As you may know, Centrelink determines an applicant’s Age Pension entitlement by assessing their income and assets independently, which is referred to as the Means Tests. The Means Tests are there to ensure the Age Pension is targeted to those who need it most. From 1 July 1st 2018, Centrelink will follow new thresholds for the Means Tests
Changes to the Income Test
The lower and upper income thresholds for the Age Pension income test will increase again from 1 July 2018. The new income test thresholds are as follows:
The pension amount starts reducing by $0.50 for every $1 your income exceeds these amounts and does not include the work bonus.
There have also been changes to deeming rules. Centrelink does not assess the actual income that you receive on your financial assets, which includes superannuation, loans, bonds, shares, or bank accounts. To make the assessment process easier, Centrelink “deems” or calculates the income they include in the Income Test from your financial assets. Starting 1 July, the deeming rates will be 1.75% on your financial assets up to $51,200 (Singles) or $85,000 (Couples) and 3.25% on your financial assets over these thresholds.
Changes to the Assets Test
The lower and upper assets thresholds for the Age Pension assets test will increase starting 1 July 2018. The new assets test thresholds are as follows:
Under the Assets Test, your pension amount starts reducing by $3 for every $1,000 your assets exceed these amounts.
It is important to take note that Centrelink regularly adjusts the thresholds and deeming rates for the Means Tests. For example, the upper income threshold for the Age Pension income test is adjusted three times a year – March, July, and September. On the other hand, the lower threshold for the assets test is only adjusted annually every July.
Our Age Pension Calculator has been updated and will give you an accurate view of what you will be entitled to from 1 July, 2018. Check your entitlements under the new rules here.
Or, if you have any questions simply call us 1300 527 727. Our Age Pension Specialists are waiting to take your call.