Centrelink is a polarising topic, but there are many ways to make it work for you! Using specific strategies, you can increase your entitlements or become eligible when you were not previously.
Centrelink is a polarising topic. Some clients I speak to want to be able to get it come hell or highwater, even if it means disposing of assets. Others do not want to come within a 100 kilometers of it.
My take, if you can set yourself up to be financially independent, to the point where you do not need or are eligible for Centrelink - that is a great outcome. If you can qualify, why not? You paid your taxes all these years.
Unknown to many, there are actually financial strategies that can allow you to increase your entitlements or even become eligible when you were previously not entitled.
Spend more money on your house
Your house does not count in the means test for Centrelink. Therefore, if you spend money on renovations, that money you had in other assets (bank or super) is no longer assessed. Potentially making you eligible for the age pension and increasing your retirement income. The downside is that you lose the ability for the money to be invested along with the rest of your retirement savings.
Annuities
Annuities are a great way to increase your Centrelink entitlement. You get an income stream for life and only 60% of the money invested is assessed for the means test, potentially increasing your entitlement or making you eligible for Centrelink. The downside is that you lose the ability to access the capital once the annuity is commenced.
Funeral Bond
A funeral bond allows you to set money aside for your funeral and that money is not assessed for Centrelink. A good outcome for something that you will need to set capital aside for anyway.
Restructuring of Assets
There are also ways to restructure your assets to ensure they are not all assessed for Centrelink. This can also increase entitlements or make you eligible, depending on your situation. This is a more complex strategy, so if you want to look into this, please seek advice from a licensed financial planner.
Conclusions
There are numerous ways to improve your Centrelink entitlements, all of which help to reduce the drawdown of your retirement savings, or free up more money to spend on lifestyle.
This article is general in nature and not intended to be used as personal advice. We recommend you seek personal financial advice before implementing any strategies.
Contact Prosperity Wealth + Advice to discuss how we can help you with your retirement planning.
Commentaires