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Taper Rates: Understanding the Age Pension sliding scale

This often misunderstood term applies to a sliding scale which sits between entitlement for a full Age Pension, a part Age Pension and no pension at all.

When applied to your assets, it means that the value of your assets above the limit for a full Age Pension will trigger a reduction in your fortnightly entitlement.

The current taper rate is a reduction of $3 per fortnight for every $1,000 over the full Age Pension threshold. These are currently:

  • $270,500 for single homeowners and $405,000 for couple homeowners
  • $487,000 for single renters and  $621,500 for couple renters

This amount is applied until your entitlement reaches a cut-off point where you receive no pension. This threshold is currently

  • $593,000 for single homeowners and $891,500 for couple homeowners
  • $809,500 for single renters and $1,108,000 for couple renters.

Here’s a short case study to illustrate the taper rate in action.

Robert is a 68 year-old single homeowner.

He earns no wages or salary, and his income deemed on assets of $300,000 is far below the income threshold.

So his Age Pension entitlement is assessed on the basis of his assets.

The full Age Pension assets threshold is $270,500 for single homeowners.

Because Robert is $29,500 over the threshold, a taper rate of $3 per fortnight, per $1000 in excess of the threshold, means his pension will be reduced by $3 x 29.5, or $88.50 per fortnight ($2301 per annum).

You can check how your assets affect the amount of your entitlements on our free eligibility calculator.

 

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