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20 great ways the government helps retirees

Here are some tips for retiree Australians (and their families and friends) as we kick-off 2020:

1. If you are turning 66 this year, make a diary note to look closely at an age pension application 12 weeks before the actual birthday. This gives time to address any hiccups well in advance of your first payment being due. You should have some idea of whether you are eligible for the age pension, and the payment should form part of spending plans.

2. If you are turning 66 this year, and think you are not eligible for the Centrelink age pension, make sure you know exactly why, so you can get ready to apply if things change. You may even be wrong.

3. If you are turning 66 this year, and you are not eligible for the Centrelink age pension, then apply for the Commonwealth Seniors Health Card. This card is income tested and could save you more than $2,500 a year on healthcare costs.

4. If you think you were not eligible for the Commonwealth Seniors Health Card, check again. Low income returns on investments and changes in deeming rates mean that your eligibility may have changed. Unlike the Centrelink age pension, you can only apply for this once you reach age pension age. Something to do on your 66th birthday!

5. If you are already receiving a part pension, make sure Centrelink is up to date with the right data. For part pensioners, a change in assets of $1,000 means an extra $78 per year in age pension payments. Check the right value for the car or caravan is in the system, and household contents are realistically valued. These assets are means tested. Your savings may have changed due to a holiday, renovation or medical emergency. Make contact and increase your pension.

6. If you receive an age pension, make sure you are receiving these five entitlements:

   - Gas Rebate
   - Electricity Rebate
   - Water Rebate
   - Council Rate Discount
   - Driver’s License and Registration Concession

7. If you are applying for the Centrelink age pension, apply for the entitlements above as soon as you receive your Pension Concession Card. (Hopefully on your birthday - because you started application three months beforehand!)

8. If you are in the situation of (6) and (7), keep searching for entitlements, concessions, rebates, programmes or whatever they are called. In my list I have more than 40 and counting. Policies change, governments try and get re-elected, budgets have announcements - it’s a moving feast. Everything from replacement appliances, fishing licenses, pet registration, and stamps. And from all levels of government. Oh yes - in different departments in the different levels of government too. There are so many, there’s work to do here.

9. If you are part of a couple, make sure you are registered for the Medicare safety net as a family or couple. This is something most people set up when they first get married but things can change a lot over time. With access to Concessional Medicare Safety Net thresholds as a holder of a Pensioner Concession Card or the Commonwealth Seniors Health Card, this one is a no-brainer.

10. If Christmas with the family has got you thinking about aged care, learn about it before it happens. You will be grateful for some basic knowledge. The Government Aged Care portal, has good resources to get you started. Look at local aged care providers. What are the costs? Are the assets of your parents organised enough to be called on to fund aged care? Can they be re-organised? June 30 this year is your deadline to make use of a financial year to sell assets, and then sell again the next day to reduce the cost of capital gains tax. 

11. If you are trying to work out how your savings are going to last, try the ASIC Moneysmart Retirement Planner. It's much better than many of the services provided by for-profit companies as it includes age pension eligibility and works this out over time.

12. Check how your spending compares to the ASFA Retirement Standard. This is a great tool for reviewing how your spending in retirement might look if things are going well, or if you have to tighten your belt.

13. If you are in NSW and hold a Commonwealth Seniors Health Card, apply for the Seniors Energy Rebate. If you have already applied, don't expect to get it again next year. You will have to re-apply. Governments make announcements, hide the application forms, then make you search again the next year to get the same benefit. Play the game!

14. If you are in NSW, hold a Commonwealth Seniors Health Card or receive an age pension, and live in a regional area, get ready for the $250 Regional Seniors Travel Card. Applications open from 29 January.

15. If you are 66 or over and still working, don't assume the Centrelink age pension is irrelevant. For someone with a small amount of savings and a low-income job, there is a potential benefit. Here is how to get the full experience of how confusing it is: Work out your age pension eligibility, crunch the numbers on SAPTO, add a dash of LITO, stir in some Work Bonus - and then take this result to try and work out the right number of hours to work so you are not giving away 50% of your savings by forfeiting the pension via the income test. Sound confusing? It’s one of the most baffling situations one can come across and those with low incomes and small savings are the ones hit with an effective 50% tax rate. Don’t start me.

16. Travelling by public transport in NSW? If you want to make the most of government transport help, take a look at the following: Pensioner OPAL Card, Pensioner Travel Vouchers, Country Pensioner Excursion Tickets and Regional Excursion Daily (RED) Tickets. Got all that? Hopefully you have more time to plan when you are retired.

