MY MONEY

Ask Paul: Can we spend enough to qualify for the pension?

3
Share on Facebook
Share on X
Share on LinkedIn

By

Dear Paul,

After the sale of our house, do we have to provide evidence to Centrelink of what we spend our money on, if we go on a spending spree for age pension cut-off purposes? - Will

Thank you for your question, Will.

Ask Paul Can we spend enough to qualify for the pension

Fortunately, while we have perfectly sensible rules guarding our pension system, I am pleased to say that you can spend your money how, when and where you like.

You may be thinking of the deprivation provisions, where you can only gift up to $10,000 a year and $30,000 over five years and have this count in your income and assets test for the pension.

So, you could gamble, drink or smoke your money away, fly business class overseas, or do whatever you please with no impact on your pension.

But let's pause for a moment. Throwing away money on stuff you don't really want is nuts.

Sure, I appreciate as you have less money and less investment income you will get more pension. Let's look at the income test. As a couple, your living-together pension cuts out at $3836.40 combined a fortnight, so you may be eligible for rent assistance.

For each dollar you earn under this, until you get to the amount where you get maximum pension, you increase your pension by 50 cents.

Life is short. I understand that after the sale of your house there are things you will want to do. A holiday or a new car, for example.

But my head is full of questions. Why not buy yourself a smaller home or apartment that is an exempt asset for pension purposes and draw full or near full age pension without having to pay rent?

Despite some extra assistance for non-homeowners, all evidence is that life is easier for pensioners who own their own home. They also have an asset to sell if and when healthcare is needed.
Regardless, before you go on any sort of spending spree, I really want you not to waste money.

I also want you to sit down, seek advice if that helps and make a sensible decision regarding the money you have to invest, your housing situation and a logical analysis of what is a sensible amount of money to have invested, supported by a full or part pension.

One thing I can tell you for sure. If you waste money to improve your pension, you won't ever get it back.

Get stories like this in our newsletters.

Related Stories

TAGS
, 
3
Share on Facebook
Share on X
Share on LinkedIn

Paul Clitheroe AM is the founder of Money and serves as the publication's editorial adviser. One of Australia's most trusted personal finance experts, Paul has spent decades helping Australians build wealth, manage debt and make smarter money decisions. He is widely known for host­ing the Money TV program and authoring best-selling personal finance books. Since launching Money in 1999, he has played a leading role in delivering practical, independent financial guidance to Australians. Paul is chair of InvestSMART Financial Services. He was the founding chair of Ecstra Foundation, a national not-for-profit focused on improving financial wellbeing, from 2018 to 2026, and led the Australian Government's Financial Literacy Board and Financial Literacy Australia from 2004 to 2019. In academia, Paul is chair in financial literacy at Macquarie University, where he is also a Professor in the School of Business and Economics. Ask Paul your money question. Due to volume, Paul cannot respond to questions posted in the comments section.
Comments
Hayley C
August 14, 2025 3.31pm

Or Will could manage his money and be a self funded retiree rather than spending what money he has so he can get the pension.

Ian Geach
August 16, 2025 9.37am

Hi Paul,

I have retired at 69. I am drawing a super pension. My wife 59 has reduced working to 3 days per week but will likely retire at age 60. Using the tests for age pension would we qualify for full age pensions as long as we keep our assessable assets at the $481500 regardless of how much we have in super.

Keith Black
August 18, 2025 5.34pm

I am 67 married and living in Thailand with my wife and 13 tear old Daughter.

We purchased a nice 3 x 2 home with a pool and Sauna for $120.000aud

Out monthly expenses are $1350.00 aud which includes everything.

My pension from Centerlink gives me $2,200 per month.

My superannuation of $600K has been rolled over to my pension. account.

I have to drawdown5% every year and last year my pension returned 8.7%.

I have taken the 5% out of Australia and that now affords us to travel twice a year.

So yes as a a pensioner you can have a far better quality of life out of Australia with no stress and money worries