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You're listening to Exploring Super, the exclusive podcast for ESS Super members. 

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Welcome to Exploring Super, the exclusive podcast for ESS Super members. 

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My name is Christian Kueng and I'm the Manager of Member Education. 

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And today I'm joined by... 

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Felicity Brasher and I am the Group Executive of Member Engagement. 

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And today we've got the very lovely Adam Chen joining us. 

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Adam is a member education consultant here at ESS Super and he's come to explain how Centrelink assess superannuation for the aged pension. 

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Some of our members have lifetime pensions and these are treated a little different to the average Australian superannuation account. 

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And we're going to clarify some of that today. 

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Thanks for coming in today, Adam. 

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Thank you for having me, Christian. 

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So Adam, I've already mentioned that you've come in to explain a few things about Centrelink. 

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So maybe before we get into the nitty gritty, you can firstly explain a little bit about the age pension. 

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The age pension is a federal government payment that's designed to provide financial support to some of our older Australians who've reached retirement age, with the current pension age being 67. 

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Now, bear in mind all this information is accurate as of the 

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of recording, February 2025. 

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The benefit is means tested, which means that the government will assess the members' eligibility for the pension by looking at the values of what they have in their assets and their income. 

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Okay. 

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Now, superannuation is definitely assessed, and that's what we're going to go through today. 

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Everyone just needs to also be aware that there are other assets and income that are also assessed outside of superannuation. 

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But today, we're not going to discuss that in our podcast. 

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And we are just going to focus purely on the superannuation side, whether it's a defined benefit, whether it's an income stream, or whether it's a lifetime pension that you have with us. 

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Great. 

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Now, we are going to cover a couple of different areas, ranging from how the asset test works, how the income test works, deeming rates, partner assessment, lifetime pensions, 

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And we're also going to go through healthcare cards and some concession cards that members might be eligible for. 

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The first test for age pension is actually the age test, which is 67 years of age. 

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Then there's a residency test. 

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Assuming you pass that, then Centrelink will assess both your asset and income. 

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Thanks, Adam. 

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Sounds a pretty comprehensive list there. 

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So how does Centrelink actually assess your superannuation accounts? 

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There's a couple of things they assess. 

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And we're going to firstly look at asset test and how that impacts the Centrelink assessment. 

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When you reach age pension age, all your superannuation accounts will be assessed. 

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Okay. 

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Whether it's in an accumulation arrangement, income stream, some of our members have lump sum accounts, all the ones that have lump sum values will go towards both the asset and income test. 

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Okay. 

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And all these assessments generally look at the last annual statement value, which we can regularly provide for members when they request it. 

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Sure. 

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For lifetime pension members, where our members get paid a fortnightly pension for the rest of their life, now these do not go against the asset test. 

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Right. 

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And they only go through the income test. 

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Okay, that makes sense. 

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And again, we'll go through that later on in today's podcast. 

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As mentioned earlier, we're only looking at superannuation assessments through Centrelink, but we're not looking at any external assets or income. 

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That's something that the members need to go through with Centrelink directly. 

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Right, okay. 

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Yeah, it makes sense. 

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So you mentioned the income test, Adam. 

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Can you talk to us a little bit about how the income test is looked at in terms of superannuation accounts? 

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How is that assessed? 

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The income test uses a deeming rate calculation. 

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Okay, so I'm not sure everyone who's listening will know what a deeming rate is. 

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What does that mean in reality? 

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What would that mean to a member? 

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So what a deeming rate is, Centrelink uses their own calculation and assumes a certain rate of return on your lump sum investments. 

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And then they use that calculation to work out an income 

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that is used against the income test for Centrelink age pension purposes. 

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Okay, so if the deeming rate was like 3%, say, and you had $100,000 in superannuation, it would assume that you're earning $3,000 a year. 

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Is that how it works? 

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Exactly correct. 

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So they're not too concerned around what interest you're getting. 

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You could be earning more than that. 

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You could be earning less than that. 

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But they are using that deeming rate calculation against your lump sums for income test assessment. 

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Right. 

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Okay, that makes sense. 

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Now, when it comes to the deeming rate, they will deem income stream accounts as started on or after 2015. 

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If you were receiving Centrelink income support on the 1st of Jan 2015 before account-based pensions prior to January 2015, they use a different 

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type of calculation. 

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Right. 

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Okay. 

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So maybe we don't have to worry about that today, given it's 20 or 25. 

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Excellent. 

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So Adam, where can members get more information about deeming rates? 

