If you are over 65 or close to 65 years of age, it is important that you know about changes the Government has introduced to the pension assets test which will come into effect 1 January 2017 which may affect your eligibility for the Age Pension.
If this doesn’t affect you as yet, you may wish to share this news with family and friends as it might affect them.
What is the Age Pension assets test?
The Age Pension assets test is a means test, which helps Centrelink determine your eligibility for the age pension and other social security payments, and generally applies to assets that you hold outside the family home.
What are the changes to the Age Pension assets test that will apply from 1 January 2017?
- The lower threshold is increasing. Those with greater assets could see a significant reduction in, or loss of, their Age Pension entitlement and those with lesser assets could see an increase to their entitlement.
- The rate at which your Age Pension reduces if your assets exceed the lower threshold is increasing from $1.50 to $3 per fortnight for every $1,000 over the threshold – this has the effect of reducing the cut-off limit where an Age Pension is no longer payable.
What happens if I lose entitlement to the Age Pension?
If your Age Pension is no longer payable as a result of the changes to the assets test on 1 January 2017, you will automatically be eligible for the Commonwealth Seniors Health Card which provides a range of benefits, such as discounts on certain pharmaceuticals.
We’re here to help
We know how these changes affect your Age Pension entitlements. So if you have any unanswered questions please contact us to discuss any potential impacts these changes may have on your financial situation.
The table below provides a summary of the current and new Age Pension asset test thresholds. Please note that the lower thresholds have increased and the cut–off thresholds where you are not entitled to an Age Pension have been lowered.
|Current Lower Threshold||New Lower Threshold from 01/01/17||Current Cut-Off Limit||New Cut-Off Limit|
Source: Count Financial
Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.
Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.
This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.