1. Changes to the Age Pension asset test

Changes to the Age Pension asset test

Changes to take effect from 1 January 2017

The Federal Government is making changes to the Age Pension asset test.

The key changes from 1 January 2017 are:

  • Increases to the asset test ‘free area’  – this refers to the amount of assets you can have before your Age Pension is affected.

  • Increase in the taper amount from $1.50 to $3.00. This means for every $1,000 of assets you have over the asset ‘free area’, your Pension will reduce by $3 per fortnight.

What do the changes mean for you?

From 1 January 2017, some people will get more Age Pension, while others will get less or no Age Pension.

If you lose your Age Pension as a result of these changes, you will automatically receive a Low Income Health Care Card and (if you’re over Age Pension age) a Commonwealth Seniors Health Card.

What is the asset test?

The asset test determines your eligibility for the Age Pension and other payments by taking into account the market value of your assets, excluding your home. This includes things such as:

  • Other real property

  • Motor vehicles, boats and caravans

  • Financial investments

  • Super (if owned by you or your partner, if one or both of you are over Age Pension age) 

  • Business assets (such as assets held in a company or trust you control, your portion of a business held under a partnership or as a sole trader).

  • Household contents and personal effects.

The asset test that applies to you will depend on your situation, ie whether you are single or in a couple, and whether you own your home.

What are the new asset test limits?

Full Age Pension

To receive the full Age Pension you need to have assets under the lower asset test limits.

The table below shows the current limits you need to be under to receive the full Age Pension and the new ones that will apply from 1 January 2017.

 

Source: Department of Human Services, humanservices.gov.au/customer/enablers/changes-pension-assets-test 

If your assets are over the new limits, your Age Pension will be reduced by $3.00 per fortnight for every $1,000 of assets you have over the limit.

To receive a part Age Pension, your assets must be under the upper limit. Under the new asset test, this limit has reduced. This means if you have assets above the new limits, you will no longer be eligible for a part Age Pension.

The table below shows the current upper limits and the new ones that will apply from 1 January 2017.

 

Source: Department of Human Services, humanservices.gov.au/customer/enablers/changes-pension-assets-test

What you can do next

Get in touch with Centrelink to find out more about your Age Pension eligibility or make an appointment to speak to a Financial Information Officer at humanservices.gov.au/Centrelink.

If you need more information, call us on 1300 362 415, 8am – 7pm (AEST) Monday – Friday and we’ll arrange for you to speak to a financial planner.