CHANGES TO THE ASSESSMENT OF SUPERANNUATION ACCOUNT-BASED INCOME STREAMS
Many of our retired clients would have received a letter from Centrelink in September regarding changes to the assessment of superannuation account-based income streams. Below is a summary of the basic changes to Age Pension assets tests as of September 2014 and the new deeming rules that apply from 1st January 2015.
Account-based income streams (superannuation pensions, annuities and allocated pensions or annuities) have been treated differently from other income for Age Pension purposes as they have been considered a return of capital. Centrelink uses a special formula to calculate the income amount so as to not double count the income. As of the 1st January 2015 the treatment of super pensions when assessing the Age Pension income test has changed, but only for anyone receiving the Age Pension for the first time or an Age Pensioner receiving a super payment for the first time. All pensioners with income products in place before 1st January 2015 will continue to have that income assessed under the existing rules for the life of the product, unless they choose to change the superannuation pension product.