A super or insurance benefit might affect your Centrelink entitlements depending on whether the benefit is paid as a lump sum or a pension.
(ii) Will a Super Pay-out affect my Centrelink Entitlements?
- A super lump sum will count towards your Centrelink Assets Test when you receive a pay-out.
- However, if you keep the money in a super fund it won’t be included in your assets until retirement age.
- Super lump sum pay-outs are not treated as income.
(iii) What about Super pensions?
- Super pensions are usually treated as income and may reduce your Centrelink payments.
- Super pensions paid out as lump sums may be included in the Assets Test and not as income.
(iv) Will my Insurance Pay-out Affect my Centrelink Payments?
- Insurance lump sums for disability or death are included in your Assets Test when paid to you.
- However, some insurance lump sums with investment components are deemed to be income when received and may reduce your Centrelink payments.
(v) What about my Insurance Income Protection Payments?
- Income protection payments are usually treated as income and may reduce your Centrelink payments.
- Income protection payments paid out as lump sums maybe included in the Assets Test and not as income.
(vi) Important Note – Get help
- Before you get a super or insurance payout, you should speak to a Centrelink officer and also get advice about how the payout might affect your Centrelink benefits. See ‘Free Super and Insurance Advice Service’ fact sheet.
- There can also be tax implications of a super or insurance payout. You should check with your financial advisor.