As you may be aware, the federal government in the last budget signalled significant changes to how your entitlement to the aged pension is calculated under the “assets test”. These changes are due to come into effect from 1 January 2017.
The Age Pension assets test is a means-based test which helps Centrelink determine your eligibility for the age pension and other social security payments. If you have assets over the lower threshold, your entitlement to the Age Pension is reduced. Under the current rules, the asset test reduces your rate of Age Pension by $1.50 per fortnight for every $1,000 of assessable assets over the lower threshold.
Under the new rules that will apply from 1 January 2017:
- The lower threshold is increasing
- The rate at which your Age Pension reduces if your assets exceed the lower threshold is doubling from $1.50 per fortnight to $3.00 per fortnight for every $1,000 of assessable assets over the threshold. This has the effect of reducing the cut-off limit where an Age Pension is no longer payable.
What are the new asset test thresholds?
The table below provides a summary of the current and new Age Pension asset test thresholds. Please note that the lower thresholds have increased and the cut-off thresholds where you are not entitled to an Age Pension have lowered.
|Current lower threshold||New lower threshold (estimated)||Current cut off limit||New cut-off limit (estimated)|