Age pension age increasing
From 1 July 2017, age pension age for both men and women is increasing.
Clients born on or after 1 July 1952 will need to be 651/2 to qualify for the age pension.
The qualifying age will gradually increase to age 67 for both men and women as set out in the table below.
|Men and women born…||Pension age|
|1 July 1952 and 31 December 1953||651/2|
|1 January 1954 and 30 June 1955||66|
|1 July 1955 and 31 December 1956||661/2|
|1 January 1957 onwards||67|
Implications for advice:
- Cash flow considerations as clients need to fund living expenses until age pension commences
- Many clients work until they qualify for age pension so retirement may be delayed
- Superannuation in accumulation phase in a younger spouse’s name will be exempt until they reach age pension age, which could be up to age 67
- Eligibility for Commonwealth Seniors Health Card (CSHC) will be delayed as age pension age determines CSHC eligibility. Clients may want to consider the Low Income Health Card until they reach age pension age (see Strategic Update article: Low Income Health Card Income test for more information)
- Senior Australian Pensioners Tax Offset (SAPTO) eligibility may be delayed as SAPTO is only available where the client is Centrelink age pension age during the financial year
- Pension age for non-veterans receiving pensions from the Department of Veteran’s Affairs is also gradually increasing to 67.
The information contained in this ‘Did you know’ is based on the understanding Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) has of the relevant Australian laws as at 1 August 2016. As these laws are subject to change you should refer talk to a professional adviser for the most up-to-date information. The information is for adviser use only and is not a substitute for investors seeking advice. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person, including Colonial First State or any other member of the Commonwealth Bank group of companies, accepts responsibility for any loss suffered by any person arising from reliance on this information. This update is not financial product advice and does not take into account any individual’s objectives, financial situation or needs. Any examples are for illustrative purposes only and actual risks and benefits will vary depending on each investor’s individual circumstances. You should form your own opinion and take your own legal, taxation and financial advice.
Colonial First State is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.