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Now, the deeming rates, the calculation that Centrelink uses can be found on the Services Australia website. 

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And every time those rates are updated, you can actually find that information on the website. 

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Yeah, great. 

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Excellent. 

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Thank you. 

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Now what about the lifetime pensions? 

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You mentioned our lifetime pensioners or the defined benefit pensions. 

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What's the impact there? 

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Now I'm aware that some of our members do have lifetime pensions and generally these are payments that we pay members for the rest of their life. 

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Now those pensions don't actually have a capital or finite value because they pay it until the member passes away. 

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So therefore Centrelink assesses these pensions 

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under the income test only and not against the asset test. 

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Okay. 

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Now, when they assess these under the income test, they assess the gross amount minus a deductible percentage. 

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And generally, the deductible percentage, which is also called the tax-free component, they do put a cap on that. 

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It's generally limited to 10% of the gross pension amount. 

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Okay. 

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Now if you do want more information around what that tax-free component or deductible percentage is, we're more than happy to provide you with a Centrelink schedule that you can pass on to Centrelink and all that information will be on there. 

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For members who are after a Centrelink schedule, you can actually download that yourself via your Members Online portal. 

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That makes it easy. 

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Always available. 

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And you'll always be able to download an up-to-date one that you can pass on to Centrelink when they request it. 

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Perfect. 

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Excellent. 

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Yeah, good. 

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Now, depending on the member's history, they may have up to 10% of their lifetime pension not assessed as income for the income test. 

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So like I said earlier, please refer to the Centrelink schedule for that information. 

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Okay. 

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Now, most funds also allow you to access your superannuation investments when it comes to lifetime pensions. 

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But some funds restrict access while you're still working. 

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So if you're unable to access your superannuation investments, you may be able to have it exempt from income and asset test. 

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Now, generally speaking, we often refer members back to Centrelink if you are in that situation. 

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Sure. 

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But for all ESS super accounts, these are actually assessed. 

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Okay. 

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It's important to know that the income tests won't look at how much you're drawing down. 

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from your superannuation benefit. 

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It is just the deemed earnings that they're after. 

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Right. 

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Okay. 

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So with Centrelink, Adam, quite often if you're in a partnership, if you're married or de facto or what have you, I believe that your partner's assets, superannuation, what have you, is also implicated in what you can get. 

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Can you talk 

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Talk to us a little bit about what a member's partner's account, how that might impact their Centrelink benefits. 

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Now, we're aware that sometimes couples don't reach age pension age at the same time. 

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Sure, yep. 

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And often there might be an older or a younger spouse. 

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Now, if your partner is already at age pension age, and obviously you're at age pension age, everything between the two of you from a superannuation perspective 

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they're both assessed. 

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Right. 

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However, if your partner is below age pension age, things are treated just a little bit differently. 

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Okay. 

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Now, when you're applying for the age pension, if you do have a younger spouse below age pension age, then the younger spouse's defined benefit accumulation plan, pretty much all their superannuation that is not in an income 

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generated pension is actually exempt from Centrelink assessment. 

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Okay, but if I was, say, 62, so under age pension, and I had started an income stream, that would be assessed. 

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Correct. 

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So Centrelink will assess superannuation if you are receiving a pension or what they call account-based pension or retirement income stream, transition to retirement income stream. 

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All those 

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streams where they pay you a regular payment is assessed under income test. 

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Centrelink will also assess your superannuation and assets of the income outside of superannuation. 

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Okay. 

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Now we said that we're just going to focus on the superannuation side of things, but members just also need to be aware that external incomes that your partner might be working or earning, they also form a part of 

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your assessment. 

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Yeah, I know we're not talking about that, but so their assets, any sort of assets, I'm guessing, are pretty well assessed apart from things that aren't assessable. 

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Assets in income, correct? 

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That's right. 

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Correct. 

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Thanks, Adam. 

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That makes it a lot clearer. 

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So obviously a lot of our members out there are very interested in the cards and the concession cards that you can get. 

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So can you give us a little bit of detail about the concession cards? 

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A lot of members who are receiving the age pension, they're entitled to the concession card. 

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Now Centrelink will assess your superannuation and your other assets outside of superannuation, but the concession card is a one card that a lot of members hopefully will be able to get as it provides them with discounts on rates, utilities and certain rebates. 

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Excellent. 

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Now for our members, 

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Sometimes you don't, won't qualify for the concession card. 

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There are other cards that Centlink offers. 

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Okay. 

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And the main one that a lot of members could potentially qualify for will be the Commonwealth Seniors Healthcare Card. 

