The Aussie Pension

There is some detail I will leave out to keep this simple. The Australian old age pension is for eligible Australians who are permanent residents or citizens who have lived in Australia for a certain period, are retired and are 67 years old or more. There isn't a retirement age in Australia but 67 is thought of as a de facto age. 

The pension is paid by the government from its general revenue, taxes if you like. Generally, wages and pensions are paid every two weeks. 

The maximum pension is about $600 a week. The pension comes with other benefits, such as cheaper electricity, gas and water, along with local government rates and medications, the latter mostly costing no more than $7.50 per prescription.

The pension is asset and income tested, but with your owned home and personal effects such as furniture, jewellery....and perhaps expensive art work hanging on your walls, are all exempt. Your motor car is not exempt, so if you take money from your bank account to pay for a new car, just because you have a lower bank balance, that means nothing. But your car is an asset that can be devalued, quite a lot as soon as you drive out of the car showroom. My new car was immediately devalued by $9,000. So at each pension review, your car's value will be part of the consideration as to what you are paid. When my next pension review happens, that will be taken into account.

I think the old age pension cuts out when you have around $720,000 in savings or in private superannuation, the figure including the value of your car. 

Superannuation, that is a scheme to provide you with money for your old age is a contribution from you and your employers to a private profit making organisation or a workplace/union based not for profit. The latter generally perform much better. Your employer may pay around 10% of your wage into super, with you paying perhaps 5% or more. You can also put in extra money, say a lump sum from your savings or whatever.

So, say you have $500,000 in superannuation, from which you draw an income of $1,000 each week, you will still receive the government old age pension, of about $115 each week.

If you have minimal money, you will receive the full pension amount of  $600 per week, plus if you rent in the private market, an extra amount.

If the dollar figures seem high to people overseas, remember Australia is an expensive country to live, and the wages quite high, with the minimum wage now being about $1,000 a week for a full time 38 hour working week. 

AU$1000 = US$700 = GB£530 = €610.