Accessing the age pension and the impact of super

By Grace Ormsby

July 14 2020
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Services Australia has released a new statement to explain how an individual’s age plays a role in whether superannuation is assessed for the purpose of income and assets tests.

According to the government department, how superannuation is assessed depends on a person’s age and whether or not they are drawing an income stream from the fund.

First of all though, it’s worth noting your age of eligibility for the age pension – this will have the most impact as to whether or not your superannuation will be considered as either an income or an asset.

What age can I receive the age pension?

If you were born between 1 January 1954 and 30 June 1955, your age pension age is 66 years old.

Anyone born between 1 July 1955 to 31 December 1965 will not be able to receive the age pension until they are 66 years and 6 months, with this rule coming into place from 1 July 2021.

For individuals born on or after 1 January 1957, the age pension will rise to 67 years – with this group of people able to access the age pension on the date they turn 67 from 1 July 2023.

If you are under age pension age:

For anyone who is under the age pension age, Services Australia has indicated that it will only count your super as part of your income and assets tests if your fund is paying you:

A super pension; or
An income stream

But if you withdraw your super, this may change.

While taking money out of your super doesn’t affect any Centrelink payments, what you do with the money may have an impact.

For instance, this money will be counted in your income and assets test if you:

Use it to buy an income stream, or
Put the money in the bank, or
Buy another financial investment

If you have reached age pension age:

When you have reached the age where you are able to access the age pension, your super will be counted in both the income and assets tests, with the income test assessing your super as part of your financial assets.

Deeming rules will also be used to work out a deemed income amount.

The assets test will consider the balance on your latest statement, if it’s invested in an account-based fund, or the number of units multiplied by the latest unit price if it’s invested in a unitised fund.

Services Australia has also highlighted that the same rules apply to your partner and their super if they are of age pension age.

The rules even apply where they may not be getting a payment from Centrelink.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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