6 Common Myths
Myth 1: ‘You need to be retired before applying for the age pension’
There are a number of criteria that will determine if you are eligible for the age pension but retirement is not one of them. So as long as you meet the eligibility criteria such as age and residency, and you are within the means test limits, then there is no reason why you need to wait until you are retired to apply for the age pension.
Myth 2: ‘As a couple you both need to qualify for the age pension before applying’
Many people are not aware that if one spouse does not qualify, it’s still possible that the other spouse may be eligible. Most commonly this occurs where one spouse is not yet age eligible whereas the other is. But this can also happen where one spouse meets the residency requirements and the other does not.
Myth 3: ‘Centrelink know everything about you already’
Most people are surprised how much information about you Centrelink does not have. They do not have direct feeds to your bank or to the tax office. They do not know how much you earn each week or even if you are working. What they do know is what you tell them. This means that if you do not keep them up to date you run the risk of not receiving as much age pension benefit as you are entitled to or maybe even worse, is that you end up owing them.
Myth 4: ‘The hassle of applying for the age pension is just not worth it’
This is a common response given by accountants and financial advisers when their clients ask about the age pension. This is usually because they don’t want to admit they don’t understand enough about the age pension to advise on it. And the reality is they do not know who or where to send their clients to get the right advice.
Myth 5: ‘The cost of getting advice on the age pension is too much’
If you are one of the lucky ones who has found someone who is competent to give advice on the age pension, you can expect to pay anywhere between $100 an hour (My Age Pension) up to $350 an hour (your accountant, financial adviser or solicitor). Now even if your situation is complex and involves trusts, companies and interfamily loans, your adviser should be able to tell you if you might be eligible to access the age pension within a couple of hours. The cost of this initial advice may never be recovered if you do not proceed with the application. But if you do, then even if you are only entitled to a part pension, it is unlikely that you will ever pay more for the advice than what you will receive from the age pension over your lifetime.
Myth 6: ‘The Centrelink Officer you speak to when you call understands how the age pension works’
As a rule of thumb (which can be broken) the people on the phones have only a very basic knowledge of how the age pension works. This is because they are contractors who have being given very little training. Their role is to collect information from you and to update your details in the system. The system does the rest.
The people who do know what they are doing are the ones behind the scenes. Unfortunately there are not enough of them and they are just too valuable to be answering phones.
The only people that you can speak to in Centrelink that you can be confident that you are getting the right answers are the Financial Information Services (FIS) officers. To access a FIS officer you will need to make an appointment. FIS officers are in high demand so be prepared to wait a while for your appointment.
Of course the other alternative is to contact me at My Age Pension.