How your relationship and assets affect your age pension payments

Question 1: My partner and I have been together for 20 years. We own a house as ‘tenants in common’, and share expenses. However, our relationship as ‘partners’ is no longer. We have separate bedrooms and I guess we just live together but not as partners.

I believe he has much more assets than I do, so as a couple I do not receive any pension from the government. Will Centrelink consider my case and give me a pension based on only my assets? 

Centrelink will consider your case and it’s worth contacting them, because a single rate of age pension is higher than the partner rate.

Centrelink will try and determine whether you are in a de-facto relationship, and if not, they will consider you single and assess only your share of income and assets.

Factors considered for de facto relationships

Centrelink looks at five factors when considering whether a de facto relationship exists:

  • Financial aspects of the relationship
  • Nature of the household
  • Social aspects of the relationship
  • Presence or absence of a sexual relationship
  • Nature of the commitment.

After collecting evidence for all five factors, Centrelink forms an opinion on whether you are living in a de facto relationship.

All five factors must be considered. No single factor is seen as conclusive, and not all factors need to be present.

For instance, the presence or absence of a sexual relationship is considered but does not, by itself, indicate whether a person is a member of a couple.

Centrelink assesses each case on its merits prior to making a decision.

Question 2: My mother receives a full aged pension and is a resident in an aged-care facility. She purchased a 50 per cent bond to have a private room because she didn’t have sufficient funds until her home is sold.

When I sell her home (and pay the outstanding full bond from the sale), will she be considered a home owner or a non-home owner?

What is the asset threshold for her circumstances once her home is sold? Thank you.

Aged care can be a very complex area. I note that you have used the term ‘bond’ in reference to an accommodation payment. Since July 1, 2014, residents have paid either a ‘Refundable Accommodation Payment’ (RAD), a ‘Daily Accommodation Payment’ (DAP), or a combination of the two.

The RAD is sometimes still referred to as a ‘bond’ even though technically these were for residents who entered aged care prior to July 2014.

If the former home is sold, then the resident will be considered a ‘non-home owner’ by Centrelink.

A single non-home owner can have $487,000 in assets and still receive the full age pension, or up to $809,500 (as at December 2021) and receive a part age pension.

Note that the amount paid under the RAD does not count under the Centrelink asset or income test.

Centrelink or the aged-care facility may be able to provide you with more information, or you could consider seeking personalised financial advice.

Centrelink’s asset test.

Question 3: How long before you retire does Centrelink look at gifting/loaning money to your children?

Centrelink requires you to disclose all loans and gifts you have made in the previous five years.

To clarify, gifting between couples is not an issue; it’s only when you dispose of an asset or income or engage in a course of conduct that destroys, disposes of, or diminishes the value of your assets or income, without receiving adequate financial consideration in exchange for the asset or income.

This includes giving away money to family members, including children, and not receiving any benefit in return. Centrelink call this ‘deprivation’.

If gifts of assets exceed $10,000 in a financial year, or $30,000 over any rolling five-financial-year period, the excess gifts are an assessable asset and subject to deeming for five years from the date each gift was made.

If your age pension age is 67, and you gifted away funds prior to age 62, then this will have no impact on your age pension as the gifts were made outside the five-year period.

If, on the other hand, you gifted funds at age 65, then any amount above $10,000 would be counted until age 70.

But it would only affect you between the ages of 67 and 70, as before age 67 you would be ineligible for the age pension.

Craig Sankey is a licensed financial adviser and head of Technical Services & Advice Enablement at Industry Fund Services

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives. 

The New Daily is owned by Industry Super Holdings


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Fair Work Commission shoots down BHP’s jab requirement

A decision by mining giant BHP to ban unvaccinated workers from the biggest coalmine in the NSW Hunter region was made without adequately consulting employees and was not lawful or reasonable, the Fair Work Commission has ruled.

BHP announced in October it would make COVID-19 vaccination a condition of entry to its Australian sites and offices from January 31, 2022, excluding about 50 workers from the Mt Arthur thermal coalmine south of Muswellbrook from November 10.

The Construction, Forestry, Maritime, Mining and Energy Union represents the bulk of the 724 workers employed by BHP subsidiary Mt Arthur Coal that fall under its enterprise bargaining agreement.

They took Mt Arthur Coal to the Fair Work Commission, asking whether it was legal or reasonable to enforce the vaccination requirement as a condition of entry.

The FWC found Mt Arthur Coal did not act lawfully or reasonably.

Inadequate consultation

A deciding factor was that the mine had not provided reasonable consultation with the workers.

The FWC notes in its judgement, delivered on Friday, that while the mine had the right to institute site access requirements, “consultation is an important component” of the decision-making process.

“It seems to us that the most telling factor against a finding that the site access requirement was reasonable is the failure … to reasonably consult with the employees,” the FWC judgement said.

The Australian Industry Group submitted to the Commission that Mt Arthur Coal had met its consultation obligations, but after the Commission disagreed, the group’s chief executive Innes Willox said the case showed “the importance of employers consulting with employees before implementing mandatory vaccination requirements”.

“The decision is not a repudiation of vaccine mandates by businesses,” Mr Willox said.

The FWC’s ruling acknowledged “employers face a difficult task in managing the risks for their workers in such a dynamic environment” as the one presented by COVID-19, but noted BHP made the decision independent of any public health order.

‘The rights of workers’

It’s understood vaccination is still a condition of entry at Mt Arthur Coal while further consultation takes place, and BHP’s national vaccination policy remains.

CFMMEU Northern Mining and NSW Energy District President Peter Jordan told AAP the FWC’s decision “is a win for the rights of workers to be genuinely consulted about matters affecting them”.

“BHP was arrogant in imposing its mandatory vaccination policy without genuine workforce consultation or the backing of a public health order,” Mr Jordan said.

“We will continue to work through the detail of this decision and represent the interests of all our workers – especially those who have been stood down without pay as a result of this unlawful direction.”

A spokesperson for BHP said the company noted the Commission’s decision, “which acknowledges the risks presented by COVID-19 and has outlined that further consultation should occur”.

“The science is clear that vaccination saves lives. BHP supports widespread vaccination as the path forward for the Australian economy,” the spokesperson said in a statement.

“We are assessing the implications of the decision and will work with the commission, our people and union representatives to ensure our workplace remains as safe as possible for our people, their families and the community.”



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