July 3rd 2024.
A couple in their 70s recently found themselves in a unique situation - they had won the lottery, but in doing so, they lost their aged pension. Determined to find a way to have their cake and eat it too, they sought the advice of finance expert Noel Whittaker. The couple wrote to him, explaining that they had placed their winnings in a high-interest savings account and were now no longer receiving their full pension. They planned to use the money to buy a new house and make improvements to their current home. They wondered if there was any way they could have avoided losing their pension.
Whittaker responded to the couple, congratulating them on their good fortune and encouraging them to enjoy the money they had won. He also shared some information about the age pension in Australia, just for fun. For example, he clarified that not all Australians are entitled to a pension - there are eligibility criteria, including residence rules, income and assets tests, and an age requirement. He also explained that the maximum rates for singles and couples are $1020.60 and $1538.60 per fortnight, respectively, with additional supplements available for utility and medicine costs.
The couple was particularly concerned about how much money they could have and still receive an age pension. Whittaker explained that there are both income and assets tests that determine the amount of pension one can receive. Income can come from a variety of sources, such as wages, investments, and superannuation, while assets include things like real estate, cars, and money given away. The cut-off point for receiving no pension is $2444.60 for singles and $3737.60 for couples, while the cut-off point for a full pension is $314,000 for homeowner singles and $470,000 for homeowner couples.
One common misconception about the age pension is that it will eventually be abolished as Australia's population grows. However, this is not true. The age pension was never intended to be replaced by superannuation, but rather to supplement it and provide financial support for those who need it. Both major political parties strongly support the age pension, as it is a crucial part of the welfare system and abolishing it would have dire consequences. In the words of former Prime Minister Bob Hawke, "The pension will always be there for those who need it."
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