Ask an expert - Transferring super into allocated pension accounts
Can moving superannuation into a pension account affect a spouse’s age pension?
QUESTION
Robyn, 61, from South Australia, asks:
I am retired and have a super account which I understand pays 15 cents in the dollar tax. If I transfer it into an allocated pension account, therefore not paying the 15 cents tax, will it affect my husband’s Centrelink age pension?
Joshua Stega, director of Sydney-based boutique wealth management firm, Jas Wealth, replies:
Hi Robyn,
This is a really good question. You are considering commencing a pension from your current superannuation fund, which you correctly point out, will change the tax rate in super from 15 per cent to nil.
Centrelink uses two tests to work out the amount of age pension you are entitled to – the income test and the assets test.
From an assets test point of view, your superannuation balance will be counted towards your husband’s pension amount once you reach age pension age. This is where you are currently positioned.
From an income test perspective, once you start drawing a pension from super it will be assessable by Centrelink. In order to calculate the amount, Centrelink uses a defined formula which takes into account factors such as your super balance and life expectancy.
It is worth noting that from January 1, 2015, the income test treatment of income streams will change, so I would advise you to consider the best position for you prior to this date.
From here I would recommend you contact Centrelink’s Financial Information Service on 132 300. The Financial Information Service is a free, confidential service that provides education and information on financial and lifestyle issues to all Australians.
If you have a question on money or superannuation you would like a financial adviser to answer, please email contribute@oversixty.com.au