Inspirational Case Studies

Pension Case Study

The rules surrounding the Age Pension are constantly changing, making it difficult to know whether you are maximising your entitlements. This makes it essential to seek professional financial advice to help analyse your Centrelink entitlements so that you are not missing out on benefits you have every right to claim. The following case study illustrates what a difference this can make.

Bob and Marge increased their pension by nearly $200 per fortnight.

Bob is 65 and about to retire. Marge is 60 and already retired. Bob has $350,000 in super and realises that these funds will need to be used to meet their income needs in retirement. In addition to the super, they had a range of other investments and lifestyle assets (eg a car) totalling $165,000.

If Bob invested his super  into a super pension to receive a regular income, he would be entitled to an Age pension of $347.05 per fortnight which is an extra $9,023 per year to help meet their living expenses.

Fortunately, Bob and Marge were wise enough to consider that there may be more than one way to structure their situation. They went to see a Seagrims Financial Planner, who identified that a super to spouse strategy would work very effectively in their situation.

By cashing out some of Bob's super and investing it in Marge's name, they would be able to increase Bob's Age Pension entitlement to $539.80 per fortnight. That's an extra $5,012 per year of pension that would not have been achieved if Bob and Marge had not sought advice. The key issue was that Marge was not yet pension age, so any super held in her name was exempt from assessment by Centrelink until she turned pension age in 5 years time. As a contingency plan, they could still access Marge's super at any time, tax free, to help meet their living expenses.