Well, from the vantage point of 2025, Australian pensioners will avail themselves of increased Centrelink Age Pension benefits through financial strategizing up to $780 annually. This piece of write-up describes how this increment takes place and to whom it relates as well as what you will have to do to take advantage of it.
Understanding the $780 Centrelink Pension Increase
The Centrelink Age pension can see an increase of $780 a year as it reduces assessable assets through prepaid funeral arrangements. The Centrelink asset test determines how an individual receives their pension, based on their personal assets.
Therefore, when a prepaid funeral plan is purchased by a pensioner, it leads to a reduction in assessable assets. Each $1,000 spent on a prepaid funeral will generate an additional annual pension payment of $78. In other words, if you invest $10,000, it can actually bring the total increase of the annual pension to $780.
Eligibility Criteria
To gain this benefit, a person must already be in receipt of the Age Pension. It must also be relevant to the assessable assets the person has, which Centrelink uses in determining the pension amounts. Lastly, an entitlement is created when any of these individuals enters into a prepaid funeral plan as an eligible form of asset diminution under the rules of Centrelink.
Steps To Secure The Pension Boost
Select a reliable funeral service provider with prepaid plans that lock in today’s prices. Protect yourself against future price increases and inflation.
- Next, decide how much you want to invest in your prepaid funeral services. Every $1,000 you spend will increase your pension by $78 per year. You can make the largest possible investment of $10,000 which results in a $780 increase.
- Before making the buy-in, it would be best to check with Centrelink to ensure that it qualifies for their asset exemption. Once you have that confirmed, complete the prepaid funeral plan.
- Then, inform Centrelink about your investment. They will reconsolidate your records and adjust the assessable assets to increase your pension corresponding to the expected benefits.
Things to keep in mind
While this may be the avenue to increase your pension, you must think about the consequences this will have on your finances. All around, investing in a prepaid funeral plan should fit into your overall financial plan so that your budget doesn’t buckle.
Additionally, with time, Centrelink policies are likely to change. Be keen on any updates about politicians affecting the treatment of prepaid funeral plans.
Consult with a professional. Financial advisers can help you understand how this investment will affect your finances and estate planning.
With wise investment in a prepaid funeral plan, an Australian pensioner could earn up to $780 more each year from Age Pension payments. This small “top-up” can make all the difference in the cost of living during retirement.