When it comes to applying for the Age Pension there are many things that would-be pensioners need to consider when filing their paperwork, including which assets need to declared and which are exempt from assessment.
There are 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.
The Department of Human Services outlines the assets test limits on its website, with the amounts having been updated in July.
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.
For couples in receipt of the full pension, homeowners can have combined assets worth $387,500 while the limit for non-homeowners is $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. Individuals can have assets worth up to $564,000 (homeowner) and retain their part pension, or $771,000 for those who do not own their own property.
For couples on a combined part pension the limit for homeowners is $848,000 and $1,055,000 for non-homeowners, while couples on a combined pension, however separated due to illness, have asset limits of $998,500 and $1,205,500 for homeowners and non-homeowners respectively.
However, there are also a number of assets that the government does not take into account when valuing the total worth of any assets, including your main home and any surrounding land up to two hectares. Property or money bequeathed to you as part of an estate, which you cannot access for 12 months, is also exempt, as is any money received through the NDIS, along with aids for those with disabilities.
Prepaid funerals, cemetery plots, accommodation bonds paid to aged care facilities and superannuation payments, from which a pension is not being paid, are also exempt from assessment and do not need to be declared.