any time after 1 January 2015.

Low Income Health Care Card (LIHCC)

From 1 January 2015 all Low Income Health Care Card recipients will have their ongoing entitlement assessed by Centrelink according to the new deeming rules. No grandfathering will apply, which may result in the loss of eligibility for some existing LIHCC holders.

Aged care entitlements

For self-funded retirees in Aged Care, deeming rules will apply to account based pensions, which may impact aged care fees. Those in Aged Care and in receipt of an income support payment will benefit from the ‘grandfathering’ noted above.

Commonwealth Seniors Health Care Card (CSHCC) 

Existing CSHCC recipients will have their assessment grandfathered under the current rules. All new CSHCC recipients after 1 January 2015 will be assessed by Centrelink according to the new deeming rules.

Maximising your Centrelink entitlements will help your hard-earned savings last longer, providing a significant boost to your quality of lifestyle in retirement.

If you, a family member or friend is concerned about how these changes may affect your Centrelink entitlements, please contact us to book a FREE Financial Health Check. 

General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.