Keeping Centrelink up to date: A guide to Age Pension reporting obligations

Robert Barnes

So once someone is receiving Age Pension, what information does Services Australia receive automatically and what do people need to update themselves to make sure that they’re still receiving the right amount?

Justin Bott

Yeah, so this is back to one of the other myths that is out there in that I don’t need to tell anything because you’re government and you know everything anyway. And in the majority of cases, that’s actually not the case. For the majority of cases, We don’t know what’s happening and it is actually up to you to let us know as your circumstances change. And there are only a few circumstances where that’s different, but that’s only updating information you have already given us. So when you lodge the application for the pension, assume we know nothing, assume we have no information on you whatsoever because we don’t. A lot of people think that when they, you know, when they sit down with a customer service officer, that customer service officer can just hit Alt+Tab on their computer and they can bring up their St. George bank accounts or the Commonwealth Bank accounts or whatever. We can’t do that. We don’t We don’t have that authority or that power. We need you to tell us what you’ve got so that we can then assess your income correctly, which means that if your circumstances change, we need you to tell us that they’ve changed.

We cannot assume we’re getting that information from anywhere else. Now, there are a few little hedges in there that I want to put where it is automatic, but again, it’s only automatic once you’ve told us about it in the first place. So The first thing is on the 20th of March and 20th of September every year, your, the rate of pension is indexed, but that’s not the only thing that happens. The other thing that happens on the 20th of March and 20th of September every year is that all of your listed shares and your unit-based managed funds, the value of those unit-based and the value of the shares are updated on those days. So if the value of the shares have moved between the 20th of March and 20th of September, You actually don’t need to tell us of changes at the value of your shares because we take care of it. We accept the fact that they will go up, they’ll go down, but we’ll take the value of the 20th of March to the 20th of September. You do have to tell us if the number of your shares have changed. So if you bought some, sold some, received some as a dividend reinvestment, but you don’t have to tell us if the value of those shares have changed.

So that’s something that we do automatically. Another thing that we do is in February and August each year, for the majority of superannuation funds that are in an income stream, like an Account Based Pension, we update the balances of those. If you’re getting defined benefit pensions or military pensions, we update those as well. So that’s an automatic process. And the third one is about, again, those property, the real estate, the holiday homes, the investment properties. What we do with those is that we will index them based on market movement in the area that the property is at. On the anniversary of when your payment started. So every year we’ll just do an automatic property valuation. So again, if my property was worth $800,000 and 2 years later it was worth $850,000, there was no single date where it jumped up from one price to another. It’s just property prices are revalued. So we’re not asking you to tell us of particular values at particular times. We will do that ourselves once a year. So again, we’ll take care of the valuations. You don’t need to worry about those. Apart from those, any other significant changes, like changes to your bank accounts, changes to your personal circumstances, you will need to tell us about them.

It is quite a— when you think about it, it can be quite a long list. So what we recommend with that one is if you actually look at the letters that we send you, whether you get them actually physically in your letterbox or whether you get them in your myGov inbox, Have a look on the last pages because they will often include a list of things that you need to tell us about. The other thing that you can do is again go to our website servicesaustralia.gov.au and just search ‘Tell Us’ and there will be, there’s a page there that’s got the comprehensive list of the things that you are required to let Services Australia know about. And the big message here is you’ve got to tell us within 14 days. So if any of these things happen to you, let us know within 14 days to make sure that you’re keeping us informed of your circumstances if they change. A lot of these again, Can be done online through your myGov account linked to Centrelink. But tell us within 14 days to make sure you’re keeping yourself covered.

Robert Barnes

And so, yeah, so just to be clear on the super side, so you’re getting a feed from the super funds in terms of all of their super accounts. So both accumulation and payout?