17. If your investments are hard to track, hard to organise, or you cannot link your investment strategy to your retirement plans, it might be time to consolidate and simplify. There is a link between asset allocation strategies and expected returns. ASIC explains it here. Use these expectations, an understanding of spending and availability of government support as the basis of long-term retirement spending plans. A long-term plan should be easy to hang your hat on. Allow for unexpected changes, such as medical emergencies, aged care, sudden yearning for travel, urgent house upgrades and maintenance, bailing out a child … the list is endless.

18. If you own property and need a top up for your day-to-day living expenses, the Pension Loans Scheme may be right for you. The interest rate has dropped to 4.5%. If you are eligible for the Centrelink age pension at $0, maybe you can apply for a loan even if you are a self-funded retiree. This may suit people with illiquid assets that stop them from getting an age pension, who may be cashflow poor. People with income streams that prevent them getting the age pension (via the income test) may also apply for a top up. It’s a scheme for everyone. 

19. If you want to understand how the Pension Loans Scheme could work for you, start playing with the Money Smart Reverse Mortgage Calculator. Change ‘Lender and Product’ to ‘Other (no loan restrictions)’ and set the borrowing plan to ‘fortnightly payment’. It’s still not super clear - but it is better than anything else you will find. (Why are these government tools so hard to find?)

20. If you are feeling a bit hopeless about how hard it is to get properly organised, read this. In 2014, Joe Hockey needed four Treasury officials and a few weeks to work out what every Australian turning 66 must grapple with. There is no manual, no list, no comprehensive website.

But it's well worth the effort.


Brendan Ryan is a financial adviser and Founder of Later Life Advice. This article is for general information purposes only and does not consider the circumstances of any person.


Peter Tischler
January 30, 2020

Hi Brendan, can't see much help in that if you are past 66 and farming full time sell lambs at $200.
Cheers, Pete.

January 20, 2020

Some very interesting points, Brendan

The money smart retirement planner only allows me to change my retirement income by adjusting the age the super will run out

From that point of view it is not that useful

Brendan Ryan
January 20, 2020

Hi Michael,

The ASIC Moneysmart Retirement Planner is not perfect - however I do think having a close look is worth it for a later life Australian trying to make some kind of plan for their retirement.

In your example of tweaking your life expectancy to work out how long your money will last based on your spending requirement is helpful - especially when the ASIC Moneysmart Retirement Planner does the number crunching around investment returns, inflation, and Centrelink eligibility. At least you now know when things could get tight - hopefully it is not for a long time!

Here are a few other things the ASIC Moneysmart Retirement Planner can help you get thinking about:

*Using inflation (2%) and a rate that takes into account a “rise in living standards” (1.2%) to “deflate” investment returns.
*Using investment return forecasts that may be more conservative than what fund managers may promise (dig into the assumptions to find these)
*Encouraging you to look at the ASFA Retirement Standard as a way to benchmark your spending.

In fact - you can work your way backwards from how the ASFA retirement standard (and a few other assumptions found in the ASFA website) to the lump sum is required to deliver a “modest” or “comfortable” standard of living in retirement for a single or a couple at age 66. It’s a great exercise (if you are numerate enough) to flex your muscles a bit in using this style of calculator - and should give you more confidence in using a calculator like this to make a plan.

The reality is that retirement spending is not linear, investment returns are not linear, not everyone has the same lifespan.

Also - retirement spending is funded from capital, investment returns, debt (such as the Pension Loans Scheme), as well as government help. Also consider that the age pension (which is included as INCOME) in the retirement planner, also allows a whole lot of support on the cost side - such as the 40 or so discounts, benefits, subsidies - whatever you call them, that can save thousands of dollars each year. The ASIC Moneysmart Retirement Planner has a long way to go in addressing all of this - let alone all the variations of wealth and situation that Australians in later life find themselves in.

So - it is not perfect, but it is the best start that is publicly available that I have come across.

If you can plan your retirement spending around what dividends you get - lucky you. For most it’s a complex mix.

And those that have the most complexity are amongst the government systems, and would have the least resources to get help.

January 16, 2020

Good tips IF you live in NSW (32%) anything for the 68%?

January 16, 2020

Cor, blimey - that's what I paid for. I'm envious.

Would burning a pile of cash be deemed "Deprivation of Assets & Income"?

January 16, 2020

Does SAPTO also help (ATO and hence government) ?

Brendan Ryan
January 16, 2020

Dudley - I am not sure about this - it does read that you may actually continue to be assessed on the value of the burned cash.

