A recent popular article on the way asset test changes mean more older Australians are now eligible for the Age Pension provoked a lot of interest. Today we look at the other side of the equation – the March 20 changes to the incomes test thresholds.
When people reach Age Pension age they often continue working, but not always because they really want to. Is this you?
Some have been considering applying for Age Pension benefits but are unsure about how it all works. We can understand this as the rules do look complex and the application process does require a lot of detail and proof of identity, earning and assets.
Or maybe you have previously explored your eligibility and discovered that you have been earning ‘too much’.
Either way, the March 20 changes in income test thresholds and the indexation of Age Pension benefits, offers a timely reminder to check that you aren’t missing out on benefits that you thought were out of your reach.
There are two important things to remember about the rules attached to Age Pension eligibility.
The first is that the rules change fairly frequently, sometimes with little notice, but there are regular legislated changes on March 20 and September 20 every year. This is when Age Pension entitlements are indexed and this almost always means an increase in the upper thresholds for qualification for the income test and the assets test. So, for instance, on March 20 this year the upper (disqualifying) limit for the income test for a single person was increased from $2243 per fortnight by $75 to $2318 per fortnight. The lower thresholds change in July each year. (see more income thresholds here).
The result is that more people will now be eligible.
The second aspect that makes a difference when people might now be eligible is that benefits are not back paid to when you ARE eligible – you actually need to have applied. So if you are almost eligible, it is important to check in and review your eligibility at least every March, July and September so that you can apply immediately and not miss out on your entitlements any longer than necessary. (You can check your eligibility now by using Retirement Essentials Age Pension Entitlement Calculator).
Doing so has helped Hassan and Meera to secure their Age Pension. Here’s how it worked.
Both Hassan (70) and Meera (68) were still working.
They had an advice consultation to check their entitlements late last year and at the time weren’t eligible. They heard there were changes to the work bonus earlier this year as well as the income test on March 20, so they wondered if these changes might now make them eligible. They booked another consultation for a review of their eligibility and to understand how these changes might help them in potentially receiving benefits:
As they were still working, they receive employment income of $74,000 per annum between them. They also have accessible rental income of $300 weekly (or $15,600 per annum) and deemed income of $1,200 per annum. This meant that, Hassan and Meera were not eligible for Age Pension benefits, as their combined income was over the previous threshold of $89,211 per annum. As they were not entitled to the Age Pension they could not previously take advantage of the higher Work Bonus of $11,800.
With the income threshold increase as of 20 March, the allowable threshold is $92,144 pa for a couple. This means that they are now under the income threshold and the Work Bonus (of $11,800 each) comes into effect.
The good news is that Hassan and Meera are now eligible for a part Age Pension, based upon assessable income (after the Work Bonus is applied) of $76,000 per annum. They will automatically receive the Pensioners Concession Card as part of their entitlement.
It pays to review your situation regularly to check if changes to the Age Pension thresholds or rules – or your own earnings or assets – might affect your overall eligibility.
If it all seems too hard, Retirement Essentials offers affordable entitlement consultations, support to apply for an Age Pension or Commonwealth Seniors Health Card and specific tailored advice consultations. You can learn more about this support here.
Please forward the new assets test for single.
Thank you
Hi Henriette, thank you for your request. As stated in the article, you can view all of the applicable thresholds HERE.
I was born in 1948. So I am now 75 years old. I was on pension for a few months in 2017 when my husband was dying of cancer and I retired to look after him at home. When he passed away I went back to work. I have been working since and has not received any pension. I want to go on a pension soon. Can you help me.
Hi Mooi, thank you for seeking further assistance. Separately to this comment we will send you an email with the services we offer that provide you with the guidance and support necessary to apply for the Age Pension
I am 70 years old and have been retired officially for 5 years and living off my super .My wife still works part-time 25 hrs per week.We have an investment that we will use to downsize our residence .Just wondering if I am able to get the age pension.
Hi Stewart, thanks for reaching out to us! We will be happy to review your situation and confirm what entitlements you are eligible for. Separate to this comment we will send you an email with the best next steps.
i am 75 on age pension. my wife is 45 earning a small wage.
i am assessed as a couple but my base pension rate is the single rate. this is not fair as my wife pays tax on her pay and then i also get deducted 50c for every gross $ over my bonus allowance of $12000 pa.
why am i not paid couple’s rate when treated as a couple?
hi Henrietta. I’m due to transfer to Age Pension on 19th May but I work 48 hour fortnight and centrelink advised that because of our investments (my husband is already retired and only receives a part pension) my pension amount will be $477 pf. If I continue to work would it be beneficial if I dropped a day a week and only work a 32 hour fortnight?
If my wife has assets and income for a modest retirement and I don’t have any and do not want to draw on her without causing friction and hardship have I any options?
Hi John, thank you for seeking clarity! You can definitely look to apply for the Age Pension however Centrelink will assess you as a couple meaning your wife’s income and assets will likely impact how much pension you receive.
I am retiring in 2 weeks. When can I apply for a pension
Hi Elizabeth, congratulations on retiring! You can potentially get the ball rolling now so we’ll send you an email separate to this comment detailing how we can help guide and support you through the process.
Hi, I would like to retire, I am 71 and still working full-time. I believe you guide people through this process. What are your fees. TIA, Jeff
Hi Jeff, thank you for commenting! I’ll be happy to send you an email separate to this comment with the services we offer that can help guide and support you from lodgement through to approval.
Hi Steven
I was eligible for pension entitlement in September last year but have continued working as i have a small business. Things are changing rapidly due to competitivity, and waning energy. I have now decided to retire as of the 30 June. Do i have to spend lots of time at Center Link or can I get help from Retirement Essentials
Hi Peter, congratulations on graduating into retirement! We would be happy to help guide and support you along the journey but there are fees for our service vs Centrelink are free. I’ll send you an email with our services for you to consider if it is right for you or if you would prefer to apply directly through Centrelink.
I would like to know if any part of a purchased Commonwealth defined benefit non- indexed pension (non taxable as >60, no underlying account value) is included in the income test? can you answer this or do I need to make an appointment?
Hi Claire, thank you for your question! Centrelink will assess the defined benefit described as income. They will allow 10% of the gross total to be deducted but the remaining amount received will count as income.
Hi Steven,
I retired in July last year and transferred my employers defined benefits super into a large Superannuation institution and am living off an annual superannuation pension of around $70K (paid fortnightly). I am 70 yrs old, my wife does not work. We own our home and have no debt. Your online pension calculator says that I am ineligible for a part pension or HCC etc. due to the income I received in my last annual return. Would you please send me some information on the services offered through Retirement Essentials so that I can discuss my options re structuring my retirement needs and dealing with Centrelink via your service?
Hi Terry, thank you for seeking guidance and support on what to do next! Separately to this comment we will send you an email clarifying the services we offer and how they may help you make the right decision.
Hi Steven, could you send me a list of your services and the cost?
Thankyou
Hi Marcia, thank you for your request! I have sent you an email separate to this comment with the services we offer and their associated costs.