Optimise your Centrelink/DVA entitlements

By November 10, 2014 September 6th, 2019 No Comments
Optimise your Centrelink/DVA entitlements

Changes to rules for those who receive income from superannuation through an Age Based Pension.


If you are, or soon to be, receiving Centrelink/DVA entitlements (such as the Age Pension or Commonwealth Seniors Heath Care Card) you may be in for a nasty surprise in the New Year.

During March 2014 Parliament passed legislation to apply the deeming income test to Account Based Pensions (ABPs) that are paid from your superannuation from the 1st of January 2015. This could adversely affect your entitlements and reduce the amount of income you receive in the future.

Currently income from ABPs paid from a superannuation fund is only counted towards the income test if the annual payments are above a non-assessable amount. Should you be drawing the minimum required pension payments then this often results in no income from your pension being counted towards assessment.

However, from 1 January 2015, any ABP commenced or any individual recently entitled to receive benefits, will have their ABP subject to deeming under the income test. Applying the deeming rules to ABPs means that any payments taken will be ignored for income test purposes.

Fortunately, ABPs commenced prior to 1 January 2015 will be ‘grandfathered’ and will continue to be assessed under the existing rules for the life of the pension, unless a change in the ABP product occurs, such as a commutation and rollover to a new provider.

Modelling suggests that grandfathering is useful in the early years but not necessarily indefinitely. For many, there will come a time where the deeming method provides a superior result than the current treatment and this may drive a deliberate switch to the deeming rules.

There is no change to the assets test treatment of ABPs, with them continuing to be treated as an assessable asset.

If you would like to find out more about deeming of Account Based Pensions or Financial Planning, please contact HTA Advisory and arrange a meeting with our Financial Adviser, Scott Millson.

HTA Financial Planning Services are provided by Scott Millson, Authorised Representative of Australian Unity Personal Financial Services Ltd AFSL 234459


HTA Wealth

HTA Wealth

We help our clients exceed their financial goals so that their risk is managed while creating a lasting legacy. Ben Seeger & HTA Wealth Pty Ltd are Authorised Representatives of Australian Unity Personal Financial Services Ltd ABN 26 098 725 145, AFSL No. 234459, 114 Albert Road, South Melbourne, VIC 3205.

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