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Right. 

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Okay. 

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The limits for these cards are income test based and not asset test based. 

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Right. 

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Okay, that's a bit of difference. 

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So for a lot of our members 

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who do have a little bit of a higher asset that knocks them out for the concession card might be able to qualify for the Commonwealth Seniors Healthcare Card. 

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So what's the benefit of the healthcare card, Adam? 

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What sort of things does that give members? 

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The Commonwealth Seniors Healthcare Card will provide members with discounted prescription and medicinal needs. 

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Great. 

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OK, definitely a benefit. 

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So Adam, you've been really helpful today with telling us so much about the age pension and so forth. 

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For members who haven't, they're not quite at that stage, perhaps you can talk to us about what they can do in the lead up to getting to age pension age. 

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What are some things they can work on or do to help themselves? 

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There are a lot of information out there that members can utilise to 

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prepare themselves for applying for the age pension. 

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But one of the main things that I would say would be, try to begin this application process, ideally a month or two, before you reach age pension age, and start having that conversation with Centrelink. 

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Now, 

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If you're after all the statements and all the values for all your superannuation related accounts, start making contact with *** Super and requesting those figures so we can provide them for you for your application. 

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Can members? 

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get that information themselves as well with Members Online? 

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Do they have that access? 

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Members Online is an online portal that members can go in and actually grab the majority of their statements, leave up to about 10 years. 

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Wow, okay. 

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They can also run live Centrelink schedules if you're in an income stream or lifetime pension arrangement. 

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Sure. 

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and you can use that and provide that to Centrelink as well. 

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Perfect. 

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So members can self-serve if they want to. 

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Obviously, we're here to help too, but if they wanted to, they could just jump on and grab that all themselves. 

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Yeah, correct, correct. 

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Excellent, excellent. 

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Now, when it comes to all the different thresholds and deeming rates and rules around assessment, we're aware that as of today, these figures might be a set figure. 

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However, when you reach age pension age and apply for it, 

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it might change. 

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Sure. 

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So we always say to refer members back to the Services Australia website so you can have a look, keep up to date to make sure that the limits and the criterias are adhered to. 

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Sure. 

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Yeah, excellent. 

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Now from our end, it is an AWS Super Podcast and we do provide and assist members when it comes to navigating 

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through Centrelink. 

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Now we do offer Centrelink specified lunch and learn webinars and we also do have navigating retirement seminars that members can attend either in person or over Zoom that they can listen to and learn a little bit more about how the Centrelink process actually works. 

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That's a great idea for members to do that. 

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How can they find the seminars? 

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How can they how can they book in? 

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Our seminars are on our public website. 

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Great. 

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And members can just jump on, have a look if the time suits them, and book it in and attend. 

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And there's no additional cost for any of these webinars, are they? 

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Completely free, completely free. 

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And you can always attend more than one if you need to. 

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Of course. 

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Perfect. 

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The lunch and learn sounds great. 

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Our webinars, our lunch and learns, they do provide general guidance for our members when it comes to SendLink. 

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However, 

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We're aware that everyone's situation is a little bit unique, so therefore, if you are looking at applying for the age pension, you can also contact Centrelink directly if you need further clarification about your personal circumstances. 

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Yeah, that's a great idea. 

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Now, I'm aware that when it comes to age pension, sometimes it is a very complex... 

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environment to navigate through. 

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What I always say is seek further general financial advice if you do need assistance. 

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Understanding how Centrelink assesses your superannuation is crucial for planning your retirement and ensuring that you receive the benefits you're entitled to. 

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Thank you so much for coming in today, Adam, and sharing all your insights about Centrelink. 

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We look forward to having you back on the podcast again. 

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Thanks for having me, Felicie. 

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That wraps up our episode today of Exploring Super, the exclusive podcast for ESS Super members. 

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We look forward to producing more content for you at ESS Super, proudly serving our members. 

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If you'd like more information about our investments and products, please go to essuper.com.au. 

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This podcast is of a general nature only and does not consider your personal circumstances, financial needs or objectives. 

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Before acting on any advice contained in this podcast, please download and read the relevant product disclosure statement and target market determination found on our website, esssuper.com.au. 

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The board recommends that you seek financial advice before acting upon this information. 

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Benefits in ESS Super's accumulation plan, income streams and beneficiary account products are not guaranteed or underwritten by the Victorian Government or ESS Super. 

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Content was up to date at time of recording and thresholds do change due to federal legislation. 

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For more information on the age pension, please refer to the Services Australia website, www..servicesaustralia.gov.au.