02 Aug Centrelink Age Pension: Recent Updates
In recent years, there have been a number of changes to the social security pension rules that has created opportunities for advisers providing retirement income advice.
With the recent changes in Age Pension assets test just, it’s important to understand how the changes could impact you, particularly with part-pension thresholds somewhat tighter than initially projected.
These thresholds are the value of assets you can own (excluding your home) before you lose eligibility for the Age Pension.
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Who the changes will affect
The Age Pension assets test changes will affect Age Pension recipients, aged 65 and over. To be eligible for a full or part Age Pension, retirees must satisfy an income test and an assets test, as well as other requirements.
According to reports, changes to the assets test, effective 1 January 2017, will see more than 50,000 additional Australians receive the full Age Pension. Meanwhile, roughly 300,000 retirees on the part pension will have their entitlements reduced, with about 100,000 losing all entitlements.
The Age Pension assets test thresholds will change
The cut-off thresholds previously announced were only projections, as Age Pension rates were not updated until 20 September 2016.
Following the recent update to Age Pension rates, the part-pension cut-off thresholds are a bit tighter than previously announced, meaning more people could be affected. The lower thresholds for eligibility for a full pension remain unchanged.
Click on the Asset Test Estimator to find out how your pension will be affected
If your assets are below the thresholds in table one, you will be eligible for a full pension under the 2017 assets test.
Table two outlines the assets test cut-off point for those on a part pension. If you have assets above these limits, a part-pension is no longer be payable.
What are the changes from January 2017? Our Financial Adviser is there to help you out
The Age Pension assets test taper rate has increased
This means that pension payments has reduced by $3.00 per fortnight for every $1,000 of assets above the lower assets test threshold. Previously, the taper rate was $1.50 (75c each for couples) per fortnight, which means from 1 January 2017 pensions are reduced at a faster rate.
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What assets are taken into account?
The market value of most of your assets is taken into account when calculating your Age Pension. This includes:
- Property (excluding your home)
- Motor vehicles, boats and caravans
- Financial investments
- Superannuation if you’re over Age Pension age
- Business assets
- Household contents and personal effects.
Find out more about which assets are assessable on the Income and Asset Test Thresholds
Asset Test Thresholds
Asset Test Cut-off Thresholds
Speak to an Expert Financial Advisor
Theo Karoumbalis is director & senior financial advisor at iadvice Melbourne (a privately owned wealth management firm in Melbourne, Victoria). He helps successful individuals manage their wealth effectively. Theo’s graduated in Commercial Law, Commerce, Accounting and Financial Planning, is a best Advisor and have significant direct markets experience.
B.Law, (LLB), B.Comm, (Accounting & Finance)