“My wife is on a disability pension and is now eligible for aged pension. I am on aged pension and receive a carer's allowance, as I am her primary carer. I am confused as to whether to keep her on the disability pension or change over? Will it affect my carer's allowance?"
-Question from Ian in Noosa
Top answer provided by:
Kelly Mitchell
Hi Ian,
The good news for you and your wife is that the decision to stay on a disability support payment or move to age pension, upon reaching age pension age, has no impact to your ongoing eligibility for a carer allowance.
To keep getting your carer allowance you must only continue to provide care for someone and remain an Australian resident. From time-to-time Centrelink may check for changes in your care responsibilities.
For those readers who don’t know - a carer allowance is a fortnightly allowance that Centrelink provides for someone providing additional daily care to someone else, either because they have a disability or severe illness or due to their frail age. This could be a spouse or other family member such as an elderly parent.
The allowance has no asset test and has a generous income test ($250k limit) that would not come into effect when you are receiving the age pension. The carer allowance is currently a fixed rate of $136.50 each fortnight.
Full information on eligibility can be found here.
This being said, there are other considerations to be made when deciding if your wife is better to remain on the disability pension or transfer to the age pension. Centrelink will generally have invited you to apply to transfer to the age pension approximately 13 weeks before reaching age pension and you will have to nominate your preference.
As far as the payment rate is concerned, the maximum payment rates for disability support and age pension are the same and where you are receiving a part payment - i.e. less than the maximum payment rate - both are impacted by the same income and assets thresholds.
The greatest benefit to transferring is that there are no longer any medical rules or medical reviews applicable when you receive an age pension – it is only influenced by age, assets, and income (and Australian residency).
If you elect to remain on disability support, you’ll need to meet all obligations to keep getting the payment, which may include medical reviews. There are no hard and fast rules around when medical reviews will be conducted and will depend on your wife’s individual circumstances and how long she has been on the disability pension for. A review can be requested by Services Australia at any time.
On the flip side, there are some supplements that a disability support pension would continue to provide such as a higher rate of mobility allowance or rent assistance, if relevant to your personal circumstances.
Seeking personal advice from a qualified financial adviser can be a great way to help you to assess based on your circumstances whether it is better to continue receiving the disability support payment or whether to transfer your wife’s payment to the age pension.
There are also several useful guides to disability support payments, age pension and other payments and allowance that can be viewed online here, including eligibility, how to apply and what the payment rates or allowances are.
Kelly Mitchell
FM Financial Pty Ltd
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