1 January 2017 Age Pension changes

Posted 25 November 2016


Changes are being made to the assets test eligibility condition for the Age Pension. A summary of the new rule changes are that the assets test threshold for a full pension is increasing, and the reduction (taper) rate where assets exceed the threshold will double. Keep reading for more details.

People who lose the Age Pension as a result of these assets test changes may be automatically issued with a Commonwealth Seniors Health Card, which provides access to bulk billing and a range of medical, household, transport, and recreation concessions.

Eligibility for the Age Pension

You must be at least 65 years old, meet an income test and assets test, and satisfy residency requirements. For more details visit the Department of Human Services

Note that from 1 July 2017, the qualifying age for the Age Pension will increase from 65 years to 65 years and 6 months, then increase by 6 months every 2 years, reaching 67 years by 1 July 2023.

Assets test

The value of various assets you own can affect your eligibility for a pension. If your assets exceed the assets test threshold for a full pension, you may receive a part pension. If your assets go over a certain amount you will no longer receive any pension payment.

Assets test thresholds for a full pension

Pensions start reducing when assets are more than the following amounts.

Family situation
Homeowners
Non-homeowners
 
1 July 2016
1 January 2017
1 July 2016
1 January 2017
Single
$209,000
$250,000
$360,500
$450,000
Couple combined
$296,500
$375,000
$448,000
$575,000


Assets test thresholds for part pensions

You will no longer receive a part pension if your assets exceed the following amounts.

Family situation
Homeowners
Non-homeowners
 
20 September 2016     
1 January 2017     
20 September 2016
1 January 2017 
Single $793,750 $542,500 $945,250 $742,500
Couple combined      
$1,178,500 $816,000 $1,330,000 $1,016,000


Currently, for every $1,000 of assets you own over the assets test threshold for a full pension, your pension is reduced by $1.50 per fortnight. This is called the taper rate. From 1 January 2017, your pension will reduce by $3 per fortnight for every $1,000 of assets you own over the assets test threshold for a full pension.

More about assets

Assets such as cars, superannuation investments, bank accounts and investment properties are included in the assets test. The total value of some kinds of future income, such as those received from annuities or defined benefit pensions, is also calculated and included in the assets test. Your principal home is excluded from the calculation.

For more information about assets visit the Department of Human Services website.

Act now

Work out if the assets test changes affect you. If they do, consider what options you may have to modify your finances. Remember that changes will need to be in place before 1 January 2017.

Talk to the Department of Human Services on 13 23 00 to discuss if you will be impacted by the new rules or visit their website.

If you are affected, it is a good idea to review your assets and financial situation to see if you can change some of your asset holdings as well as maintaining your cash flow requirements. It may beneficial to speak to a financial adviser.

Retirement resources

Find out more about maintaining health and finances; government benefits and concessions, wills and powers of attorney, aged care planning and more.