Question 1. I am experiencing continued non-payment of legislated (SG) superannuation payments by my employer – what can I do?

This can be very frustrating and has been an ongoing issue for many people.

The vast majority of employers do the right thing, but there is a small group that is not following the rules, which is a form of wage theft.

I would recommend to everyone to stay on top of the payment of their SG contributions – a good way of doing this is by downloading your super fund’s app where you can monitor that contributions are being paid.

This is very important, given recent changes like the SG increasing to 10.5 per cent on July 1, 2022 and the removal of the $450 per month threshold before SG has to be paid.

You can then follow the below steps:

• Talk to your employer first, clear up any misunderstandings and seek a commitment from them that they will pay what is owing to you
• Refer to the ATO website, which has a useful guide on recovering unpaid super
• If you are not satisfied with your employer’s response, contact your super fund as many of them offer a service to follow up employers on your behalf
• Finally, if the above is not successful you can report them to the ATO.

Question 2. I am about to inherent a large sum which will take me $250,000 over the aged asset test. I have been looking at Challenger and Q Super Lifetime Annuities but I don’t like the concept of my money being tied up until death. Any suggestions so as I can still get the aged pension or at least the Health Care Card.

Both the Challenger Lifetime Annuity and QSuper Lifetime Pension offer asset and income test concessions under the age pension.

The trade-off is that you are giving up a lump sum and access to capital to receive a guaranteed lifetime income stream.

Both these products have their place, but you would never put all of your money into them.

You could look to put just enough into one of these products to obtain a part age pension and the pension concessional card, if that was a high priority of yours.

Only 60 per cent of the purchase price of these products count under the asset test, reducing to 30 per cent once you attain age 84. Sixty per cent of income received is counted under the income test.

Otherwise, you may have to wait until you spend/draw down your assets over time until your level of assets is under the asset test cut off (currently $622,250 for a single home owner and $935,000 for a couple [combined] home owners).

Also, if you do miss out for the age pension, you can still apply for the Commonwealth Seniors Health Care Card which has no asset test and a very generous income test level (currently $61,280 per annum for a single person or $98,050 per annum [combined] for a couple).

Question 3. I get a pension for life from my super with ESSSuper. It is worth $30,000 at present (CPI indexed). I think it renders me ineligible for an age pension. Is that correct?

Not necessarily, no.

If you are single you can earn over $58,000 (as at September 2022) under the income test and still receive a part age pension.

You are well below this figure, so even if you have other financial assets that come under deeming, you may still receive a part age pension.

This is worth following up or putting an application in with Centrelink.

Question 4. How is super treated on the Centrelink income test?

If you are under age pension age super is not income or asset tested, unless you convert it to an income stream (pension).

Once you do convert it to an income stream, or once you attain age pension age, whichever is sooner, Centrelink will asset test the balance and use deeming to determine how much to assess under the income test.

Deeming is a set of rules used to work out the income created from your financial assets. It assumes these assets earn a set rate of income, no matter what they really earn.

Craig Sankey is a licensed financial adviser and head of Technical Services & Advice Enablement at Industry Fund Services

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives. 

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