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Understand the terminology



Understand the terminology

What is in a name? NARELLE COOPER navigates a way through the Centrelink maze.

This month I am staying away from ‘figures’, and before I write anything else, I need to clarify a couple of points from my May editorial.

My ‘explanations’ earnt me a slap on the wrist.  Don’t get me wrong my figures were correct, just not enough IFs and BUTs, which is a problem when trying to explain Centrelink matters in limited space.  It is not my intention to be ambiguous, these articles are about covering some of the intricacies of Centrelink’s assessments in an attempt to inform.  I always encourage readers to seek further advice as everyone’s situation is different, and one size does not fit all.

Subsequent to previous advice, Centrelink have told me firmly that there will NOT be a dedicated line for those looking for assistance relating to the ‘work bonus’.

That said and not to be discouraged, I want to move on and explore the new Centrelink Lifetime Annuity rules.  Over the years, there have been a number of changes to the calculations used to assess Income Stream Products. Whilst we are not talking along the lines of Einstein’s theory of relativity, E=mc2, some of the maths can be confusing.  I would like to explain it as E=maths+Centrelink is too complicated.  But first the terminology needs to be understood.

In relation to the July 2019 changes to Lifetime Annuities, my aim is to demystify the wording, to assist when viewing the Centrelink website.

Firstly though, life insurance and superannuation companies change the name of their products and add different features all in an attempt to attract customers. This does not help when navigating the ‘wordology’ of these products (yes that one from a dyslexic).

Annuities form part of ‘Income Stream Products’ where Centrelink describe them as:

Account based or market linked: Products that allow you access to your capital, the account balance generally changes depending on market movements.  Whilst they can have guaranteed terms and rates, along with other nuances, mostly we know them as Allocated Pensions or Allocated Annuities.

Defined benefit pensions: Generally referring to pensions from public sector superannuation schemes and some larger private sector employee schemes.

Non-defined benefit pensions:  This category covers current Lifetime and Term Annuities.

Now that that is cleared up… In relation to the new assessment of Lifetime Annuities, Centrelink seem to be using the words “Lifetime Income Streams (LIS)” or “Pooled Lifetime Retirement Income Streams Products”. This gives us a new category, but don’t forget if you currently have a Lifetime Annuity you come under the old rules!

OK if you feel the need to take a break and lie down in a very dark room, totally understandable, that is where I am headed!

Let me just say the new rules around Lifetime Annuities may be worth a closer look, particularly if you are a part pensioner under the asset test.  But, before you take action, you need to understand the nature of Lifetime Annuities and how they could fit into your overall financial plan.

The above information is presented as ‘general information’ and should not be relied upon in isolation.  The complexity of Centrelink’s assessment processes means that your individual circumstances affect the results and differ from person to person.  Always refer to Centrelink or a Centrelink expert for advice relating to your personal situation.

Narelle Cooper is director of the Centre for Age Pension Admin Services. Call 1300 043 197, visit

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