On this page
- 1. Recheck your eligibility for the Age Pension
- 2. Get ready to apply for the Age Pension
- 3. Check your eligibility for the Commonwealth Seniors Health Card (CSHC)
- 4. Review your Centrelink asset values
- 5. Check you are receiving all your government entitlements
- 6. Apply for your state Seniors Card
- 7. Register for the Medicare Safety Net
- 8. Check your spending levels
- 9. Investigate the Pension Loan Scheme
- 10. Review your health insurance cover
With sharemarkets swooning, interest rates being cut and super balances dropping, many retirees are starting to worry about how they will manage their finances.
For many people, their finances aren’t in as good a shape as they were a few months ago, so it might be time to think about what you can do to boost your income or save a few dollars.
Here’s SuperGuide’s list of 10 suggestions that might help:
Need to know
On 22 March 2020, the government announced an economic stimulus package that changes early access to super and social security deeming rates.
The government also temporarily reduced the minimum drawdown requirement for account-based pensions and similar products by 50% for 2019/20 and 2020/21. As a retiree, this will give you more flexibility in how you manage your super assets.
1. Recheck your eligibility for the Age Pension
If you’re a self-funded retiree who has been ineligible for even a part Age Pension in the past, now is a great time to recheck your financial situation and see if your position has changed.
If your assets or income have gone down due to sharemarket declines, interest rate reductions or changes to the deeming rate, you may now be able to sneak in under the assets and income test limits and score a small part pension.
For those still ineligible for an Age Pension payment, research exactly where you fall foul of the assets and income test requirements so you are ready to reapply if your situation changes in the future.
SuperGuide Premium is ad-free
For more information, read SuperGuide article Am I eligible for the Australian Age Pension?
2. Get ready to apply for the Age Pension
For retirees turning 66 this year, circle a date on your calendar well before your birthday, as you can submit an application for the Age Pension up to 13 weeks prior to reaching Age Pension age.
You need to confirm your identity and supply supporting information and documents (such as Tax File Number and your bank account and income and assets details) with your application. So get ready early to give yourself time to address any Centrelink issues and ensure you receive your first fortnightly payment as soon as your birthday rolls around.
Scoring even a small part Age Pension can be a valuable boost to your retirement income. You also receive the Pensioner Concession Card, which entitles you to cheaper healthcare and medicines.
For more information, read SuperGuide article How do I apply for the Australian Age Pension?
3. Check your eligibility for the Commonwealth Seniors Health Card (CSHC)
If you are not eligible for any Age Pension payments, you may still qualify for the Commonwealth Seniors Health Card (CSHC), so ensure you also apply for this card as soon as you turn 66 and reach Age Pension eligibility age.
The CSHC is a concession card giving you access to bulk-billed doctor visits, cheaper Pharmaceutical Benefits Scheme (PBS) medications, a larger Medicare refund for out-of-hospital costs and, potentially, cheaper government services. Some estimates are the CSHC can save you more than $2,500 a year on your healthcare costs.
A CSHC is only valid for one year, so even if you have been ineligible in the past, lower returns from your investments and the reduction to the deeming rate could mean you are now eligible. Crunch the numbers to see.
For more information, read SuperGuide article Commonwealth Seniors Health Card: What it is and how to apply.
If you qualify for a part Age Pension, update the information Centrelink has about your assets with realistic, current valuations. This includes both your financial assets and the physical ones like your car, caravan or household contents.
Under the Age Pension asset test taper rate rules, every $1,000 reduction in the value of your assets could mean you receive an extra $78 per year in pension payments, so it’s worth updating the value of your assets in line with the current, lower market valuations.
If your assets have reduced in total value – due to the sharemarket decline or even spending on a holiday or home renovation – you could be eligible for a bigger pension payment. So, contact Centrelink and update your personal information.
For more information, read SuperGuide article Age Pension assets test rules (March 2020 to July 2020).
5. Check you are receiving all your government entitlements
For retirees receiving even a small part Age Pension, ensure you are getting all the government benefits you are entitled to receive.
A Pensioner Concession Card is the key to getting cheaper vehicle registration; rebates on your electricity, water and gas bills; cheaper local council rates and even less expensive spectacles. In NSW for example, eligible pensioners don’t have to pay vehicle registration fees and motor vehicle tax, while Queensland offers a 20% subsidy for local council rates and charges.
