Changes to Aged Pension Assets Test
On the Aged Pension or planning to retire? Here's what you need to know about changes to the asset tests.
If you're receiving the Aged Pension from Centrelink - or planning to retire - then recent changes to the Asset Test are now applicable. Announced during the 2015 Federal Budget, here's what the changes mean for you.
If you are over 65 and receive a full or part-pension from Centrelink, then the changes include an increase in the amount your pension is reduced depending on your assets. For every $1000 above the asset test free amount, your pension is reduced by $3 (previously $1.50 for every $1000).
The thresholds that apply are dependent on whether you are single or a couple, own your own home or not, and are either in receipt of a full or part pension.
The market value of most of your assets is taken into account when calculating your Age Pension. This includes, but is not limited to, things such as:
- Property (excluding your home)
- Motor vehicles, boats and caravans
- Financial investments
- Superannuation if you're over Age Pension age
- Business assets
- Household contents and personal effects
Some pension-aged retirees won't be affected very much, if at all as they had planned for an SMSF to provide an income stream in retirement. For others, the changes may impact on spending patterns and quality of life they'd planned for in retirement.
For those pensioners who lost their Age Pension entitlement on 1 January 2017, a Commonwealth Seniors Health Card will be issued and this card is exempt from the usual income test requirements indefinitely.
Contact us on 02 9957 4033 or email our team to find out more about how these changes impact your retirement, pension, or retirement planning.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.