Great news – age pension asset test limits to increase

For those clients that are currently not eligible for the age pension please read on. You may be entitled from July 1. There has been an increase in the asset test limit for a full age pension as well as the cut out limit – meaning people on an age pension already will receive more per fortnight, and those who currently are self funded, may become eligible. 

If you need a refresher on what are the assessable assets for age pension please click here. Just remember that Centrelink assesses you under both an asset and an income test. The test that determines the lowest amount of payment you will receive is that one that is applied. 

If I already qualify for the full Age Pension does this payment change?

No. The full age pension stays at $802 for Couples and $1,064 for Singles. This doesn’t change in July. It is adjusted in March and September each year.

What are the changes for Couples?

For couples who own their homes the asset base for which a full age pension is paid increases $32,500 to $451,500, and for those that do not own their house the asset base moves up $50,000 to $693,000.

As an example a couple who owns their home and has assessable assets of $480,000 will see their fortnightly age pension kick up $48.75 per fortnight, from $710.50 per fortnight to $759.25 per fortnight.

The upper asset limits for homeowner couples, the point at which the age pension cuts out, moves $32,500 for homeowners and $50,000 for non homeowners.

This means that people who have previously exceeded the asset test limit may now be eligible.

Table 1: Couples assets test 

	Home owner		Non-homeowner
	July 1	Current	July 1	Current
Lower limit	$451,500	$419,000	$693,500	$643,500
Cut out limit	$986,500	$954,000	$1,228,500	$1,178,500

Table 2: Couples comparison of benefits pre and post July 1

Homeowner status	Assessable assets	Current age pension entitlement per person	July 1  age pension entitlement per person	Fortnightly increase
Homeowner	$500,000	$680.50	$729.25	$48.00
Non-homeowner	$724,500	$680.50	$755.50	$75.00

What are the changes for Singles?

People who are single will see their assessable asset base increase $31,750 to $301,750 if they own their home, and a $39,250 increase to $543,750 for those who don’t own their homes.

An example for someone single who has assessable assets of $380,000 their fortnightly age pension, assuming they are a homeowner, will increase from $764 to $829.25 per fortnight, an extra $65.25 per fortnight in their pocket. 

The asset test cut out limits have increased for singles as well, $21,750 for homeowners and $39,250 for non-homeowners.

There may be the opportunity for singles who did not previously qualify due to exceeding the cut out limits may now be eligible.

Table 3: Singles assets test

	Home owner		Non-homeowner
	July 1	Current	July 1	Current
Lower limit	$301,750	$280,000	$543,750	$504,500
Cut out limit	$656,500	$634,750	$898,500	$859,250

Table 4: Singles comparison of benefits pre and post July 1

Homeowner status	Assessable assets	Current age pension entitlement per person	July 1  age pension entitlement per person	Fortnightly increase
Homeowner	$500,000	$404.00	$469.25	$65.25
Non-homeowner	$724,500	$404.00	$521.75	$117.75

Income Test 

The income test threshold for couples will increase $24, from 336 to $360 per fortnight. For singles the threshold will increase $14 from from $90 to $204 per fortnight.

Table 5: Deeming changes 

	Current	July 1
Single
Deemed income at 0.25% on first	$56,400	$60,400
Excess	$141 + 2.25% of excess	$151 + 2.25% of excess
Couple
Deemed income at 0.25% on first	$93,600	$100,200
Excess	$234 + 2.25% of excess	$250.50 + 2.25% of excess

Other points worth noting

• Rent assistance: There are no changes to rent assistance on 1 July.  The government recently announced it would increase by 15% in the May budget and is expected to take effect as part of September indexation.
• Updating assets and income: it is important that you regularly go and check through MyGov the values of your assets and adjust if necessary. Often we see people with cars valued $20-30,000 more than their current market value which results in losing the age pension you’re entitled to.
• Other tips: Be aware of funeral bonds, superannuation in accumulation phase under age pension age, annuities as strategies that can help with maximising age pension
• Commonwealth Seniors Health Card (CSHC): If you don’t qualify for age pension you should still apply for the (CSHC) as it is only income tested and has a current income limit of $90,000 for singles and $144,000 for couples.

We hope this helps you navigate the complexities around age pension. Please feel free to share this with your friends and family who may also be eligible for the age pension. If you still miss out on age pension there may be strategies we can explore to get you under the cut out asset test limit.