Justin Bott

No, no, only income streams. Income streams. Only on the income streams. Yes. So when you moved it into pension mode. So we don’t get updated balances of super funds. The majority, from Services Australia’s perspective, if your super is just sitting in a super account in accumulation, we don’t count it until you turn age pension age anyway. So the majority of our customers, we don’t need to know about their super balances. It’s not counted as an accessible asset. It is when you turn age pension age, but not beforehand. So basic super funds where it’s in accumulation, we don’t need to know about. If you’ve got a self-managed super fund, unfortunately we can’t link with those. So you, there are, you’ll need to, or your, either your fund, your, the people that you’re running the fund through, your accountant will need to update the balances for those for us. But that still happens in February and August. But if you’ve got an Age Pension managed fund that’s through a normal commercial fund that you’ve purchased, then by far the majority of those are automatically giving us updated balances in February and August. So you’ll just notice If there has been any big change that you’ll notice, a change in your pension will occur around that time.

Robert Barnes

But yeah, you’re suggesting the vast majority of changes in circumstances, people should let you know. Obviously with income, so work income, employment income, would that, what’s the best way to do that? What’s the most efficient way to do that? Because even though myGov, well, I guess you’re not seeing people’s tax information in terms of you know, what they’ve recently earned, the pay, PAYG, all of that kind of stuff.

Justin Bott

Yeah. So what happens with that for most people, your tax return’s not helpful for us. Now that’s a very different circumstance if you’re self-employed or running a business, it’s all about the tax returns for that one. But if you’re earning a wage or if the business is paying you a wage, then we are actually needing you to report your income every fortnight. I was going to say, if you’re self-employed and you’ve been self-employed for a while, we will actually just put you on a yearly reporting in that You tell us when you lodge your tax return, and as long as nothing significant changes during the year, we’ll see you next year when you lodge your next tax return, and we’ll just base your income on 12 months and talk. So it’ll always be that little bit old because it’s always going to be based on a tax return that’s already happened. If you think, just as an aside, if you are running your own business or you’re self-employed and something big has changed, like you maybe you’ve lost a particular customer and that income doesn’t reflect where you are any longer. Then we can get that covered through things like profit and loss statements, profit and loss schedules, where you tell us what your new income levels are.

That’s fine. But other than that, it’s just lodge a tax return and we’ll see you in 12 months when you lodge your next tax return. If you’re earning a wage, you’re actually going to be putting on a, you’ll be put on a fortnightly reporting schedule that you’re going to tell us what you’ve earned as the gross income in that fortnight. And you’ll either do that, generally speaking, again online through your myGov account. There is a special phone number that you can ring in where you are only reporting your income to the computer over the phone if you prefer to do it that way. And you, we can set it up either way for you, but you’ll report every fortnight. So it’s going to be more you confirming the income that your employer has already told us that you’ve earned rather than you actually having to do things like show payslips or anything along those lines. So when we have it linked up, then your reporter, your, sorry, your employer will tell us through the Australian Taxation Office what that fortnightly income they’ve got is. You’re going to be looking at that comparing to what you did actually earn.

Are they correct? And if that’s the case, then you’re confirming that income and then your payments will go on from there. But you will be put on a fortnightly reporting when you are actually earning that wage.

Robert Barnes

Right. So each fortnight you will need to log in or phone up and just confirm, uh, Confirm the income.

Justin Bott

Yeah. Okay. Once you’ve done it, you’ll be, it’s a very quick process. And it’s because it’s more of a confirmation. It’s actually even easier than it used to be. But again, you can, instead of ringing the normal payment line, you’re just ringing directly into the computer. So there’s no delays from that, or you just do it online with myGov. And again, if you need help with that, have a chat with your digital coaches. They can teach you how to do that as well. Sure.

Robert Barnes

And then other major, so assets changes. Can they all, are they all done online as well? So say you take a lump sum out of your super, spend it on a holiday, or put it in the bank. You can just update that online pretty easily, can you?

