From January 1, 2022, clients born between July 1, 1955, and December 31, 1956, will start reaching their Age Pension age (pension age) of 66.5. These clients may ask whether there are any legal ways to obtain or maximise Age Pension entitlements. Similarly, younger clients who haven’t yet reached their pension age may also wish to obtain (or maximise) Centrelink payments such as the Disability Support Pension (DSP), Carer Payment (CP) or Jobseeker Payment (JSP).
Sheltering money in super accumulation phase can significantly increase Centrelink entitlements until the owner reaches pension age.
Where a client is a member of a couple and their partner has not yet reached pension age, a strategy that can deliver significant increases in Age Pension is taking assessable super money from the client who has reached their pension age and shifting it to their partner where it will be exempt from means-testing.
Sheltering money in super might also be beneficial for single clients who have not reached their pension age and are looking to either obtain a Centrelink entitlement or increase one they are currently receiving.
However, there are many matters to consider before implementing such a strategy. In this Technical Journal, we’ll revisit the ”sheltering strategy” and how it can work for your clients.