Retirement Strategies and Solutions Specialist
(Prepare for Life)
The process of claiming an Age Pension can be complicated and daunting.
There is a very lengthy claim form, asking a series of questions which needs to be completed and then depending on your circumstances, you may need to complete even more documents.
You can choose to lodge your claim on line via your myGov account and if you have a Customer Reference Number (CRN), you can then link your account to Centrelink and set up an online account. If you do not have a CRN you will need to visit your local Centrelink office with your identification to get a CRN.
Although this will take time, the good news is that you don’t have to wait until you turn the appropriate qualifying age to lodge your claim, you can start the process 13 weeks prior to this date.
The Age Pension you receive will be based on the information that you do provide in relation to your assets and income. So, it is extremely important that you provide the correct information.
Do not be tempted to not fully disclose all the necessary information, it is important to remember the claim form is a legal document with your signature attesting to the accuracy of the answers you have provided to the question.
On the Income and Assets form, which you will also need to complete with your Age Pension application, you will be asked to provide details of the balances of your bank accounts and the monies you have invested in superannuation and other investments.
The form will also ask you to value your household contents and personal effects. This question often causes a little consternation as people are not or were not aware that the value of their household contents could influence the amount of pension that they are paid.
It is for this reason that when completing this question, the valuation that you provide is a fire sale value. In other words, what you would get if you were to sell your furniture and contents in a garage sale. It is not the value that you may have your contents insured for, which for some people could be as high as $60,000
A reasonable value which is more than acceptable for the average 3-bedroom home is $10,000. The difference between a value of $60,000 and $10,000 for a couple assessed under the assets test is a reduction in their pension of $150 per fortnight. So, it is important from a financial aspect that you do not overvalue your contents and personal items.
The same analogy applies to the valuation you are asked to provide for your motor vehicles, it is the value you would receive if you were to sell your car, not necessarily the insured value.
These are just a couple of points and as I mentioned at the beginning of the article, applying for the age pension is not easy. Take some time before you reach Age Pension age and view the Centrelink site to understand the process. If after doing so you are still confused or have question, talk to your adviser – they will be able to ensure you complete the process correctly.