Get the most out of what's already yours

Introduction

Phil: [00:00:01] The biggest mistake some people make is not applying or applying for the pension too late. A lot of people don't realize that they can apply 13 weeks before they turn 67, and it doesn't get back paid. If you apply too late, you could actually be losing funds from your pension. 

Andrew: [00:00:18] The majority of superannuation members in Australia qualify for the full or part pension, but many people don't even bother applying. So what could you be missing out on? Well, a lot as it turns out. Benefits that help you save money and can make your life a little easier. From concession cards to tax offsets, these are supports that you've worked a lifetime for and well and truly earned.  

So, keep listening to find out how to make the most of what you're entitled to, and shift the way you think about your super.  

From CBUS I'm Andrew McKinnon and this is the CBUS Super Shift podcast.  

Joining me for this episode is Phil Milne, the CBUS coordinator for 12 years. Phil joined me on episode two of the Super Shift podcast, so thanks for being here again. 

Phil: [00:01:11] Thank you for having me. 

Andrew: [00:01:12] Andrew and Bonyit Mabor, a CBUS retirement advice consultant and one of the many first points of contact when you call customer service. Bonyit. Welcome. 

Bonyit: [00:01:22] Thank you very much. It's a pleasure. 

Andrew: [00:01:24] Now, just before we dive in, I want to remind listeners that the information in this podcast is general in nature and may not account for your specific needs. Please consider your financial position, objectives, and requirements before making financial decisions. Please read the relevant product disclosure statement and target market determination on our website to decide if CBUS is right for you. We'd also like to remind listeners that past performance is not a reliable indicator of future performance. Okay, let's get into it. Retirement is a shift in life stage when you can step back from work, reclaim some time, and redefine your purpose. The age pension is a safety net, a fortnightly government payment designed to support eligible Australians aged 67 or older who don't have enough super or savings to help fully fund their retirement on their own. In fact, it's the main source of income for many retirees in Australia. So outside of being able to receive a regular payment, what comes along with the age pension that we should know about? 

Other government benefits

Bonyit: [00:02:34] Yes, certainly. There are quite a number of things that people should know about. And these includes the concession cards, which offer discounts on utilities, transportation, healthcare costs as well. And then there's also what's called a work bonus. Work bonus just allows people to work and earn up to $300 per fortnight without affecting their pension payments. And then thirdly, we've got the tax offsets that reduces seniors tax liability. So that means they get to keep more in their pocket. And finally, which is quite unique is Centrepay, which is a free direct bill paying service available as a regular deduction from Centrelink payments. 

Andrew: [00:03:13] Okay. We're talking convenience discounts. Some extra money in your pocket. Phil, why are so many retirees leaving these extras on the table? 

Phil: [00:03:22] Partly it's actually just applying for the pension itself. It's a case of some people are quite nervous because it is quite involved. It's just the jargon. It's very complex. It can be very intimidating. So don't be frightened to explore that. If you're at an age where you're entitled to pension, go in and do the paperwork and get yourself there. Secondly, there can be people who have got funds, they've got certain assets and they don't honestly believe they're entitled to the pension. This said, it doesn't do you any harm to apply. You've got nothing to lose. It's a win win situation. 

Bonyit: [00:03:49] Yeah, I've spoken to countless members who, you know, upon assessing their circumstances and I just asked them, wait, you seem like you are eligible for these benefits. Have you applied for them or considered them. And frankly, they often tell me, well, I didn't know I was eligible for it, but now I will actually go and start to apply for it. So yeah, there is certainly a lot of people out there who just aren't aware that they're eligible because nobody has even spoken to them about it. 

Age Pension eligibility

Andrew: [00:04:17] And that's when CBUS can help you to find out if you're eligible. It's worth asking then. Are you confident around the topics of retirement, the Age Pension, and the benefits that you could be entitled to? Well, we spoke to some members to find out. 

Shelby23: [00:04:36] No, I feel like I have no confidence in that. I actually have no knowledge about what I'm entitled to in retirement or how it even rolls out. Like, what's the process? Nothing. I have no idea. 

John Doe2: [00:04:48] No, I'm not exactly sure about what I'm entitled to at this stage. I haven't really looked into it. 

Nasrullah23: [00:04:55] I'm not too confident in what I'm entitled to when I retire, because there's not really a lot of people talking about it. 

John Doe2: [00:05:02] What are the perks that I can get with the income that I have, and what can I get away with before my pension or gets affected? 

Saving money with concession cards

Andrew: [00:05:15] Look, not understanding your benefits and entitlements is a missed opportunity that feels completely avoidable. So let's try and remedy that Bonyit. Tell us a bit about concession cards and their benefits. 

Bonyit: [00:05:25] Concession cards are designed to reduce retirees living expenses. So that includes medications, transportation, even utility expenses as well. Now eligibility does of course differ because there's a few different things they have to satisfy, such as age, residency and also income and assets test. But for those who are on the Age Pension, a lot of the concession cards are actually automatic. So if you receive an Age Pension payment, you will automatically get a concession card. However, for those who are self retirees, they actually may be eligible for what's called a Commonwealth Seniors Health card. So because they're not qualified for the pension payments, they're still eligible for the concession card, which still gives them benefits. 

