Nick Bruining: An over 55s guide to accessing JobSeeker and superannuation before you get the age pension

With Australia’s unemployment rate edging up slightly in June, many older people not yet eligible for an age pension will be weighing up their options. That can include using up their savings or tapping into their superannuation to carry them over until the age pension eligibility age of 67. Ceasing employment after turning 60 and not intending to return to work at the time you access your super is a valid “condition of release” and allows full access to all of your nest egg. One other option is the poorly understood JobSeeker allowance payment from Centrelink. JobSeeker is a means-tested allowance benefit. Allowances are different to pension payments because they are regarded as a temporary support payment to carry you over until you return to paid employment. While the normal JobSeeker payment for a single is $789.90 a fortnight, a single over 55 receives a higher rate of $850.60 if they have been on a JobSeeker payment for nine consecutive months. Eligible couples receive $725.70 each, and as with other income support payments couples are assessed as a single entity under the means test system. JobSeeker payments form part of your taxable income for the year. For those under 60, receiving JobSeeker can also open the door to accessing some of your super before retirement. If you’ve been in receipt of a Centrelink income support payment for at least 26 weeks, you can apply to have up to $10,000 released from your super every 12 months. Be aware that this withdrawal is taxable. JobSeekers are subject to an asset and income test — but with big differences compared to the age and disability support pension rules. While the asset means test lower limits are identical to the pension figures, once you exceed the limit no benefit is payable. It does not taper down in the same way as a pension. For a single homeowner, the asset test limit is $321,500, excluding the value of the home. For a couple, it’s $481,500. Note that Centrelink will accept the second-hand or scrap value for fixed assets, so don’t calculate this number based on insured values. Importantly, all money held in superannuation accumulation phase is exempt from means testing until you hit 67. Non-homeowners are allowed an additional $252,000 in assets, whether as a single or a couple. The income test is complex and is calculated in the same way as the age pension. It is not the same as the Australian Taxation Office’s method. In essence, if your Centrelink-assessable income exceeds $150 a fortnight, your allowance will start to reduce. The cut-off limits vary considerably based on your family situation, but for many older kid-free Australians, it is around the $1500-a-fortnight mark — and higher once you’ve been on benefits for more than nine months. Importantly, the “mutual obligation” requirements for over 55s is quite different to younger recipients of JobSeeker. Mutual obligations require you to demonstrate some activity that makes you job ready. While ideally you’ll continue to seek paid employment, you can meet your obligations through other activities such as formal study or approved voluntary work. In both cases, this needs to take up at least 30 hours a fortnight of your time if you are over 60. Between 55 and 60, you must continue to seek work with a maximum of 15 hours doing voluntary work in the first 12 months of unemployment. After 12 months, the same rules for over 60s apply. One important point to note: if you are over 60 and claiming JobSeeker at the same time and not simply doing voluntary work or study, you probably cannot access your super. The rules are, you can access your super once you cease any employment after turning 60. If you don’t have a job to cease then, by definition you haven’t satisfied this condition of release. Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association