Legislation associated with the extension of the Centrelink deeming provisions to superannuation-based income streams for income support pensions, such as the age pension, has now been passed and there is limited time to act (before 1 January 2015) if you want to ensure you meet the grandfathering rules.
In addition, legislation has now also been passed to give effect to extending deeming on account based pensions for the Commonwealth Seniors Health Card (CSHC).
What does this mean?
If you already have an Account Based Pension and receive income support (Age or Disability Pension) then your Pension will continue to be assessed in the current manner for the life of the pension. This will be important to those who are affected by the income test.
If you have an Account Based Pension, but you are not eligible for income support then your Account Based Pension will be treated under the new deeming rules.
Why is this important?
The current income test treatment for Account Based Pensions is favourable as it makes an allowance for some of the income being your own money rather than investment return. Deeming will simply ascribe a rate of return from the balance of your fund and in most cases this will be a worse outcome than under existing rules.
What do I need to do?
If you are currently in the system; i.e have an Account Based Pension and receive some income support, you do not have to do anything. If you are turning Age pension age between now and the first of January you will want to ensure that your Application is completed as soon as you are able and you are in a pension; and if you are under age pension age or do not qualify for a pension then there is nothing that can be done and you will be assessed under the new rules.
We are confident all of our Clients who are able to be or will soon to be in the right structure, however if you are unsure please contact us and we will confirm this for you.
For more information on Deeming please visit the Human Services Website by clicking here.