If an unforeseen event happens such as disability, a Total Permanent Disability (TPD) payout can be a financial lifeline. Despite this lifeline, you might be asking, what will happen to my Centrelink payments? Will the TPD payout affect my regular benefits?
In this article, we will help you understand how a TPD payout could potentially affect your Centrelink entitlements and some tips to consider that may help maximise your income.
Do TPD payouts affect your Centrelink pay?
When a TPD payout is paid to your superannuation account, your Centrelink payments are not directly affected as the superannuation balances are not included in Centrelink’s assessment of income and assets until you reach the Age Pension age.
But what if you withdraw your super? In this case, your Centrelink benefits, such as your Disability Support Pension, might be affected. Centrelink will likely reassess your income and assets and may consider your adjusted taxable income including any income from superannuation withdrawals.
To help you navigate your TPD claims and how will it affect your Centrelink payments, reach out to TPD claims experts and we will help you navigate your way through a highly complex landscape.
Centrelink pensions and allowances explained
Before trying to maximise your Centrelink entitlements after a TPD payout,, you will need a deeper understanding of what impacts your Centrelink payments. Here’s a quick guide.
To determine your eligibility for social security payments, Centrelink uses Assets and Income tests.
- Assets Test: This test will assess the value of your assets, including things such as real estate, financial assets (cash, shares, etc), and other personal tangible assets that you own in full, in part, or have an interest in including assets outside Australia.
- Income Test: This refers to income you receive, from various sources, and will be assessed by Centrelink to determine your entitlements. Examples of income include items such as salary, investment dividends, rental income, and other government payments or allowances.
Exceeding the threshold limits on either test would decrease or stop your Centrelink payments.
Disability Support Pension (DSP)
For individuals who are receiving the Disability Support Pension (DSP), withdrawing a TPD payout will likely affect the Centrelink income test.
However, not all Australians with disability are eligible for the DSP and therefore the impact of a TPD payout will change from person to person. There are Non-medical and Medical Rules that need to be met to be eligible for the pension and you can read more about this here.
For non-medical rules, Assets and Income tests will form part of Centrelink’sassessment.
Asset Test
Assets within and outside of Australia are part of the Centrelink assets assessments. Below is a quick guide on the limits for a full pension.
| YOUR SITUATION | HOMEOWNER | NON-HOMEOWNER |
|---|---|---|
| SINGLE | $314,000 | $566,000 |
| A COUPLE, COMBINED | $470,000 | $722,000 |
| A COULPE, SEPARATED DUE TO ILLNESS, COMBINED | $470,000 | $722,000 |
| A COUPLE, ONE PARTNER ELIGIBLE, COMBINED | $470,000 | $722,000 |
Please note that the information in this table is current as of 20/11/24 and is subject to change. Please contact us prior to acting on this information to confirm its accuracy.
The total value of assets that are beyond these limits will have to be reduced by:
- $3 per fortnight, if you’re single
- $1.50 per fortnight for each member of a couple
Threshold limits and Creditlink payment reductions for part pension and transitional rate of pension can be read here.
Income Test
This is a quick guide on how much a TPD payout can reduce your pension. Read more about the income test and transitional rules and rates here.
| TOTAL INCOME PER FORTNIGHT | AMOUNT YOUR TOTAL PENSION WILL REDUCE BY | |
|---|---|---|
| SINGLE PERSON | Up to $212 | $0 |
| Over $212 | 50 cents for each dollar over $212 | |
| COUPLE LIVING TOGETHER OR APART DUE TO ILL HEALTH | Up to $372 | $0 |
| Over $372 | 50 cents for each dollar over $372 |
Please note that the information in this table is current as of 20/11/24 and is subject to change. Please contact us prior to acting on this information to confirm its accuracy.
JobSeeker Payment
For Australians between the ages of 22 and the Age Pension age who are looking for a job, or is ill or injured that can’t perform work or study, JobSeeker Payment is a financial support that they can avail. Provided they meet some of the rules:
- Age is between 22 and the Age Pension age
- Residence Rules
- Income and Assets tests
Asset Test Threshold
Your payments will be cancelled once the total value of your assets reaches these limits.
| FAMILY SITUATION | HOMEOWNERS | NON-HOMEOWNERS |
|---|---|---|
| Single | $314,000 | $566,000 |
| Couple combined | $470,000 | $722,000 |
| One partner eligible, combined assets | $470,000 | $722,000 |
Please note that the information in this table is current as of 20/11/24 and is subject to change. Please contact us prior to acting on this information to confirm its accuracy.