Andrew: [00:06:12] And sure, these are small savings, but it really adds up over time. 

Bonyit: [00:06:16] It does add up over time. And it does, you know, help improve retirees budgets because every single cent, every single dollar, it does go a long way, especially nowadays. 

Phil: [00:06:25] I mean, you're talking about a discount on medicines, possibly discount on healthcare, discount on transport. So these all add up. These are all things that come out of your wallet every day. 

The Work Bonus

Andrew: [00:06:35] The work bonus is another government scheme designed to help protect your pension and save you a bit of money, so you can earn up to $300 per fortnight without affecting your pension entitlements. And it can accrue over time to a maximum of $11,800 if you don't happen to use it. 

Speaker7: [00:06:53] What? It gives them that flexibility, doesn't it? 

Phil: [00:06:54] I mean, not everyone's ready to fully retire. That's the honest truth. Some people do miss that camaraderie, whether they be in the workplace, on a building site or wherever they may work. They can still get a pension depending on what they earn, and they can still be part of the community and be part of the life that they've been so involved with for so many years. 

Bonyit: [00:07:10] And sometimes, you know, people may want to just do a bit of a casual work here and there, especially, you know, when they unused amounts gets banked up up to $11,800. 

Phil: [00:07:20] Yeah. No that's true. That's very true. I think the other thing as well is unfortunately not everyone's got a $1 million in their super and there's a reality there as well. Some people $300 to someone can mean a lot, can be an immense amount. And it just gives them that little bit more, more comfort and stability in retirement. 

Tax offsets

Andrew: [00:07:38] Let's go to the next retirement perk tax offsets Bonyit. Can you tell us a bit about how those benefits work? 

Bonyit: [00:07:44] Yes, absolutely. There are two primary tax offsets. There's what's called the seniors and pensioners tax offset which helps reduce pensioners tax liability. So keeping more in their pocket. And then there's the low income tax offset which is available to all Australians. It's based on income and that is people who earn less than $66,667 over the course of a financial year. They are eligible for a tax offset. Now, obviously, the less they earn, the more tax offset they receive up to $700. 

Andrew: [00:08:21] The Age Pension is for people who need it most. It can help keep the lights on. If super doesn't stretch that far, the benefits add up and you can maintain independence and flexibility. Get involved and knowledgeable about your super and avoid the mistakes that so many people make. 

Bonyit: [00:08:37] I guess the biggest mistake is simply not applying at all. So that is something that some people may not be aware of their eligibility or whether they are entitled to it. And then the next one is simply pride. They don't want to hand out. They feel like those benefits may be geared towards people who are struggling financially, and that is a huge misconception. There's an article written by Retirement Essentials, where they've indicated that retirees who delay applying are, on average, missing out on $69,000. Now, that's a quite a large amount of money. 

Andrew: [00:09:10] That’s a large wad of money right there, isn't it? 

Bonyit: [00:09:12] It is. Absolutely. There's also just the complexity of it as well. You know, the income test, assets test, residency test, deeming rules as well, which is a special rate of income that the government assumes your financial assets generate. So that can be quite technical for some people. And then finally the rules differ between singles and couples. So it's definitely always worthwhile to assess your circumstances. 

Don't apply late for the Age Pension

Phil: [00:09:35] Just one thing I'd add to that as well. The biggest mistake some people make is not applying or applying for the pension too late. A lot of people don't realise that they can apply 13 weeks before they turn 67, and it doesn't get back paid. If you apply too late, you could actually be losing funds from your pension. And secondly, they can be missing out on work bonus concessions because they weren't even aware it existed. 

Andrew: [00:09:57] There's also another episode on the CBUS Super Shift podcast that goes into more detail about this called Earn Without Losing Your Pension. So do have a listen to that one as well. Now, we might not have covered every single detail in this episode, but there's a lot you can do to find out more and take control of your super. Attend an age pension webinar. Just head to the CBUS website. Search for education sessions to find one that suits you. You can also listen to more of the CBUS Super Shift podcast, which covers a range of topics to help you make the most of your super. Now, you could also hop online and use one of our calculators to get an estimate on how much age pension you're likely to receive and when you can apply for it. Our calculators can also tell you how much super you might have when you retire, and how much income that could provide. There's, of course, the website CBUSSuper.com.au. For more detail on how the Age Pension works and how to apply. And we have the CBUS Advice team who you can contact on 1300, 361 784 and find stellar support from people just like Bonyit. You can reach out to on-site coordinators like Phil, or even walk into the CBUS front counters located in each state, and you'll find staff ready to help. All of this information can also be found in the show notes of this episode. Phil, thanks very much for joining us today. 

Phil: [00:11:32] No, thank you for having me, I appreciate it. 

Andrew: [00:11:35] And Bonyit, appreciate your time. 

Bonyit: [00:11:36] Absolute pleasure. 

Andrew: [00:11:44] You've been listening to the CBUS Super Shift podcast. Listen to more episodes at CBUSSuper.com.au/podcast or follow at Apple Podcasts, Spotify, or wherever you listen to podcasts.