Updating Centrelink on your assets to potentially boost your pension August 19th, 2022
With a hefty lift in Centrelink payment rates expected on the 20th of September, 2022, now might be a good time to ensure you’re making the most of the system.
Updating Centelink with the current value of assets that have declined in value could result in extra payments in addition to the increase which would apply from September 20.
But even if you’ve missed this date, it’s always worth looking into the value of your assets.
Cars, caravans and boats are the usual suspects but with some real estate across WA teetering on a decline, recent property investors might also benefit.
While the exact figures to apply from September 20 are yet to be released, the rate of single age and disability pension is expected to go past $1,000 a fortnight for the first time and couples, a combined $1,500 a fortnight.
If you are currently receiving less than the current full rate of $987.60 as a single or $744.40 each as a couple, then it is likely your pension is being adjusted through the application of one of two means tests.
There’s an income test and an asset test. The test that produces the lowest pension payable is the one Centrelink will latch onto and it’s the asset test that is regarded as being the most severe.
Under the asset test, you lose $3 a fortnight for every thousand over the threshold. For a home-owning single, that threshold currently sits at $280,000 and for a couple, $419,000. Non-home-owners are allowed an additional $224,500 in assets whether single or as a couple.
If your pension is being reduced by the effects of the asset test, depreciating the value of your assets can make a big difference.
Here are a few examples of how you can reduce your assets (in Centrelink’s eyes)
Car
Let’s say you bought a new car 2 years ago with all the trimmings and notified Centrelink that it cost $43,000 at the time.
If you haven’t updated the value since, the $43,000 value is still on the books. Centrelink won’t automatically depreciate the value. You’ll need to do it manually either online or by sending in the details.
Centrelink will generally accept the trade-in or scrap values which for cars and other vehicles, you can usually obtain online.
You might discover that 2 years on, your $43,000 car now has a trade-in value of $30,000 which is $13,000 less than recorded.
At a pensioner reduction rate of $3 per thousand dollars over the threshold, the $13,000 change will see your pension rise by $39 a fortnight.
Investment Property
The same might apply if you bought or inherited an investment property recently and that’s affecting your payment under the asset test effects.
Depending on when and where, it’s possible that the property has declined in value and updating the value to reflect the very recent trends might help.
In this case, Centrelink may have the property valued at their expense or accept the new figures.
Home Contents and Personal Effects
Its also important to ensure that your home contents and personal effects reflect their current “scrap” values.
While the Jarrah coffee table might have cost you several hundred dollars in the eighties and its insured for that now, you’ll be lucky to get $10 on Gumtree for it.
In many cases, the scrap value for the contents of an entire household are $10,000 or less. There’s nothing wrong with using this figure with Centrelink in preference to the insured values.