Allocated Pensions Explained

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2 Comments

  1. Susan Brown

    Hi Chris,
    My husband and I both receive the age pension. I work occasionally (2-3 days a fortnight ) and report fortnightly. I will turn 70 in a couple of months and I want to take the full lump sum from my super. It is a little over $100,000. We desperately need to spend a significant amount on our home as it is in need of updating so we can enjoy it in our future. My husband has $150000+ in super which as yet, has not been touched. I know that my super will not be taxed but 50% of the amount above $100000 is taxed marginally. Will this withdrawal effect our age pension significantly?

    Reply
    • Chris Strano

      Hi Susan, generally all withdrawals made by a person aged over 60 are received tax free. The exeption to this is if your balance includes a taxed (untaxed) component. You should ask your super fund this. I’m not sure what you mean by 50% amount $100k is taxed marginally. However, to answer your question, if the withdrawal is made as a lump sum and immediately spent on your home, it should not be assessed for Centrelink purposes. In fact, you will effectively be reducing your investment assets and therefore may be eligible for more Age Pension benefits. You can see here https://www.humanservices.gov.au/individuals/topics/lump-sums-while-income-support/28961 that Centrelink do not assess one-off lump sum withdrawals as income, just ensure it is not taken as pension payment if you have a grandfathered pension.
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