Allocated Pensions Explained

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4 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.
      Related Posts
      What is a Grandfathered Pension?
      Pension Grandfathering Rules

      Reply
  2. Desmond Sullivan

    Hello Chris.My wife and i ,both age 82 closed our self managed a/c based pension fund last year.
    we transferred $300K to Australian Super income stream pension fund
    We were receiving monthly payments which were funded by the earnings until the covid -19 panic and our balance was being eroded.
    I ,too was in a state of panic and closed our accounts an now have our capital in term deposits going nowhere .
    Can we restart a pension fund with another Industry fund by transferring the amount withdrawn from Australian Super ? Thanks Des SULLIVAN.

    Reply
    • Chris Strano

      Hi Des,
      You are unable to contribute these funds back into a pension fund, due to your age. It’s unfortunate, because all investment earnings within a pension account are received tax free. However, there is a way you can invest these funds in a similar fashion and receive a regular income, just as you were with your pension fund. I would strongly suggest discussing your options with a financial planner. If you do not have one, please feel free to make a free complimentary appointment with us using this appointment link https://calendly.com/torowealth/15mincall
      Regards,
      Chris

      Reply

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