ELIGIBILITY for Centrelink benefits differs. For the age pension, income, assets and age tests apply. For disability pensions, the age test works differently but the other tests apply in the same way.

Q My husband is retiring, due to poor health. He is nearly 60. I have just turned 55 and I do not work any more.

We have about $300,000 in super, about $5000 in savings and we own our home, which is valued at $420,000.

He will be applying for a disability pension.

Would he get a full disability pension or would our super be counted?

A To be eligible for a disability support pension, a person must be over 16, under age-pension age, and have an illness, disability or injury that results in them not being able to work for 15 hours or more a week. Individuals are also eligible for a disability support pension if they cannot be reskilled to be able to work for at least the next two years, are working under the Supported Wage System, or are permanently blind.

The amount of disability pension a person or couple receives is governed by the income and assets tests.

If a person is eligible for the disability support pension due to blindness, these tests do not apply in full.

If an individual is unable to work due to providing constant care to a person who is disabled, they will be eligible for a carer pension. In this situation the assets and the income tests apply as they would for the disability pension.

Under the income test, the only asset of yours counted will be the savings of $5000. The amount of income you would be deemed to be earning from these savings would not affect your eligibility for both pensions.

As both of you are under age-pension age, the value of your superannuation is not counted in either the income or the assets test. This leaves the value of your savings as the only asset counted for the assets test, which again means you should be eligible for the full pensions.

Once your husband reaches 65, the value of his superannuation will be counted in both the assets and the income tests. This could mean he will not then be entitled to the full age pension.

Q We will be eligible for the age pension next year. Do we split the amount in our self-managed superannuation fund (SMSF) and apply the male and the female life expectancy to each, or do we apply the youngest person's calculation? Also, I have noticed Centrelink is now using the 2007 life expectancy tables. Does that life expectancy continue for the life of our super pension or does it change when it brings out new life tables in the future?

A Under Centrelink rules, the total value of your combined superannuation is counted under the assets test. For the income test it is the value of each member's account that is counted. If a pension is not being taken from the super fund, deeming rates are applied to each member's balance.

Where pensions are paid, the amount of income counted in the income test is the net value of the pension received after deducting the purchase price of the pension.

The purchase price is calculated at the time the pension begins using the life tables that apply at that date. This does not change if new tables are issued. Where the super pension paid is a reversionary pension, the age of the youngest person is used to calculate the purchase price.

Questions can be emailed to max@taxbiz.com.au

Self-Managed Superannuation Funds: A Survival Guide by Max Newnham is available in bookstores.