Nick Bruining: Centrelink experts reveal how to work the system and get your pension faster

Significant processing delays continue at Centrelink, affecting thousands of new pension applications.

Delays are also affecting those existing customers who need to update their records.

In an effort to improve outcomes for readers, we have tapped into the expertise of financial advisers who know the system backwards. This will hopefully make applying easier and provide useful shortcuts to get your queries answered.

Our experts include former Centrelink staff members and others who have spent decades learning how to work the system.

We’ll work through the order you might follow in lodging a claim and then day-to-day interactions with Centrelink.

Before claiming

Annette Sinclair was a former Centrelink financial information service officer and has dealt with thousands of pension applications and updates. She said getting your house in order before actually claiming is a big part of speeding up the process.

“For anyone about to claim, make sure you have established a myGov account through my.gov.au and have linked the Australian Taxation Office and Centrelink services to your account,” Ms Sinclair said.

The alternative is to get the paperwork and line up at Centrelink. In most cases, you will be encouraged to lodge online anyway.

Next, set up a myGovID profile using the myGovID app available for smartphones. If you are not into smartphone applications, you may have to visit a Centrelink office with a passport, driver’s licence and other identification to prove who you are.

“If you weren’t born in Australia, you need separate verification that you are an Aussie permanent resident. Usually, the visa or a citizenship certificate will suffice,” Mrs Sinclair said.

You will need to make sure you have all the required documentation ready to go because you need to include copies of documents in your claim. Ideally, you should have a scanner to take images of the documents ready for upload.

These will include copies of all your financial statements and other documents.

A complicated business

It gets even more complicated for anyone who was in a business or operated through a structure like a family trust. Claims are referred to a special “complex assessment” unit, including for most business structures, and are taking months to finalise. It’s not helped when Centrelink uses last year’s accounts to work out your entitlements.

“You might take the cash out to live, but the accountant often tweaks the books after the financial year has ended,” Mrs Sinclair said.

“For this reason, Centrelink generally applies the previous financial year’s income and assets for means-testing purposes.”

This arrangement applies to business structures such as a Pty Ltd company or a trust structure like a Discretionary Family Trust.

“If you are self-employed and retirement will be complete, do what you can to effectively close the business down before claiming,“ Mrs Sinclair said.

While you don’t have to finalise all of the closing-down paperwork, you will need independent verification that you are no longer trading or receiving revenue.

If trading through a trust, you will need to have an independent person state how the trust assets and income are to be distributed to the beneficiaries. That independent person could be someone like your accountant.

Valuations of fixed assets is always a challenge, but given that most second-hand dealers will give you almost nothing, contents and personal effects for a single of about $5000 is usually accepted and $10,000 for couples. Do not use the insured values.

For your cars and other vehicles, use the current private sale values, not what you paid with all the optional accessories added. You can get these by using the “value my car” tools on sites like carsales.com.au to get a specific valuation for your model and year.

Lodging the claim

Assuming you are doing this online, the lodging process is interactive and quite easy to follow.

But it will take some time as you read and click.

Mrs Sinclair suggests setting aside at least 60 minutes if you have all the material ready to go.

With an online claim, you can’t submit until all the supporting documents have been uploaded.

If you are lodging a paper claim, some of this can be provided later and, in many cases, even though Centrelink implies that it is needed then and there, you can lodge or submit the claim and provide the requested information later.

If anything is missing, Centrelink will make contact either by phone or by letter. Keep an eye on your myGov inbox.

Depending on your answers, the system may flag additional forms or “Modules” to complete.

When all of the information is complete, click submit and join the waiting list.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association