One or Two Super Funds – Deductable Amounts


When a ‘super’ account is in ‘pension phase’ – that is, the person is withdrawing a pension from the balance – Centrelink allows a proportion of that pension to be exempt from the income test.

The amount is calculated based on the balance of the account at the time the ‘pension’ commenced and life expectancy.

So let’s say a female, at 59, started a pension from a super balance of $400,000. Then Centrelink uses the ‘life expectancy’ Relevant Number (RN) of 26.32 to divide into that balance to arrive at an annual deductable amount of $15,198. In other words drawing down on this amount per year will last her expected life. 

So if she draws down annual amounts of less than this $15,198 - $585 per fortnight – then this will not be counted in her income test. If she draws more, then the ‘excess’ will be used to determine the pension.

Now let’s say that when she gets to pension age she has the opportunity to deposit more into her pension – say $80,000. She needs to decide if she is better putting this $80k into her current super or starting a new super. The current balance of her existing super is $240,000 – she has been withdrawing $20k for 8 years.

To look at the Centrelink Age Pension impact


Option 1 – One ‘Super’ Account

The calculations are: 

Current super = $240k 

Plus new contribution ($80k)  = $320k. 

New life expectancy number (RN) = 22.48

Deductable amount = $14,235


Option 2 – 2 ‘Super’ Accounts

The calculations are: 

Original super = $400k 

Deductable amount = $15,198 ($400,000 / 26.32) 


New Super  = $80k

New super life expectancy no. = 22.48

New super deductable amount = $3,559 ($80,000 / 22.48)


New combined deductable amount = $18,756.


In this scenario she would have an additional $4,500 ($18,756 - $14,235) as deductable amounts taken into consideration for the age pension.


To link to a Centrelink resource page - Excempt Income Streams - click here.


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