At a glance…
- About 2.7 million Australians rely on the Age Pension to make ends meet. But is Centrelink paying you correctly?
- Money Expert, Effie Zahos breaks down how to find out if you – or a loved one – has been shortchanged.
As many of us will know, navigating the Age Pension system can be an uphill battle. But taking a “set and forget” approach to your pension could leave you seriously shortchanged – or slugged with a Centrelink debt.
A scathing government audit report earlier this year found that over three years from mid-2021 to mid-2024, Centrelink made pension mistakes totalling a massive $5 billion.
The $5 billion total was projected from a targeted sample of approximately 10,700 payment recipients. It turns out, around $3.6 billion was overpaid. Another $1.3 billion was short-changed from retirees’ pockets.
Any senior will tell you that retirement is a time to make every dollar work. This includes being confident you are receiving the correct Age Pension payments. On the flipside, the last thing any senior needs is to be slapped with a debt because they’ve been overpaid.
What causes errors in pension payments?
Part of the problem is that Centrelink doesn’t track all of your money in real-time.
The value of assets such as superannuation and shares is checked and updated twice a year – super in February and August, and shares in March and September. The value of investment properties is automatically updated by Centrelink annually.
This can all sound very simple. And in our busy lives it can be tempting to leave the valuations to Centrelink. However, that’s an approach that can cost you dearly. If the value of your assets changes between Centrelink checks, or if the system gets things wrong, you could easily end up being underpaid or overpaid.
It puts the onus firmly on retirees to ensure the value of assessable assets listed with Centrelink is as current as possible.
How you could be short-changed
Let’s say you withdrew $30,000 from your super in April to pay for a once-in-a-lifetime cruise. Centrelink won’t pick up the fall in the value of your super until August. As the system thinks you still have the money, your pension payments are likely to be lower than they should be for several months.
The same applies if you own shares that fall in value dramatically between Centrelink’s valuation dates. Investment values aren’t the only thing that can impact your Age Pension payments.
One common mistake is for older Australians to overvalue their personal belongings. Things like your car, boat, caravan and home contents will almost certainly depreciate over time. By manually updating your details to reflect a fall in the value of these assets, you can enjoy a significant uptake in pension payments.
How a $70,000 fall in asset values can see a $210 rise in pension payments
The golden rule to bear in mind is that under the assets test, every $1000 worth of assets is worth $3 per fortnight in pension payments. So, keeping Centrelink updated can really pay off.
Here’s an example from the Retirement Essentials website of how retirees can benefit from keeping Centrelink up to speed with changes to their asset values.
Let’s say Margaret, 68, a single homeowner, pulls $50,000 out of her super in April to pay for urgent roof repairs.
In addition, Margaret updates the values of several assets. She tells Centrelink that her car, previously listed at its purchase price of $35,000, has depreciated down to its current market value of $25,000. That’s a $10,000 drop in the vehicle’s value for the assets test.
Margaret applies the same process to her home contents. She updates the value of her contents from the $20,000 ‘insured’ value to the items’ ‘garage sale’ value of $10,000. That’s another $10,000 cut to her asset values.
As the table above shows, by taking the time to update her details, Margaret is able to lower her assessable assets by $70,000. This can boost her pension payments by $210 per fortnight, or about $5460 each year.
The key takeouts
The upshot is that when it comes to the Age Pension – and other payments based on Centrelink’s assets test – it doesn’t pay to take a ‘once-and-done’ approach.
Whenever you spend a substantial lump sum from your bank account or super, it’s important to update Centrelink within 14 days. If you miss this window, Centrelink back-dates your pension increase to the date you spent the money, meaning every fortnight you delay is cash permanently lost.
Remember, ‘market value’ is not the same as ‘insured value’. Whether it’s your car, couch or caravan, Centrelink assesses the value on what you could sell it for today. And that’s usually a lot less than what you paid for the item.
Help from friends and family can go a long way
Updating your asset values can be done simply by visiting the Centrelink portal via your MyGov account. For many older Australians, though, this isn’t easy.
It requires you to be tech-savvy and own a smartphone or computer. And while public libraries and community hubs provide free internet access, the hurdles can still be high.
The option of calling Centrelink isn’t always workable either. The audit report I mentioned earlier found older Australians can regularly face wait times of more than an hour just for a call to be answered.
Centrelink says that since the audit it has “improved our overall capability and enhanced online services”.
The government agency says it has upgraded its systems and improved online services since that audit.
This is where friends and family can play a valuable role. Spending a few minutes helping older Australians keep their asset values current with Centrelink can make a retiree’s life a lot easier. It can also go a long way to ensuring they are receiving their full Age Pension entitlements, and/or avoiding an unwanted Centrelink debt.
This article originally appeared in the August 2026 issue of The Australian Women’s Weekly. Subscribe so you never miss an issue.
Information is correct at the time of writing. Any advice provided is general in nature and does not take your personal circumstances into consideration. Readers should seek their own financial advice.
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