Posted on June 30, 2020
The Government has signalled their intention to go ahead with proposed changes to the Centrelink (DHS) treatment of superannuation pensions. The proposal is to apply the normal Centrelink (DHS) deeming rules to account based pensions that commence from 1 January 2015.
This could result in an increased level of income from the Superannuation pension being assessed for Centrelink’s (DHS) income test and hence a reduced rate of Government support for some clients.
Under current rules, a portion of the income received from a Superannuation pension is excluded from Centrelink’s income test as this portion somewhat reflects a return of capital to the income stream recipient.
Pensions in existence at 1 January 2015 will be covered under the existing rules, unless there is a change to the terms of the pension or a change in provider.
The legislation for this proposal has been introduced to Parliament but has not yet been passed. This is an area that we will certainly be reviewing in depth when the Government releases more details.