JDFP - Diversity by Design

Centrelink Income Test

Most Centrelink Pensions are now means tested, and as such they include a test on the income you earn, once you are over a certain level the Centrelink Pension will cease.

For the income test you need to seperate your assets into three boxes, those that are Deemed by Centrelink to earn a set income (such as bank accounts, shares, managed funds, etc), those that earn a physical income (such as rental property, and some superannuation pensions), and those assets that may have special treatment (such as pre 2015 superannuation pensions)

Deemed by Centrelink

Deeming was introduced more to simplify the income test and to decrease the amount of information someone is required to bring to Centrelink. All assets that fit into this box are treated the same, it is assumed that amounts above and below the threshold (currently $79,600 for a couple as at 20/05/2015) earn a set rate, this calculated amount in called your Deemed Income.

It should be noted that this is just a Centrelink calculation if you actually earn more that is good fortune for you.

Physical Income

Assets that generate a physical income such as a rental property have the entire amount treated under the income test, Centrelink does allow for deductions for normal running costs of the property, and for any loan interest payments that may apply.

Special Treatment

Some assets have special treatment for Centrelink and offer a reduced income test. Special care needs to be taken in this area as rules change and investments are ofter in a state of fluctuation so please call us to discuss your Centrelink needs.

At Jason Dawson Financial Planning (JDFP) we have simple methods of explaining how this Income Test works and we can guide you through the calculations so let us simplify your dealings with Centrelink.