Justin Bott

Yes, you can. You will need, we’re going to need to, depending on the size, we’ll need proof. So small changes, when you’re doing things online, if it’s a small change, I think it’s like under, from memory, it’s like under $10,000, then it just accepts it and that’s done. But bigger changes of doing it online, you’re not actually updating your record, you’re providing information that will then be checked by customer service officer in the background. And so supporting documentation is always going to help. So that’s one of the big tips. If I was doing something like I accessed a lump sum from super, then we want to see the super fund that shows the balance is reduced. We want to show a bank statement that shows the money that went in and then potentially that same statement to show that the money went out, paid for a holiday. Here’s the evidence of where it’s all going. All of which again, you can do with your phone just using the scanning or the photo feature of your phone. And all of those documents can just be linked together and added to that activity and then can be as evidence for the customer service officer.

You can always, if you ring up, they’ll still want to see the documentation. You can either then bring it to your local service centre or you can go in and do the changes with the service centre as well. So if you’re not the sort of person that does things online, you absolutely can still do it through over the phone. Or visiting your local office, I’ll take care of it as well for you.

Robert Barnes

And say you’re not working, you don’t make any major changes, are there still some kind of timeframes when you’d recommend just checking in and reviewing the information that you have on them and just making sure it’s up to date? Every 3 months, 6 months?

Justin Bott

There’s no, I mean, if nothing significant has changed and all the big changes occur because when they do occur, we catch them because they’re automatic processes, then there’s nothing that you really need to do. There are a couple of little caveats on those, I guess. So maybe the 1st of January or 1st of July is a good reminder to do a bit of housekeeping. So the first thing is that I mentioned the household contents and personal effects. They’re not, we don’t reduce them as life goes by. So they don’t depreciate. I remember the word. They don’t depreciate. So if you put in a car, $30,000, they said your car was worth $30,000 5 years ago, it will still be sitting on your record as valued at $30,000. We don’t reduce the value even though the years have gone by. Oh, we all know that if I did try and sell that car, there’s no way I would get $30,000 for it 5 years later. So it may be that one of the things that you want to do is just have a look at things like car values, have they updated them recently? Are they actually reflected what’s happening?

We will take care of things like, um, with the notification requirements, you have to tell us if things increase. So if your bank balances go up by $2,000 or more, your financial assets rise by $2,000 or more, you’re required to tell us that that’s happened. You’re not required to tell us if they’ve reduced in value. So if your assets are dropping, but if you’re getting a part Age Pension because of your income or assets, reduction in assets may well lead to an increase in what we pay you every fortnight. So if the market is going, you know, particularly if you’ve got shares or other assets that are in the market and you notice that they’re going down in value, that’s the sort of time you might want to say, oh, let’s have a bit of an update because I think I might actually be entitled to more pension than I’m getting right now. So That might be something that you want to keep in the back of your mind. You don’t have to tell us, but it might be to your benefit to do that. If you’re getting the full rate of pension either way, then it’s not going to make any difference to you because we’re paying you the full rate.

We can’t pay you anything more than the full rate. But if you’re getting a part rate pension because of your income and assets and you notice that there’s a downturn or reduced things have reduced in value, might be to your advantage to let us know. So just keep that in the back of your mind.

Robert Barnes

And are there any mistakes that you see commonly happen, you know, once people are on the Age Pension?

Justin Bott

I think one of the biggest ones is that I didn’t think I needed to tell you because I thought you either, you already knew, or, you know, the guy at the pub told me that I didn’t need to tell you. That’s just not the sort of thing that Service Australia need to worry about. Or the neighbour said something along those lines. And a great example for that is something like the buying and selling of shares. So say I sold shares in Company A and then I bought shares, exactly the same number of shares for pretty much exactly the same value in Company B. They’re treated exactly the same. There’s no change in the assessment because they’re valued at exactly the same. They’re valued exactly the same today. They’re not necessarily valued the same in 3 months’ time when we, the 20th of March or 20th of September occurs and we revalue pension eligibility. So not telling us about the change of circumstances can long-term lead to differences in the rate of payment, what you are getting and what you should be getting, both in a positive way and a negative way. Just simply because you didn’t think, oh look, it made no difference when I did that.

So Services Australia didn’t really need to know. The best thing to do is just again, have a look at that tell us list and make sure that you’re continuing to do that. That is the way to make sure everything’s safe.

