“My wife is on a disability pension and is now eligible for aged pension. I am on aged pension and receive a carer's allowance, as I am her primary carer. I am confused as to whether to keep her on the disability pension or change over? Will it affect my carer's allowance?"
-Question from Ian in Noosa
Top answer provided by:
Robert Daniele
Hi Ian and thanks for your question,
It comes up a lot this question and on face value there aren’t a lot of differences however, there can be a few moving parts which I will try to address.
Firstly, to determine your level of age pension or disability pension – Centrelink will run a “means test” which looks at the amount of assets you have and the amount of income to determine your eligibility for a payment and how much of a payment you receive. This remains the same whether your wife is on disability support pension or on an aged pension.
Will the amount of payment change?
The amount of the payment your wife is on with the disability support pension or the age pension remains the same.
What are the potential tax implications?
I am not sure of your wife’s current taxable position however, the disability support pension becomes taxable once she reaches age pension age. This is no different to the age pension which is already taxable. If she isn’t getting any other income from other sources other than a superannuation income stream (unless it is comprised of untaxed amounts) – this shouldn’t be an issue.
Work/study
I will assume in this instance that your wife isn’t working or volunteering and has no plans to, if she is or does plan to work or study, there are certain limitations with the disability support benefit but there can also be certain benefits in the way of study assistance payments or a higher rate of a mobility allowance to travel to work.
Other considerations
If you do have in mind a sea change and plan to move overseas, the age pension eligibility is a lot more lenient for extended periods of time travelling overseas.
If you live on hectares of land – moving to the age pension may assist to exempt anything over 2 hectares from the asset test subject to a number of conditions (whereas, the disability support pension doesn’t account for this).
If your wife does move to the age pension, she will no longer need to have Centrelink continue to assess her eligibility from a disablement point of view (however, Centrelink from time to time may still review your eligibility for your carer allowance based on the amount of care you provide her).
Both the age pension or disability support pension for your wife will continue to let you be eligible for carer allowance (and the carer payment, if you are receiving this). Please note Ian this is all general in nature and it is always best to confirm what is right for your particular situation by speaking to a licensed financial adviser, where they will take into account all of your personal circumstances.
Thanks,
Robert
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