Retire with a bigger age pension

It may be possible, if you act quickly. Currently, superannuation account-based income streams are treated differently under the income test. But from January next year, the deeming rules that apply to financial investments will be extended to account-based income streams, also known as allocated pensions and account based pensions. This change means that all financial assets will be assessed under the same rules.

You may have the chance to improve your financial position by locking in your pension before the change. To qualify, you must retire, be assessed for a Centrelink age pension and convert your super to a First Super Pension before the change on January 1, 2015. Note you must contact First Super before December 19, 2014 to take advantage of this opportunity.

How it works now

Income from your superannuation is treated differently to other financial investments, such as bank accounts, shares and investment properties. This allows some of your superannuation pension, called the ‘deductible amount’, to be excluded from the age pension income test. This amount may allow you to secure a larger Centrelink payment.

Every person’s deductible amount is different. It is calculated using the allocated pension purchase price and your life expectancy factor. The deductible amount will continue to be used in your age pension reviews in future years.

How it will work after January 1, 2015

Income from your superannuation will be treated the same as your other assets, such as bank accounts, shares and investment properties. This means the allocated pension purchase price, together with your other financial assets, will be included in the age pension income test deeming calculation. The allocated pension account balance, plus your other assets, will be included in future age pension reviews and may result in adjustments to your age pension.

Read more to help you understand how these changes could influence the amount of age pension you can receive or how you may benefit.

Don’t miss out – act now

To understand what the changes will mean for you and to potentially get a better retirement outcome, make an appointment with one of First Super’s experienced and qualified financial planners. Your first meeting with a First Super financial planner is free.

Contact First Super before 19 December 2014

Call 1300 360 988 Email mail@firstsuper.com.au

This publication was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as trustee of the First Super superannuation fund (ABN 56 286 625 181). The information is not investment advice and does not take your personal circumstances into consideration. You should consult the product disclosure statement (PDS) before making any decision. Content was accurate at the date of issue, but may subsequently change. You should contact First Super on 1300 360 988 for updated information and to obtain a copy of the PDS.