Page 12 - Wealth-Adviser-Issue-137 (FWP)

ISSUE 137
MAY 2026

from super versus working more. For a part-pensioner who because the CSHC income threshold is much higher than
is still earning meaningful employment income, the margin- the Age Pension threshold but the CSHC itself is a yes/no
al value of an extra fortnight of work is partly determined eligibility test rather than a tapered amount.
by the work bonus accrual and the income-test taper. Where
the work bonus credit is already accruing and the income Worth Thinking About
test is the binding constraint, drawing additional super A few questions to raise at your next adviser review.
pension rather than working an extra shift can sometimes • If you’re working past 67 and not yet claiming the Age
preserve more household income. The mechanism here is Pension, have you modelled what changes when you
that, for people of Age Pension age, super pension with- claim — including the work bonus accrual, the supple-
drawals from a taxed source aren’t assessed under the in- ment components, and the Pensioner Concession Card?
come test, while employment income is (subject to the work • Is the percentage of your business income recorded by
bonus). Where the assets test is the binding constraint, the Centrelink as personal exertion correctly set, if you’re
trade-off runs the other way. The deeming rate change that self-employed?
took effect on 20 March 2026 — the lower rate now 1.25 per • Have you reviewed whether SAPTO is being correctly
cent and the upper rate 3.25 per cent, after several years of applied to your tax return, and (if you receive a super
being frozen at lower levels — has tightened the income-test pension) whether it is from a taxed or untaxed source?
position for part-pensioners with sizeable financial assets, • If you have available carry-forward concessional contri-
which is worth modelling rather than assuming. bution cap, would a contribution this year be valuable
The third question is whether to make voluntary super given your marginal tax rate and your liquidity position?
contributions while still working past 65. The case for is • Where the assets test is binding on your part Age Pen-
strongest where the worker has carry-forward concessional sion, have you considered how the March 2026 deeming
cap available, is in a marginal income tax band well above rate rise affects your fortnightly payment?
15 per cent, and has time before contributions become • For self-funded retirees over Age Pension age, have you
inaccessible (for most people in this age group, super is checked whether you qualify for the Commonwealth
already unrestricted and accessible, so this is more about Seniors Health Card given your current income?
tax-effective accumulation than locked-up money). The
case against is where the contribution would breach a cap,
push the worker through the Division 293 income threshold References
($250,000), or come at the cost of household liquidity that’s • Services Australia, Work Bonus, 2026.
needed for other purposes. • Services Australia, Deeming, page last updated 20 March 2026.
The fourth question is the Commonwealth Seniors • Australian Taxation Office, Seniors and pensioners tax offset (SAPTO),
Health Card. For someone who is over Age Pension age but 2024–25 thresholds.
not eligible for the Age Pension because of the means tests • Australian Taxation Office, Restrictions on voluntary contributions
— typically self-funded retirees with substantial assets or (work test current position).
higher income — the CSHC is the consolation prize, pro- • Australian Taxation Office, Super guarantee — rate, payday super and
viding access to concessional PBS prescriptions and some contribution base.
state-based concessions without the asset-test friction of the • Department of Social Services Ministers’ release, Changes to social
Age Pension itself. The income test for the CSHC includes security payments from 20 March 2026.
deemed income from financial assets including super in • Treasury Laws Amendment (Enhancing Superannuation Outcomes for
pension phase. Where employment income and the CSHC Australians and Helping Australian Businesses Invest) Act 2022 — work
are both in play, the modelling is worth doing carefully, test changes.

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