Asset test changes:
How do they benefit you?
There’s nothing hard and fast in the world of retirement income.
Particularly when it comes to the Age Pension.
As you are no doubt aware, last week saw indexed increases to the base rate of the Age Pension. Hidden in the coverage were more significant changes; these were changes in the income test threshold and the assets test threshold. Both have been increased and this means either that many Australians will have an increase in their fortnightly income or others will now be eligible for the first time.
Today we look at the changes to the assets threshold and what this now means for retirees.
What changed on March 20 2023?
Here’s how the assets thresholds have just changed:
Pension Disqualifying Assets Limits
| Family Situation – Resident | Previous Amount | 20 March 2023 | Increase |
| Single, homeowner | $622,250 | $634,750 | $12,500.00 |
| Single, non-homeowner | $846,750 | $859,250 | $12,500.00 |
| Couple (combined), homeowner | $935,000 | $954,000 | $19,000.00 |
| Couple (combined), non-homeowner | $1,159,500 | $1,178,500 | $19,000.00 |
Why could this be good news for you?
Let’s say you are already receiving a small part Age Pension (i.e. you are already under the disqualifying assets limit). It’s still important to treat any incremental increases in thresholds as a trigger to have another look at your own position, especially if you haven’t provided any updates to Centrelink for a while.
While it’s common knowledge that if we have a specific change in financial circumstances we should update Centrelink, often the situation changes over time with nothing to remind us of the reason we need to update.
For instance, your bank account may be lower than when you initially applied, or your car or other personal assets may have depreciated, so it may be worth looking into whether you may be eligible for more than you are getting.
Here’s how Bev benefitted from an update
Bev initially applied for the Age Pension three years ago when she had about $50,000 in savings and a $15,000 car. She has been receiving a part-Age Pension ever since. Because of a few holidays and an increase in her outgoings (due to cost-of-living rises) Bev’s savings are now $35,000. At the same time, the value of her car has decreased to $10,000. This means that her assessable assets have decreased by $20,000, but Centrelink is still assessing these assets at the same value they were when Bev first applied. We encouraged her to advise Centrelink of these changes, which she did. Her Age Pension entitlements have now increased by $60 per fortnight due to her lower asset totals as well as the extra income from the March 20 indexation of Age Pension rates.
This is a great outcome for Bev who was already on the Age Pension. Additionally, many Australians who have previously just missed out on eligibility may now be entitled to the Age Pension and Pension Concession Card (PCC) as they now sit within the new asset thresholds. You won’t be back paid any entitlements if you haven’t applied, so it’s helpful to re-run the sums as soon as possible, to check your current status. You can do so free of charge using the Age Pension Eligibility Calculator.
If you are still unsure how the new rates and thresholds work, or whether it may be worth reviewing your circumstances with Centrelink, you can make an Entitlements Consultation booking in which we can share the rules and answer any questions of concern.
We’d like to know why our age pensions increased by only $2.00 each when the promised sum was $56 per couple with own home?
Hi Basil, thank you for your enquiry! To be certain, the best thing to do is call Centrelink on 132 300. Usually the issue is that although you received the full pension increase, another asset such as your super has increased in value which therefore reduces the pension and making it appear as though the increase was not received.
Your pension only went up by $2 because it was only for part of the fortnight and the full payment will be in the next fortnight
If we buy a new vehicle and reduce my super by that amount do I need to let Centrelink know or does it just increase my assets by same amount
Hi Loreto, thank you for seeking clarity! The answers are yes and yes. You should let Centrelink know of the change so they can update your assets accordingly (lower your super value, add the new car AND remove the old car if applicable) however you are right that because your assets are likely still of similar value, just in the form of a car instead of super, your pension amount will not likely change. Events like this are a good opportunity to update Centrelink on the values of ALL of your financial assets though as there may have been other changes since Centrelink were last updated that impact the amount of pension you receive.
Please advise me the amount of the Assets for a single person owning my own unit it was previously $280,000.00 is it still the same.
Hi Kenneth, thank you for reaching out! You can find the full breakdown of all thresholds on our website HERE.
There is incomplete information available from Centrelink about how Work Bonus operates annually and what happens if you earn up to the current Cap of $11.800.
The Centrelink factsheet online informs the amount that can be earned is usually $7.800 and thus has increased to $11.800 until Dec 2023 then the allowance before your pension is affected returns to $7.800. There is absolutely no information available about the following:
Is the amount of $11.800/$7.800 applicable to a 12 month period?
If so, is the 12 month period commencing from the date you first receive pension. In my case June 2022. Or, is the period 1July to 30 June each financial year?
Without the above information it is Impossible to manage the earnings within the Cap and within what time frame?
Centrelink Customer Service Officers are unable to answer this question. They have told me -they do not know. Please help.
Hi Norma, thank you for sharing your experience! With the Work Bonus, it starts accruing from the day you begin receiving Age Pension payments and continues to accrue (if unused) until you hit the cap. Once you reach the cap it stops accruing however once you use some/all of the work bonus it will begin accruing again from your next pension payment onward. Good luck with your forward planning!
Hi, I have just found out that there is an error in the amount of my super listed with Centrelink.
I’m surprised because the reason given, for all the time it took for retirement essentials & Centrelink to complete my application, was because it “takes that long to check all the information.”
What should I do now?
Just take it to Centrelink?
Hi Terri, thanks for coming back to us, always good to hear from a returning customer. You can contact Centrelink directly on 132 300 if you would like to resolve the matter yourself. We can assist via either a consultation or our Keeping Your Pension service. We will send you an email separate to this comment with more details on the two services so you can decide if you would like to proceed.