Robert Barnes

So changing shares from Company A to Company B, you do need to know about Company B. And that’s because obviously each share will go up and down, you know, be valued differently over time.

Justin Bott

Yeah. So when you, when you tell us the shares, then there is this background link with the ASX, meaning that on that 20th of March or 20th of September, we get the new share prices and we look at who’s got shares. Oh, they have. And then we revalue based on the information that comes through. If the share information you have is no longer correct, then we’re revaluing shares based on assets you don’t own, which means that maybe they’ve gone up in value more than what you do have. Pension goes down because your assets have gone up unfairly. Or they’ve gone up in value and we didn’t know about it and we’re paying you money we shouldn’t have because you actually own more than you should, own more than we know about and we potentially have to ask for some money to get back. But it’s actually on that listing that you’ve got to tell us of change in the number of shares within 14 days. Yeah.

Robert Barnes

And talking about shares, what about, how does dividend income react with deemed income? How do you account for that?

Justin Bott

That’s a great question. So the only thing that happens when you receive a dividend from our perspective is that your bank account has changed. So we, when you are telling us about a dividend, you’re not actually telling us about the income because we’re not, we don’t ask about the income. We just need to know what you did with the money. And if it’s, you know, it’s a couple hundred dollars, then no major difference to anything. So shares are what we call a deemed financial asset. So we add them to things like your bank accounts. Managed investments, you might have loans where you’ve lent money to somebody, excess gifts over the $10,000 that we talked about beforehand, or super or a lot of account-based pensions. And we call them deeming because we don’t look at the actual income that you’re receiving from those funds. We don’t ask you what the interest rate on your term deposit might be. We don’t ask you what the drawdown rate you’ve chosen to take from your account-based pension is. We deem it as a fixed rate of income. So we decree or declare or deem that all of these financial assets together, we add them all together and we just say that there is a fixed rate of income that you are getting from those products.

And the interest rate that we say that you are getting is either 1.25% for a lower figure, which differs if you’re a single or a member of a couple, or 3.25% at the higher deeming rate. And so we use it, we’ll use the dividends for example. So say your shares paid the dividend, which is the equivalent of 8%. They don’t pay you 8%, they pay you a fixed based on profit of the company, but we’ll translate it to be the equivalent of 8%. We actually don’t care that you’ve received 8%. That’s not what we’re looking at. We know we want to know that you’ve received $325 and potentially put in your bank account. That would be too low. We want to know that you received $35,000 and put it in your bank account. That’s much more the story. But the fact that it’s 8% is irrelevant because we’re deeming you to have been receiving every day 3.25% from those shares, regardless of when the 8% is actually paid. So it’s not about when you get the dividend from an income perspective. It’s not what the ATO looks at because we’re not the Australian Taxation Office.

We’re Services Australia and we do things our way. It’s those fixed interest rates that we say that you’re getting from the fund. The only reason we care about the dividend is actually, as I said before, what has hit your bank account and what you do with the money.

Robert Barnes

So are there any small oversights that people might make that can end up having a really big impact over time?

Justin Bott

Well, again, it’s those things where you think it really doesn’t matter when it ends up doing— it does matter. So we talked about the Work Bonus and you know, you might have looked and saw that you’ve got a Work Bonus balance of $11,800, the maximum. You worked for a couple of weeks and you knew that that income wasn’t going to actually affect you because you understood how the Work Bonus works and therefore you said, oh, I don’t need to let them know because I was going to get full Age Pension anyway. No, that’s not what we need to do. Even if you know that the change is not going to have an impact on your rate of payment, if it’s one of those changes on those lists, then you’ve got to let us know. Because it might not have an impact now, but it has had an impact on your Work Bonus balance, which if you’re working on and off and on and off, can have an impact some point down the track, down the future. Another good example would be the gifting rules. So $10,000 in a single financial year, but no more than $30,000 over a 5-year period.

