Cockies get break thanks to Centrelink
It’s a leftover concession from the Howard government era that means many older farmers could be missing out on valuable Centrelink benefits.
Sometimes referred to as the “cockie’s exemption” it allows access to the age pension and valuable concession cards once a person reaches age pension age, presently 65½.
The lucrative perk is one of dozens of tips which WA financial adviser Nick Bruining details in his new book, Don’t Panic: More reasons you don’t need $1 million to retire well.
The book is a fully revised and updated version of his first Don’t Panic project, which ran off the shelves when it was published in 2015. The new edition is 50 pages longer than its predecessor, contains a bonus “ready-reckoner” of figures and thresholds important to retirees and has a pull-out household budget planner.
Importantly, in the banking royal commission era, Don’t Panic: More reasons you don’t need $1 million to retire well has lots of information about what fees and charges are reasonable and how you can choose a financial adviser.
The so-called cockie’s exemption comes about because Centrelink age pensions do not require you to stop work in order to claim. Having reached the eligibility age, you simply need to satisfy the means test conditions. Centrelink has two tests based on income and assets and the test which produces the lowest pension is the one used.
For a couple on the land, income needs to be under a combined $79,736 to qualify for a small part pension which also gains access to the valuable pension concession card.
The concession card provides substantial discounts on medical and government utilities and services worth anything from a few hundred dollars to several thousand a year, depending on your circumstances.
For singles, that threshold is $52,119. In both cases, planned changes to the rules surrounding a special incentive program to keep seniors in the work force kick in on July 1, 2019. That will effectively lift the cut-off thresholds to a generous $59,919 and $95,336 for singles and couples respectively.
By far the more significant means test that usually has farmers thinking they have no hope of a claiming a pension is the asset test.
Over and above the family home and the 2 hectares it sits on, assets must be less than $848,000 for a couple to qualify and for singles, $564,000.
The special concession for landowners is an extension to the asset test exemption for the family home beyond the normal two hectares.
Provided the property is on a single title, you have lived there for 20 years and the property is being fully utilised, having regard to your age and the property itself, the entire parcel of land could be exempt. The exemption does not extend to stock, plant or crops on the property.
Full utilisation means you must endeavour to make full use of the property, but at 85 for example, you wouldn’t be expected to be chasing 3000 head of sheep and tending to hundreds of hectares of wheat.
Alan Standring, 86, is affected by the cockie’s exemption. He moved to his Cowaraump dairy farm more than 50 years ago and while he stopped producing milk in 2000 he decided to see out his retirement on the farm, enjoying a part age pension while continuing to utilise the farm as best he could.
“I have everything I need on the farm, it’s been my life longer than I can remember and I really can’t see any reason why I would want to leave,” he said.
Retired Cowaramup dairy farmer Alan Standring is eligible for different Centrelink concessions.