It’s one of the biggest concerns for pensioners, or those approaching retirement: “How much can I earn or have in assets without affecting my fortnightly payments?”
Well, from July 1 this year, the amount of income you can bring in, along with the sum-total worth of assets you can possess, without impacting the amount you’re paid by Centrelink is actually set to increase, as the government has revised the test thresholds.
According to the qualifying criteria set by the Department of Human Services, older Australians are able to earn additional income from employment, investments or property and still receive an Age Pension, however there are disqualifying limits. From next Monday though, these are scheduled to rise, as they do each year.
Currently those in receipt of a full pension are permitted to earn no more than $172 per fortnight before their pension is impacted, while couples can take home $304 a fortnight (combined) before incurring any reductions. The pension payment is then reduced by 40 cents for every dollar earned over those amounts.
Next week’s changes will see these amounts rise to $174 per fortnight for singles, and $308 for couples, while deductions will increase to 50 cents for every dollar earned over the limit, according to new figures published by the Department of Social Services.
The government have also amended the disqualifying income limit for those on a part pension, with the new amount for singles being a total of $2026.40 per fortnight (up from $2024.40), while the limit for couples’ combined income is $3100.40 (up from $3096.40).
When it comes to applying for the Age Pension, there is also a long list of assets that need to be declared, ranging from property and business interests to personal items such as jewellery and computers, as well as privately owned vehicles, including cars, boats, caravans and motorhomes.
Other assets that can impact upon your pension payments include retirement village contributions, life interests and financial investments, along with any income streams, including superannuation income. Any assets that are “gifted” to someone else, or sold for less than their worth, may also count towards the assets test.
Currently, a single pensioner who owns their own home and is in receipt of the full entitlement can have assets valued up to $258,500 before their payments reduce, whilst individuals who do not own a home can have assets worth as much as $465,500 before their pension is affected. From July 1, this will rise to $263,250 and $473,750 respectively.
For couples in receipt of the full pension, homeowners will now be allowed to have combined assets worth $394,500 (up from $387,500) while the limit for non-homeowners will rise to $605,000 (up from $594,500) before it impacts upon their Age Pension payments.
The assets test limits increase for those on a part pension, however those in possession of assets valued over the stated amount have their pension payments stopped rather than reduced. As of July 1, individuals can have assets worth up to $572,000 (homeowner) and retain their part pension, or $782,500 for those who do not own their own property.
For couples on a combined part pension the limit for homeowners will now be $860,000 and $1,070,500 for non-homeowners, while couples on a combined pension, however separated due to illness, have new asset limits of $1,012,000 and $1,222,500 for homeowners and non-homeowners respectively.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.