There are many factors that influence your eligibility for the age pension and how much age pension you will receive.
If you are in a couple, your age pension amount is likely to be quite different to if you are a single person. It will also differ if you have more assets or a plentiful supply of other income compared to someone with very few assets and no other source of income.
If you separate from or divorce your partner and you receive a government age pension, you need to tell Services Australia within 14 days.
Your change to marital status and living arrangements could affect your age pension. If your age pension should be reduced due to your change of circumstance and you don’t advise Services Australia of your changed circumstances straight away, you could end up having to pay back any amounts you were overpaid.
You can find information about how to tell Services Australia of your break up/divorce, how to apply for a divorce, register for spousal support and update your information on the Services Australia website.
Other things to update
When you contact Services Australia to tell them of your changed circumstance, make sure that you update your details with them too. This can include your bank account if your pension previously went to a joint bank account, and your new address if you have moved house. Remember to remove any third party access that your ex may have to your records at Services Australia or with any other organisations, such as banks, credit unions and other government agencies. You can also update your Medicare card if you shared a Medicare card. Find information about updating your Medicare Card on the Services Australia website.
Services Australia and other organisations may need evidence of your identity, ownership of shared assets or they may ask for a referee to confirm your relationship status. You can find out more about what Services Australia needs on their website and in myGov. Other organisations should be able to provide you with details of what they’ll need if you contact them.
Change to living situation
Where you separate and one person moves out of the shared family home, the home is no longer the principal residence of the person who moved out. Therefore, their share of the house will count towards that person’s asset test for the age pension (assuming that they own the home and weren’t renting). In some cases, however, some special conditions may apply that mean the house may not count for that person’s asset test, or may count for a lesser amount. We recommend you speak to a Services Australia Financial Services Information Officer to learn whether any of those special conditions could apply in your case.
If you own your home with your partner and choose to sell it and split the proceeds, you need to be aware of any impact on your age pension.
If you plan to use your portion of the sale proceeds to purchase another home to live in, the money you plan to use to buy your new home may not count towards your asset test for the age pension for the first 24 months while you look for a home. That is because money earmarked for your new home will be assessed at a lower rate than other cash in the bank would be. Services Australia will still consider you a ‘homeowner’ for age pension assessment purposes if this is you.
If, however, you do not plan to buy a new home to live in and plan instead to invest your proceeds into the bank, your super or another investment, it will count towards your asset test for the aged pension. The level of assets you have will impact on the amount of age pension you will receive.
Read more about Services Australia’s requirements when you separate or divorce at their website. Divorce and the age pension are interlinked, so you need to make sure you’re aware of what you may need to address and update.