From 1st January 2017 the Age Pension assets test will change. Around 170,000 people will be better off but twice as many will lose out, according to the Government’s own forecasts. Where do you stand? What happens next? And what do you need to do?
The rate at which the asset test reduces age pensions doubles from $1.50 to $3.00 per fortnight for every $1,000 your assets (other than your family home) exceed the threshold.
The asset test threshold increases too – see the table below – but you may not benefit from this, because at lower asset levels, it is often the income test that determines the amount of partial pension you receive.
So will your age pension be affected?
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If you currently receive the full pension, you will not be affected by these changes, so sit back and relax. |
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If you currently receive a part pension with assets at the lower end of the range you may be one of the lucky 50,000 who move to the full pension or the 120,000 who see an increase of around $30 per fortnight. You don’t need to do anything to receive the increase, though. Centrelink will send you a letter confirming it and automatically start paying it in January. |
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If you currently receive a part pension with assets toward or above the middle of the range, you may be one of the 235,000 who’s payments are reduced. Centrelink will send you a letter confirming your new pension level. Once you have this letter you will be able to revise your budget or think about possible ways to replace the lost income. |
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If you currently receive a part pension with assets above the new, lower cut-offs, you will be one one the 90,000 who loose your pension entirely. This also means your Pensioner Concession Card will be cancelled but you’ll receive a Commonwealth Seniors Health Card or Low Income Health Care Card to replace it, providing access to Medicare bulk billing and less expensive pharmaceuticals. Centrelink will send you a letter confirming your situation but you don’t need to wait for it to revise your budget or think about ways to replace the lost income. |
The new asset test levels from January 2017 are as follows:
| Current Lower Threshold | New Lower Threshold | Current Cut-off Limit |
New Cut-off Limit |
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| Single | ||||
| Homeowner | $202,000 | $250,000 | $775,500 | $547,000 |
| Non-homeowner | $348,500 | $450,000 | $922,000 | $747,000 |
| Couple Combined | ||||
| Homeowner | $285,500 | $375,000 | $1,151,500 | $823,000 |
| Non-homeowner | $433,000 | $575,000 | $1,298,000 | $1,023,000 |
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