If the Government is able to negotiate support from Labor or the Greens to get it’s proposed changes through Parliament, then from January 2017 the Age Pension assets test will change.
For an overview of the pension as it currently stands, see The Age Pension in Australia – an overview as it stands this year.
The Government plans to double the rate at which the asset test reduces age pensions, from $1.50 to $3.00 per fortnight ($39 to $78 per year) for every $1,000 your assets exceed the threshold.
They plan to increase the asset test threshold too, 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. The Government forecasts are:
- 170,000 will receive a pension increase
- 235,000 will have their pension reduced
- 91,000 will lose entitlement to the pension
In other words two thirds of pensioners will be worse off, under the proposed asset test changes.
The new asset tests from January 2017 are as follows:
| Current Lower Threshold | Proposed Lower Threshold | Current Cut-off Limit |
Proposed Cut-off Limit |
|
| 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 | $575,00 | $1,298,000 | $1,023,000 |
What are your thoughts?
Will the proposed changes hurt or help you? Do you think the new assets tests are a good idea? Is there anything else you’d like to know about the Age Pension?
Join the conversation — leave a comment below and let us know what you’re thoughts are.
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