News

The Age Pension assets test changed on 1 January 2017

From 1 January 2017, the government is changing how your assets affect your Age Pension. 

There are two changes:

  • An increase in the amount of assets you can have and get the full Age Pension, called the ’assets test free area’.
  •  An increase in the rate at which the part pension reduces, called the ‘assets test taper rate’.

A higher ‘assets test free area’

As a result of the changes, the amount of assets you’ll be able to hold and get the full pension is rising. Here are the new limits, called the ‘assets test free area’.

Current limit
New limit from 1 January 2017
Non homeowner (single) $360,500  
$450,000
Non homeowner (couple) $448,000 
$575,000 
Homeowner (single) $209,000  $250,000 
Homeowner (couple) $296,500 
$375,000 

Part pensions will reduce quicker

The rate at which a part pension reduces is increasing. This is called the ‘assets test taper rate’. From 1 January 2017, your pension will reduce by $3 per fortnight for every $1,000 of assets you own over the asset test free area. Currently, for every $1,000 of assets you own over the assets test free area, your pension reduces by $1.50 per fortnight.

As a result, the amount of assets at which the part pension is no longer paid will be lower.

Current limit
New limit from 1 January 2017
Non homeowner (single) $945,250 
$742,500  
Non homeowner (couple)
$1,330,000 
$1,016,000  
Homeowner (single)  $793,750 
$542,500  
Homeowner (couple) $1,178,500 
$816,000   

If you’re losing your pension

If you’re going to lose your Age Pension as a result of the changes, you’ll automatically get a Low Income Health Care Card, or, if you’re over age pension age, you’ll get a Commonwealth Seniors Health Card. These cards give you access to things such as less expensive pharmaceuticals and Medicare bulk billing where available.

For more information about the age pension, go to the Department of Human Services

Preparing for the changes – get financial advice

If you think you might be affected by the change, you may want to seek financial advice as soon as possible so you can prepare for any change to your income.

Things you need to think about include what changes you need to make as a result of any lost income and potential strategies you may be able to put in place to keep your current entitlements.

Current limit
New limit from 1 January 2017
Non homeowner (single) $945,250 
$742,500  
Non homeowner (couple)
$1,330,000 
$1,016,000  
Homeowner (single)  $793,750 
$542,500  
Homeowner (couple) $1,178,500 
$816,000   
Current limit
New limit from 1 January 2017
Non homeowner (single) $945,250 
$742,500  
Non homeowner (couple)
$1,330,000 
$1,016,000  
Homeowner (single)  $793,750 
$542,500  
Homeowner (couple) $1,178,500 
$816,000   
Current limit
New limit from 1 January 2017
Non homeowner (single) $945,250 
$742,500  
Non homeowner (couple)
$1,330,000 
$1,016,000  
Homeowner (single)  $793,750 
$542,500  
Homeowner (couple) $1,178,500 
$816,000   
Current limit
New limit from 1 January 2017
Non homeowner (single) $945,250 
$742,500  
Non homeowner (couple)
$1,330,000 
$1,016,000  
Homeowner (single)  $793,750 
$542,500  
Homeowner (couple) $1,178,500 
$816,000   

 

Current limit
New limit from 1 January 2017
Non homeowner (single) $945,250 
$742,500  
Non homeowner (couple)
$1,330,000 
$1,016,000  
Homeowner (single)  $793,750 
$542,500  
Homeowner (couple) $1,178,500 
$816,000