Will a UK Pension affect my Australian Centrelink payment?
When you compare a UK Pension and Australian Centrelink, the short answer is that it might affect a Centrelink payment.
Foreign pensions received by a person paid an autonomous age pension, are normally assessed under the ordinary income test – i.e. they reduce pension by 50 cents for every $1 of comparable foreign pension received, over the income free limit.
For a single person, if your total pension, and any other earnings, are under $168 per fortnight, then it will not affect your Australian Centrelink Aged pension.
If your total pension, and any other earnings, are over $168 per fortnight, then your Australian Centrelink Aged pension will be reduced by 50 cents for every $1.00 that your other income exceeds the $168 per fortnight.
UK Pension and Australian Centrelink Combinations.
Examples of Possible Fortnightly Payments for Single Person:
- $800 Australian Centrelink Pension (this figure is used an example only, and is not the actual pension figure)
- $160 UK Pension and any other income
- $960 Total Income
- No deduction, you get to keep $960
- $800 Australian Centrelink Pension
- $170 UK Pension and any other income
- $970 Total Income
- $1 deduction. $170 less $168 threshold = $2. Half of that equals the $1 deduction
- You get to keep $969 ($970 less $1).
- $800 Australian Centrelink Pension
- $180 UK Pension and any other income
- $980 Total Income
- $6 deduction. $180 less $168 threshold = $12. Half of that equals the $6 deduction
- You get to keep $974 ($980 less $6).
- $800 Australian Centrelink Pension
- $400 UK Pension and any other income
- $1,200 Total Income
- $116 deduction. $400 less $168 threshold = $232. Half of that equals the $116 deduction
- You get to keep $1,084 ($1,200 less $116).
Examples of Possible Fortnightly Payments for Married Person:
If you are a married person, then your income figures are joined together, but you get a higher combined threshold of $300 per fortnight, although this is NOT double the single threshold.
The above figures (assuming the spouse has no income) would then become:
- $800 Australian Centrelink Pension (this figure is used an example only, and is not the actual pension figure)
- $160 UK Pension and any other income
- $960 Total Income
- No deduction, the $160 is under the $300 threshold.
- You get to keep $960
- $800 Australian Centrelink Pension
- $170 UK Pension and any other income
- $970 Total Income
- No deduction, the $160 is under the $300 threshold.
- You get to keep $970
- $800 Australian Centrelink Pension
- $180 UK Pension and any other income
- $980 Total Income
- No deduction, the $160 is under the $300 threshold.
- You get to keep $980
- $800 Australian Centrelink Pension
- $400 UK Pension and any other income
- $1,200 Total Income
- $50 deduction. $400 less $300 threshold = $100. Half of that equals the $50 deduction
- You get to keep $1,150 ($1,200 less $50)
Upper Thresholds
Your Age Pension will be cut off totally, when you reach the maximum fortnightly thresholds of:
- $1,944.60 Single Person
- $2,978.40 Married Couple living together
- $3,853.20 Married Couple living apart due to ill health
Note: Other Income:
The term “UK Pension and any other income”, encompasses any other income that you might receive. This can include any interest received, net rental income, part time work, etc.
Note: Centrelink Exchange Rates:
Centrelink changes all overseas income to Australian dollars for the income test. The exchange rate changes on the first working day of each month.
The normal exchange rate used is the buying rate from the Commonwealth Bank, checked 5 working days before the 1st of each month.
However, You can ask to review an exchange rate if there’s more than 5% difference between the rate they used and the actual rate used by your bank to change your income into Australian dollars. You do need to show proof of that rate.
The rate for the ‘English Pound’ at 30/6/17 was 0.6220 (I saw the term ‘English Pound’ (at http://guides.dss.gov.au/family-assistance-guide/3/2/4) and wondered if they had a different rate for the Scottish Pound. Not sure why they didn’t use the term ‘British Pound‘). The quoted AUD-GBP rate of 0.6220 is equal to 1.60772.
Current FX rates can be checked on the Centrelink Foreign Exchange line: 1800 050 041 During Monday to Friday: 8 am to 5 pm.
Sources:
dva.gov.au Factsheet IS98 – Foreign Pensions
humanservices.gov.au Exchange Rates
www.humanservices.gov.au/…/income-test-pensions
Related Pages of Interest:
Income Tax on a UK Age Pension received in Australia.