29 Nov Secret Centrelink
For this article, I would like to explore some lesser known Centrelink legislation that can be used to improve individuals and couples Centrelink outcomes.
- When one or both members of a couple move into a care situation, they are treated by Centrelink as Separated by Illness. For the purpose of calculating Aged Pension entitlements, this means that although they continue to be tested under the couples income and assets tests, they are paid at the single rate of Pension, i.e. maximum pension payable rises from $826.50 to $1096 per fortnight.
There is an additional benefit to this that many are not aware of. For a couple living together in their home, the Age Pension cuts out completely once their assets (aside from the home) reach $1,003,000. Where a couple are separated by illness, due to the higher Pension payable, this figure rises to $1,183,000, meaning that a couple who were never receiving a Pension, may suddenly qualify for at least a part pension where one or both enter a care situation.
Where a couple sells their home having entered care, the asset limit as a non homeowner rises from $1,245,000 to $1,425,000 meaning that couple can own $180,000 more in assets before losing the pension completely.
- Distinct from the situation above is where individuals are no longer a member of a couple because the relationship has broken down and there is a level of physical and/or emotional estrangement, resulting in one or more parties having no intention to reconcile. In this case the couple may be considered living separately under the one roof and therefore assessed and paid as singles rather than members of a couple.
Generally, the above will occur due to a conscious decision by one or both members of the couple, however it can also occur involuntarily.
Take the situation where one member of a couple has entered into a care situation with dementia. They are no longer able to provide any type of support to their partner, and no longer carry on their lives as members of a couple. In this instance, the partner at home can apply to be considered as singles, rather than members of a couple.
Care needs to be taken here however, as for most Age Pensioners, with primarily joint assts, eg their home, as being tested as singles for the income and asset test will often result in lower payments (remember they are already entitled to the single rate of payment), and the home assessed against the person in care 2 years after entering care.
Where this is beneficial, is where there is a younger, healthy partner who is still earning an income and would not qualify for an Age Pension. Or a second marriage, where the healthy partner owns the majority of assets (including the home). Where that partner is earning say $80,000pa, that is assessable against them as a couple and both partners are paid a pension based on that combined income, half of which is also assessable against the partners aged care fees.
If however, they are tested as singles, the partner in care may have little assets and no income, meaning their aged care fees are reduced and a full pension becomes payable.
It is crucial to seek advice prior to going down this road however to ensure you do not find yourself in a worse situation.
- Lastly, I’d like to explore the situation where Centrelink has made a mistake that has cost the Centrelink customer money. Unlike mistakes in the customers favour (by the Customer or Centrelink) that can be subject to repayment for an indefinite period, mistakes made by Centrelink only result in repayment of losses for up to 90 days prior to Centrelink being made aware of their error. I.e where a Pensioner has been underpaid by Centrelink for 5 years, due to a Centrelink error made 5 years ago, Legislation states that repayments can only be made for the 90 days prior to the Pensioner advising Centrelink of that error.
Of course, many pensioners, would have no idea that Centrelink has even made that error!
We have however had success seeking redress for clients through the CDDA scheme which allows forCompensation for Detriment caused by Defective Administration.
It allows for compensation to be paid where it can be established that the customer has suffered a financial or non financial loss due to defective administration on Centrelink’s behalf. Defective administration is defined as an unreasonable failure by an agency to implement appropriate administrative procedures, to comply with existing administrative procedures, or to provide proper advice. The fact that Centrelink has made an error is not sufficient in itself to give rise to a payment under this scheme – it must also be established that the error in question was unreasonable.
If any of the above raise issues for you, I would welcome your call on 9525 7977.
In an upcoming article, I will be providing information on Granny Flat arrangements as they apply to Centrelink.