Changes to account based pension deeming rules
Important changes to deeming rules for account based pensions
From 1 January 2015, the way in which account based pensions are treated under the Centrelink Income Test will change. This means all financial assets will be assessed using the same deeming rules and will be considered as earning a certain rate of income, regardless of the actual return on the investment. For some members, this may result in a potential reduction in social security income support payments.
If you are in receipt of a Centrelink income support payment or are likely to become eligible for one in the near future and you hold funds in superannuation, there may be benefits in starting an account based pension and applying for social security income support payments. Pensions set up before 1 January 2015 qualify for grandfathering provisions and will not be subject to the new deeming rules if:
• You receive social security income support payments immediately before 1 January 2015; and
• You continue to receive social security income support payments from 1 January 2015.
Even if you don’t think you are eligible for Centrelink benefits, you may still be better off commencing an account based pension sooner rather than later.
Before making a decision, it is most important you speak with a financial adviser to discuss how these changes will impact you, as you will need to put the right strategies in place to suit your personal circumstances.
Our Member Care team can put you in touch with our preferred financial advisory partner – your initial consultation is free and without obligation. Simply contact our Client Services Team.