Income Test
Below are the income limitations that can reduce your payments to zero.
| FAMILY SITUATION | PAYMENT REDUCES TO ZERO ONCE YOUR INCOME REACHES THIS AMOUNT PER FORTNIGHT |
|---|---|
| Single with no children | $1,479.00 |
| Single, 55 years of age or older and have been getting payment for at least 9 months continuously | $1,583.50 |
| Single, principal carer of a dependent child younger than 16, granted an exemption from mutual obligation requirements | $2,715.75 |
| Single and a principal carer with a dependent child younger than 16 | $2,273.75 |
| Single, with a dependent child younger than 16 but not the principal carer | $1,572.17 |
| Partnered | $1,368.00 for your income $2,568.34 for your partner's income when you have income less than $150 |
Please note that the information in this table is current as of 20/11/24 and is subject to change. Please contact us prior to acting on this information to confirm its accuracy.
Read more about Centrelink’s assets and income tests for JobSeeker Payment here.
Age Pension
For seniors in Australia, an Age Pension is a government benefit that can support their basic living standards provided they meet the eligibility requirements.
- Age requirements
- Residence Requirements
- Assets and Income Tests
Asset Test
Creditlink will assess the total value of all your properties (fully and partially owned or have interest in) whether within or outside Australia to determine how much you can get paid for Age Pension. Below is a quick guide on the limits for a full pension, exceeding these limits will reduce your payments.
| YOUR SITUATION | HOMEOWNER | NON-HOMEOWNER |
|---|---|---|
| SINGLE | $314,000 | $566,000 |
| A COUPLE, COMBINED | $470,000 | $722,000 |
| A COULPE, SEPARATED DUE TO ILLNESS, COMBINED | $470,000 | $722,000 |
| A COUPLE, ONE PARTNER ELIGIBLE, COMBINED | $470,000 | $722,000 |
Please note that the information in this table is current as of 20/11/24 and is subject to change. Please contact us prior to acting on this information to confirm its accuracy.
Limits for part and transitional rate pensions can be found here.
Income Test
To be eligible for Age Pension and determine the amount of payments, Creditlink will assess the senior’s income. Below are the limits for standard income test rules.
| TOTAL INCOME PER FORTNIGHT | AMOUNT YOUR TOTAL PENSION WILL REDUCE BY | |
|---|---|---|
| SINGLE PERSON | Up to $212 (free area) | $0 |
| Over $212 | 50 cents for each dollar over $212 | |
| COUPLE LIVING TOGETHER OR APART DUE TO ILL HEALTH | Up to $372 (free area) | $0 |
| Over $372 | 25 cents for each dollar over $372 |
Please note that the information in this table is current as of 20/11/24 and is subject to change. Please contact us prior to acting on this information to confirm its accuracy.
Other limits for transitional rules can be found here.
Is your TPD claim rejected? Work with Curo Financial
Before worrying about a TPD payout affecting your Centrelink payments, your TPD claim must be approved first.
If your TPD claim was previously rejected, don’t lose hope yet. Get in touch with TPD claim experts. We have helped hundreds of rejected and declined TPD claims get approved. Our risk-free model is best for individuals who are looking to get a second chance on their TPD claims.
Talk to us and we will work with you to claim your benefits. Send us a message here.
How Curo can help maximise your TPD payout
Taxes and understanding the impact of TPD payouts on Centrelink payments should be considered to maximise the payouts. Understanding the technicalities and intricacies of these would be helpful in deciding how one should access the fund.
At Curo Financial we provide expert and customised TPD claims advice to individuals who would want to maximise their TPD benefits. Our decades of experience working with different individuals with different financial situations and goals have allowed us to be a sought-after TPD claims solutions provider.
Our job is to help you maximise your TPD payout which will align with your current financial situation and goals.
Frequently Asked Questions
Does superannuation payout affect Centrelink payments?
Do I have to tell Centrelink if I withdraw money?
Does TPD payout affect DSP?
How much is a lump sum payout for TPD?
General Advice Disclaimer: The advice provided is general advice only and in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.
