Right to move super before it’s just too late

I AM 62 years old, earn $90,000 per annum, and I also salary sacrifice $1700 a month into super. I have $125,000 in an online bank account and also shares worth $25,000. Should I move my money from online banking into super or is it a case of getting on the train too late?

You are at the perfect age to put money into super because once you reach 65 you will not be able to contribute unless you pass the work test. The work test involves working at least 40 hours in a year, over 30 consecutive days. The benefits of super are that earnings are taxed at just 15 per cent and when you start the accountbased pension, the fund will be from a tax-free fund. WE are 65 and 62. In a recent article it was claimed that at age 65 it is possible for a couple on the full age pension to receive $67,252 a year tax free. This sum was comprised of a $34,252 a year pension, plus $13,000 (combined) from parttime work and $20,000 drawn from their super.

Is this possible? Isn’t it true that the other income will cancel out the age pension?

The figures add up because the couple could each earn $125 a week from casual work, which would not be assessed by Centrelink, and withdrawals from their superannuation are not taxable nor are they treated as income for Centrelink purposes. Their taxable income would be $23,626 each but no tax would be payable thanks to the Senior Australian and Pensioner Tax Offset.

However, the figures are somewhat contrived. Their total assets including superannuation, bank accounts, furniture, motor vehicles, etc could not exceed $375,000, and they would have to be in a position where both were willing and able to perform casual work.

The $20,000 from their super is simply a drawdown of their capital so any number you choose may be used. The example is really saying a couple on the full pension could earn $125 a week each from casual work, and make withdrawals as they wish from their super. I UNDERSTAND that to be eligible for the Centrelink age pension, there is an income test and asset test. Being a retiree aged 66 with retiree wife aged 57, will the tests be on both combined income and assets, or will it be on my own income and assets?

The tests look at total family assets and income – but bear in mind that money in superannuation is not assessed until pensionable age.

Therefore, to maximise your Centrelink entitlements you should be trying to maximise the amount that your wife has in super. You could even investigate withdrawing money you have in your superannuation, if there is any, and contributing to her super.

The benefits of super are that earnings are taxed at just 15 per cent and when you start the account-based pension, the fund will be from a taxfree fund