Q: My wife and I have both recently reached qualifying age for the Age Pension. Can you please explain how Centrelink calculate our entitlements?

A: If you are age 66 or older, you are eligible to apply for the Age Pension. The maximum age pension (including supplements) is $703.50 per fortnight each for a couple. For a single, the maximum is $933.40 per fortnight.

Your Age Pension entitlement is subject to means testing. There are two components of the means testing; an Asset Test and an Income Test. Centrelink calculates your Age Pension on the test that generates the lowest eligible pension amount.

Under the Assets test, all of your assets with the exception of your family home are counted at current market value.

The Assets test reduces your Age Pension by $3 per fortnight for each $1,000 that the Assessed Value of your assets exceeds the threshold.

A couple who own their home, are currently entitled to receive the full Age Pension if their Assessable assets are less than $394,500 ($263,250 for a single). For a non- homeowner couple, the threshold is $605,000 ($473,750 for a single).

The current cut off point to receiving a part Age Pension for a couple who own their home is Assessable assets less than $863,500. ($574,500 for a single). For a non- homeowner couple, the threshold is $1,074,000 ($785,000 for a single).

For Income test purposes, Government Superannuation Pensions, Defined Benefit Pensions, distributions from Trusts and Private Companies, rental income, interest and earnings from work are counted to calculate your assessed Income.

Income from financial investments is deemed to earn a rate of return regardless of what the actual amount received is. For a couple, the first $86,200 of investment assets is deemed to earn 1% and thereafter 3%. If you are single, the threshold is $51,800. The deemed amount is included to calculate the Assessed Income.

For couples, the Income Test reduces each person’s entitlement to the Age Pension by 25 cents per fortnight for every dollar of Assessed Income over $308 per fortnight. A single person can have $174 per fortnight of Assessed Income then the Income Test reduces the Age Pension by 50 cents per fortnight for each additional dollar of income.

The current cut off point to receiving a part Age Pension for a couple is combined income of  less than $3,122 per fortnight. ($2,040.80 for a single).

To apply for the Age Pension, you need to register via your online myGov or Centrelink account. If you cannot claim online, you will need to print and complete the Centrelink Age Pension form and Income and Assets form. You can either apply individually or claim on the same form as a couple.

Applications can typically take four to 8 weeks to process, so don’t wait until you attain the relevant age. You may apply up to 13 weeks before you qualify for the Age Pension. Retrospective payment of the Age Pension is limited to the date when the application is accepted rather than when you lodge the initial request for the application. So the onus is on you to ensure you include all requirements to ensure you receive your entitlements as quickly as possible.