What if my gift is that I help my daughter out with rent ad hoc? Every now and then I’m helping my daughter out with rent. So it’s $200 here, $500 there. It’s not fortnight by fortnight, so not regular. It’s under the $10,000 in a single financial year. But I had one gentleman where it was under $10,000 in a single financial year, but it became $50,000 in 3 and a half years, and then was assessed that any gift that he made was then treated from that point onwards. But because he was working under this $10,000 rule, he didn’t actually properly do the maths. So we had to go through gift after gift after gift, a whole lot of individual little amounts to work out when did he actually have an effect on his eligibility. So even though it was small and even though it was under those limits, it’s still something that you need to let Services Australia know about because by itself it might not do anything, but when added to other behaviours and other changes, it can have an impact in the future. So again, the safest method is again website servicesaustralia.gov.au, check Tell Us, look on the letters to see what the list says, and then just keep within those rules and you’ll be fine.

Robert Barnes

So obviously it’s, it’s important to let you know within 14 days. If it’s a difficult time, so someone might lose a parent, get an inheritance, which affects their assets level quite a lot, and they might forget to update, you know, for a month or two. What would happen in that situation?

Justin Bott

Yeah. So if we are talking about an accidental, haven’t, there was an accident, I didn’t intend to not let you know, but it just too much was going on. Then the worst that will happen is if you’ve received new assets that we weren’t looking at and it may have meant that you’re not entitled to the payment that you were receiving, then we will ask for that money to come back. Now in saying that, any debts that arise that are $250 or less, we don’t do anything about, but if it’s bigger than that, then we will ask for it back. The other side of the story is that if you don’t tell us of changes and you actually become eligible for more payment than you were beforehand, you’re just missing out on some of the pensions, the increases that could have occurred. So, Tell us within 14 days, make sure that you get, if you’re eligible for more, we’ll, we’ll get that covered. And if you’re eligible for less, then you let us know within 14 days and you’ve stopped any debts from being paid. But a debt is just simply, uh, we paid you money we shouldn’t have.

Could you please give it back to us? If it was whatever that might be. Um, I will say that when it comes to a debt, let us tell you, you owe us money. Let us tell you that there is a debt that actually exists and then how much it is. Don’t, we have people that want to repay. So, oh no, I’m not entitled to it and this is what I’m not entitled to. We’ll take care of that. Wait until you’ve actually received notification to be told that you do owe money and then how to repay it as well.

Robert Barnes

So what, so how does that process happen and what is that process called? Is it called a review and what is the normal kind of trigger for those kind of incidents?

Justin Bott

So a trigger for the incident would be when we do finally find out what’s happened and then we investigate when it happened. It tells the full story and then we find out again, using the inheritance option as I’ve received $100,000 from an inheritance, but I actually got it 2 months ago. Where’s your bank statement? Oh, we could see it from the bank statement. And when we then put that money in from the day that you did receive it, did that have an impact on your Age Pension? If it did, then we would say, oh, okay, again, you received money you shouldn’t have. There’s a debt. That’s just part of our normal processing. When you tell us sort of your change of circumstances, when did it happen? What’s happened? A review is when you, Well, you don’t agree with the decision you’ve made, basically. So if something happens and you don’t think that’s right, which is entirely right, you’re well within your rights to do that, then you can request a review of the decision. And that means that it will go to somebody, an independent person will look at it and see what’s happened and explain to you about what’s going on.

And it’s the first stage of the full appeal process, depending on how far you want to take these sorts of things. It’s very simply a case of if you rang us up, for example, went into your local service centre and said, look, you did this, my rate’s changed. That’s, that’s not right. Can you have a look at it? You ask for a review. That’s as complicated as it is. And then we’ll go through the process and have a look and say, did we do the right thing? Was the information correct? It’s really important to say that if you are asking for a review, any additional supporting documentation would be really handy to give us to help us with that process as well. So, oh, by the way, here’s this, here’s another letter from solicitor, here’s something from a doctor, or here’s another proof of where the money went. That would be really helpful to give to us to just help us review the whole decision-making process. Yeah.