Some states also offer valuable concessions on daily living expenses, with the Northern Territory Seniors Recognition Scheme for example, giving residents aged 65 and over a $500 annual pre-paid card to use for travel, accommodation, fuel, electricity or water. In NSW, if you are eligible for a CSHC (Age Pension not required), you can apply for a $200 Seniors Energy Rebate.
Most state governments offer a wide – and regularly changing – list of benefits to retirees, so click on the link for your state to find out more:
- ACT Government Savings Finder
- Northern Territory Government concessions
- NSW Government concessions and rebates
- Queensland Government concessions and rebates
- South Australian Government concessions
- Tasmanian Government discounts and concessions
- Victorian Government concessions and benefits
6. Apply for your state Seniors Card
Everyone who is aged 60 and over should apply for their state government’s Seniors Card. These cards give you access to valuable concessions on transport costs and discounts from participating businesses for a wide range of goods and services, which can help stretch your retirement dollars further.
State Seniors Cards are not means tested, so every retiree should have one, as they provide generous public transport and government concessions, plus discounts for holidays, travel, automotive services, household needs and professional services.
For more information, read SuperGuide article Your simple guide to state Seniors Cards: How they can save you money.
7. Register for the Medicare Safety Net
If you are part of a couple, ensure you are registered for the Medicare Safety Net to help lower your medical costs for out-of-hospital medical services like seeing a doctor or specialist, and for tests like CT scans and blood tests. Once you spend over a certain amount in a calendar year, you receive a higher amount back from Medicare.
If you register as a family or couple for the Medicare Safety Net, Centrelink automatically keeps a tally of the out-of-pocket and gap amounts for your healthcare expenses, so your costs will be combined and you could reach the threshold for higher payments more quickly.
Seniors holding a Pensioner Concession Card or CSHC can access the Extended Medicare Safety Net for Concessional and Family Tax Benefit Part A recipients. For more information, see the Services Australia’s website here.
Learn more about the Medicare Safety Net.
8. Check your spending levels
If you’re concerned about your retirement finances, it can be a useful exercise to compare your spending with the ASFA Retirement Standard.
Updated quarterly, the standard can help you determine how your household expenditure compares to that of other retirees. You may need to cut your spending if your household expenditure is too high for your financial position.
Tools like ASIC’s Moneysmart Retirement Planner can also help you work out how long your retirement savings will last given your current spending level.
For more information, read SuperGuide articles:
- Retirement cost of living: How much does a comfortable lifestyle cost?
- How much super do I need to retire?
- How to plan your spending through the 3 stages of retirement
- Minimum pension drawdown rates halved for 2019/20 and 2020/21
9. Investigate the Pension Loan Scheme
For homeowners, if money is getting tight, it could be worth investigating the government’s Pension Loan Scheme (PLS). This scheme can be a great way to top up your retirement income, even if you are a self-funded retiree.
The PLS is a reverse mortgage-style scheme that allows you to access extra income by borrowing against the equity you have in your home. If your assets are preventing you from receiving an Age Pension, the PLS could be useful top-up for your retirement income.
For more information, read SuperGuide article What is the Pension Loans Scheme, and how does it work?.
10. Review your health insurance cover
Many people forget to regularly review their health insurance cover as they age. Health insurers are constantly tweaking their policies and launching new ones, so ensure there isn’t a cheaper, more suitable policy available from your insurer.
Health funds often offer more cost-effective policies to older members by cutting out benefits for things like pregnancy, birth and IVF services, so check whether there is a policy better suited to your personal circumstances.
It’s also worth reviewing the excess on your health policy, as simply increasing the excess can reduce your premium and make it easier to retain your insurance cover if dollars are tight.
Learn more about retirement income in the following SuperGuide articles:
- Is a bucket strategy the solution for your retirement income plan?
- How to maximise your Age Pension
- How inflation affects your retirement income forecast
- ‘Today’s Dollars’: The impact of inflation on retirement income
- Retirement income in Australia: An overview
- Target retirement income: An explanation of the 66–80% rule of thumb
- Worried about outliving your retirement savings? 9 steps that might help
Want to know more about super and pension rules in retirement?
Become a SuperGuide Premium member and access independent expert commentary on important retirement rules, including taking a super lump or starting a super pension, working in retirement, the Age Pension rules, Commonwealth Seniors Health Card and the latest super rates and thresholds.
Includes performance rankings for 226 super funds and 159 pension funds, more than 500 articles, how-to guides, checklists, tips and strategies, calculators, case studies, quizzes and a monthly newsletter.