How Centrelink sees singles and couples for pensions in Australia
The Australian social security system ensures that citizens have the financial resources for at least a frugal, minimal standard of living when they can’t earn an income from work.
And the minimum income required for a very modest lifestyle is different if you live alone rather than share a home. It’s expected that a couple living together would share their resources and not need as much as two singles.
With the Age Pension, payment rates and means testing arrangements are different for ‘members of a couple’ and ‘single’ people. ‘Homeowners’ and ‘non-homeowners’ also have different means-tested allowances.
How Centrelink defines a couple
Any two adults who share domestic arrangements and present socially as a ‘couple’ could be treated as a what is called a ‘couple at Centrelink’.
For instance, Joe and Mary—who moved into their current home as soon as they were married in the 1960s—are a couple at Centrelink. They jointly own their home and operate a joint bank account and are happy to be recognised as a couple.
Less happy about being treated as a couple by Centrelink are Kim and Lesley. Kim lived alone in a large apartment while her friend Lesley struggled to afford the rent for a tiny flat. So, Kim invited Lesley to stay short term. They share household bills and are often seen together at cultural events and generally around artists’ social hubs.
Two people in a marriage-like arrangement or de facto relationship can be treated as a couple at Centrelink from the date they start sharing accommodation. Their couple-at-Centrelink status ends immediately Centrelink is notified that one has moved out permanently.
The point is that you don’t need a documented marriage or civil partnership to be treated as a couple at Centrelink.
Centrelink expects its clients to report their personal circumstances honestly. But, as a guardian of taxpayer funds, Centrelink is alert to the potential for incorrect records resulting in benefit overpayments.
Big government data matching systems are often helped by ‘friends’ or neighbours who report on couples breaking the rules. You’ll probably be contacted by Centrelink if you’re flagged as having a change in living arrangements that you hadn’t reported.
Couples separated by illness
If one or both members of a couple at Centrelink need residential aged care, Centrelink could treat them as a ‘couple separated by illness’.
This is what happened when Sam became too frail to be cared for at home and moved into residential aged care. Sue stayed in the family home she and Sam jointly owned, which made them a couple separated by illness. They still consider themselves a couple but they are each paid at the single rate and Sue manages their combined finances.
Bill and Betty are also on the same level as a couple separated by illness while Bill does time in prison.
Singles on Centrelink payments
A single person who lives alone in a self-contained residence would be considered a ‘single at Centrelink’. But if she’s still in a financial relationship with her former domestic partner she might still be considered a ‘member of a couple at Centrelink’.
Two sisters who share a home could each be single at Centrelink. While they might share domestic arrangements they would not present socially as a couple. Similarly, a widow and her intellectually challenged son might share a home and each be treated as a single person at Centrelink.
A couple separated under one roof
Centrelink is aware that not every couple can split their assets and go their own ways immediately after their personal relationship ends. Maintaining a combined household in a jointly-owned property might enable both parties to avoid being homeless and minimise disruption to their family situation.
Centrelink has a detailed form for customers to demonstrate how they are ‘separated under one roof’. Once Centrelink accepts a genuine separated-under-one-roof situation then each party could be treated as a single at Centrelink.
There is a whole range of options that Centrelink has to consider. If you become eligible for Centrelink payments, the best thing to do is to talk to Centrelink about your situation and keep them up to date with any changes.
Christine Hopper is the Director of Financial Care Services, an independent financial advisor.
Financial Care Services is focused on mature people considering a change of lifestyle including retirement and particularly new living arrangements in: retirement lifestyle community villages; granny flats; supported or assisted living; and Commonwealth regulated aged care. She can be contacted through https://financialcareservices.com.au.
Christine talks to Centrelink as a customer receiving a Carers Allowance and on behalf of clients. She understands the range of Department of Veteran Affairs and Centrelink income support benefits, their relevant means tests and eligibility conditions. She’s an actuary who also holds a Bachelor of Science, a Diploma of Financial Planning and a Certificate of Theology.