A better idea would be to use the money to improve your home (which is not assessable) or spend the money on a holiday (as long as it makes sense in your long term plans).

A purchased asset would be assessable - although you would be well served to remember to keep Centrelink up to date with an appropriate value over time (see 5)


January 19, 2020

Dudley and Brendan. This is THE reason why anyone with $400,000 to $800,000 in hard saved super assets have been called the "middle road kill group" and as a result of asset changes by Hockey and Morrison and therefore are out doing home improvements and cruise after cruise to get their assets down to $400-$500,000 and the full pension. For each $1,000 spent/reduced they get $78 a year in pension......

January 16, 2020

How to help retirees? More accurately titled "20 great ways the government helps old age pensioners" perhaps.

I find the ASIC retirement calculator incomprehensible and always have. If I end up with, say $1.4M and retire at 61, it projects an income of $60K - which eventually runs out and the OAP phases in from my late 70s, but then the balance after one year drops $55K. Even a conservative return on the balance at retirement would generate almost $50K, so you'd expect, given the tax free environment, the balance to drop not nearly so much. And the 4% mandated withdrawal is less than $60K.

It also doesn't allow for non-super assets, which makes it less than useful for most people.

Happy to be told I'm doing it wrong... and am missing something in my assumptions - while there's still time, but if, retiring at 61 on $60K tax-free, I ever need the OAP, then someone should beat me with a stick.

Brendan Ryan
January 21, 2020


This is not an easy task, when you consider all the variables in making plans for the future.

The calculator is very conservative. And it is “deflated”. That means inflation and allowance for increases in cost of living are taken away from the annual returns to allow the representation to be “in todays dollars”. The alternative is an income forecast that has a gradient - to take into account inflation.

Consider the assumptions in the calculator:

Conservative Return of 3.8% LESS fees of 0.3%

Then, the calculator takes into account inflation (2%), and increases in the standard of living (1.2%).

So after taking that away from a return of 3.8% - the “deflated” return is 0.2%.

This is not some crackpot number. This is what you get using a Government site. That is an 0.2% “real" long term return.

In this case, the $1.4m is only slightly moving ahead, while a drawdown of $54k pa is made - that lasts until 91 - at which point you will be solely relying on the age pension - and note that the Age Pension is likely to start helping you from Age 77.

What about assets outside of super? Well, consider that any income from your super is tax free. Then look at how much you have to earn to actually pay tax on funds outside of super - and this depends on whether you are eligible for the age pension, and whether the income is derived from paid work (see LITO. SAPTO and the work bonus). The actual minimum drawdown amount of 4% becomes less relevant, as inside super or outside super, you are unlikely to be taxed (for now).

This is why I think everyone should have some understanding of the Pension Loans Scheme - you assert that with $1.4m, and drawing down and spending $60k per year, if you ever needed the Centrelink Age Pension, you would expect to be "beaten by a stick"…conservative estimates say this could be the case. Between the age of 61 (when you retire) and 91 (when conservative estimates say your savings run out) - your home will have substantially increased in value. You may choose to draw down on some of that equity to fund lifestyle, instead of being forced to move (at 91), because you have run out of money. This is where a government run reverse mortgage scheme (i.e the Pension Loans Scheme) may be of help. This is something I encourage people to at least understand, to know it is there, in the very case that this modelling refers to. Surely it is a source of comfort knowing all the options? (And lets face it - the Government wants you to tap that wealth too)

And just to interrupt the linear style of these models - don’t forget unexpected capital drawdowns - expensive medical, a sudden urge to holiday, necessary home upgrades, bailing out children - this list is endless. These can really mess with your plans!

Further - in the event of needing aged care for you or your spouse (if you have one), a chunk of your savings may be needed to pay the Refundable Accommodation Deposit - which is not assessable for the Centrelink Age Pension test - and in this event you are assessed as an "illness separated couple" - eligible for the age pension as 2 singles as opposed to a couple. You will be very interested to know what you are eligible for at this vulnerable stage (or at least your children will).

I hope this helps. Planning for a lifetime is immensely challenging. I think an exercise like this is incredibly helpful - to understand the assumptions, tinker with them, imagine some potential events. There is so much analysis of companies and markets - what about analysis of you, the system, and how your life may pan out?

And on this - for all the complexity of these models - consider the input of market returns comes down to just a number, based on long term returns of different assets allocation strategies. This should indicate where the real work needs to be done…on planning for you, not your portfolio.


January 16, 2020

Glad I'm retired and have enough time to work though this.


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