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No Age Pension from 1 July 2021!

Okay, I’ve exaggerated a little in the title (for dramatic effect). But due to a weird quirk, there will be no new people turning Age Pension age over the next six months.

It’s strange but let me explain…

The earliest age that people can receive Age Pension was once 65 and has been gradually increasing to 67 over time. Your individual Age Pension age depends on your date of birth. A visit to Services Australia website (formerly Centrelink) will show the age pension ages listed in the image above.

Sounds simple but here’s how this works in practice…

When the Age Pension age jumps from 66 to 66.5 on 1 July 2021 you might assume that if you turned 66.5 on that day then you can celebrate having reached your Age Pension age. Yes, you would be Age Pension age, but you reached that milestone six months earlier when you turned age 66.

To explain another way, every time the Age Pension age goes up by 6 months there is a 6-month period when no new people become Age Pension age (see chart below).

People will still apply for the age pension due to retirement and changes in circumstances, but the number of pension applications will be considerably reduced during this period. Will the reduction be enough to allow the hardworking to people at Centrelink time catch up on paperwork and improve phone waiting times? We can only hope.

Author
Director | Certified Financial Planner ® | B.Ec, Grad Dip FP | Authorised Representative No. 227293

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