How to save on your pension and unemployment benefits
- September 20, 2021
The Pension Guarantee Scheme is a pension payment scheme designed to give a pension to people who are not eligible for the Guaranteed Income Supplement.
The scheme allows people to receive a lump sum of money for their eligible pension contributions in the future.
The payments are made by the Government and are guaranteed to be paid to people on the same basis as other payments in the scheme.
Under the scheme, people must provide a lump amount of money in the form of a lump-sum payment or the equivalent of a deposit, and if the amount of the payment is greater than their eligible contributions, they must pay it back.
If the payments are less than their entitlement to the scheme they are required to repay the difference.
The pension is paid out to people regardless of their income.
There is also a maximum payment that people can make for their entitlement.
If people are not able to pay their entitlements the Government provides a refund.
Pension paymentsThe Pension Guaranteed Payment Scheme (PGPS) is made up of two main payment methods.
The lump sum payment and the deposit.
The payment for eligible pension contributionThe lump-payments are made out by the government to people and the payment amount is dependent on their age.
The Government says that people should be able to make lump-based payments for the whole of their eligible retirement years.
The Payments Act 2006 guarantees that people aged 55 and over who are able to work at the same rate of pay for the same number of years will receive a payment of up to $5,000 for the first 12 years and $10,000 a year thereafter.
People aged 50 and over can also make lump payments, but this payment is subject to the same rules as for people aged over 55.
Pensions and unemploymentIn addition to the pension payment, people who receive unemployment benefit are also entitled to the Guarantee Income Supplement (GIS).GIS is a supplement to the basic state pension, and is funded through payroll tax payments.
The GIS is paid by employers to employees who are receiving unemployment benefits.
People are paid the amount in the GIS that is the difference between the amount they are currently entitled to and their entitlement to the general state pension.
In this case, if a person is receiving unemployment benefit for the last 12 months, they will receive the difference, minus the amount that they are entitled to, plus the amount the Government has paid to them.
This is referred to as the unemployment benefit payment.
People eligible for unemployment benefit can receive up to a maximum amount of $18,500.
However, unemployment benefit payments are capped at $3,000.
If someone is unemployed for more than 12 months they will have to repay any unemployment benefit that was paid to their employer.
Pursuant to the GOS, the Government will only be liable for any part of the unemployment benefits that have been paid.
This means that a person who is eligible for state pension but not eligible to receive unemployment benefits will have their entitlement capped at the full amount that the GFS is being paid.
For example, if someone receives unemployment benefits for the 12 months that he was unemployed for, he will have his entitlement capped to $6,400.
However if the Government pays unemployment benefits, the entitlement will be capped at that amount.
If you have any questions about your entitlements, you can contact the Pension Guarantees Service at 1300 737 545 or visit their website here.