Robert Barnes

Are there any horror stories that people should learn from or, you know, say there was a massive debt, you know, circumstances weren’t updated for quite some time. What’s the worst case scenario there? Or is it generally, do you have payment plans organised and things like that?

Justin Bott

Yeah. So I mean, the horror stories is when this debt was not an accident, but there was somebody deliberately trying to defraud the agency, which is a very different story because by far, I mean, Services Australia looks after and provides support to millions of people across the country. And by far, by far, the majority of those millions of people are doing the right thing. And if they ever have debts that’s raised against them, it’s just simply a matter of, I didn’t let you know about something, not because I’m deliberately trying to get money out of the government that I’m not entitled to. So when it is just that simple issue, it’s, uh, we’ve paid you money you shouldn’t, can you please pay that money back? Um, you, if you’ve got the money available, we’ll give you the ability to pay it all off as a lump sum. If you’re still getting payments from us, then you can come up with repayment plans. We can We can come up with other arrangements that might suit you and things that you can change as well. So you’ve got quite a lot of power about how, whether you can afford to make the payments or not.

The best thing to do is to actually give you a ring. So when you get a, if a debt is raised, you get a letter that explains it and explains why, and there’ll be a phone number on that letter. Ring us, have a chat with the person about the debt that’s being raised about, certainly if you don’t understand why, they can explain that to you. And if you need to come up with a payment arrangement, then you can have a chat with the person over the phone about what grounds or how you’re allowed to make that happen. So you can just have a chat. The best thing to do, it’s not, there’s no judgement on the side of the person that’s raising, that’s raised the debt. It’s not about whether you’ve done the right thing or wrong thing. It’s just about there is money that you received that you actually weren’t entitled to. And it’s because not only are we responsible to try and make sure we’re paying people what they’re entitled to, but we’re also responsible to the Australian taxpayer to make sure that every taxpayer’s dollar is being used correctly. As a consequence of that, we say, oh, this is money that will need to be repaid.

You have a debt. If you have questions about the debt or want to talk about repaying that debt, then ring the number that’s on the letter and they’ll have a chat with you about it.

Robert Barnes

Fantastic. Any final tips in terms of good habits that people should create if they’re on the Age Pension in terms of making sure that, yeah, they’re receiving the right amounts and keeping you guys up to date?

Justin Bott

Yeah, so good habits for ease of access and ease of doing your business. Number one good habit is making sure you’ve got that myGov account set up and it’s linked to Centrelink and linked to Medicare and linked to whoever else you want to use. That’s a good habit. It’s also just as a reminder, myGov itself is a doorway that gives you access to the different agencies. myGov doesn’t hold information in itself. So if, for example, you sign into myGov and then choose to do your business with the Australian Taxation Office, If you change the bank account with the Australian Taxation Office, myGov doesn’t then pass that information on to Centrelink or Medicare or Transport or any of the other 15 other agencies that are linked to your myGov account. So if you do change for one, it’s do one, do all would be the big message for that one. So update one, update them all, use the opportunity while you’re there. So yeah, doing good business using myGov, using your phone. So using the app and the passkeys, which is your phone. Features, facial recognition, so smooth and convenient way to access your records doing that.

So that’s really one good tip about doing it that way. But other good habits, again, just every now and then, have I got the details up to date? Remember what the list of things that I need to tell Services Australia about, so I make sure that I’m telling them within 14 days. Always having that in the back of your mind. Have I told Services Australia? Do they know that this circumstance has changed? Well, if I haven’t told them, assuming they don’t, So make sure that I’m keeping them up to date on all the information that I’ve got. That’s the really the big one. And maybe as we said, use the 1st of January, 1st of July as a reminder to just do a review of where’s everything at. Have a look and say, oh yeah, everything’s where it should be, or my bank balances are a little bit different. Let’s make, spend the time to update those. Yeah.

Robert Barnes

Fantastic. Well, thanks so much, Justin. That’s been really, really insightful. Thank you for taking the time today. We’ll hopefully we’ll have another interview with you soon.

Justin Bott

Yeah, absolute pleasure.