As the year draws rapidly to a close, it may feel like the changes to the Asset Test for the Aged Pension have appeared out of nowhere. However, these changes were announced in the 2015 Federal Budget and apply to you.
Firstly, let’s look and see who these measures apply to.
If you are over 65 and in receipt of a full or part Aged Pension, then you need to be aware that for every $1,000 owned above the assets test free amount your pension will be reduced by $3 (this was previously reduced by $1.50 for every $1,000).
The thresholds that apply are dependent on whether you are single or a couple, own your own home or not, and are either in receipt of a full or part pension.
|From 1 January 2017 the lower assets tests will increase. Pensions start reducing when assets are more than the following amounts|
|2016 rules||2017 rules|
|Single homeowners full pension assets must be less than||$209,000||$250,000|
|Single non-homeowners full pension assets must be less than||$360,500||$450,000|
|Couple homeowners full pension assets must be less than||$296,500||$375,000|
|Couple non-homeowners full pension assets must be less than||$448,000||$575,000|
|Pensions cease when assets are more than the following amounts.|
|2016 rules||2017 rules|
|Single homeowners part pension assets must be less than||$793,750||$542,500|
|Single non-homeowners part pension assets must be less than||$945,250||$742,500|
|Couple homeowners part pension assets must be less than||$1,178,500||$816,000|
|Couple non-homeowners part pension assets must be less than||$1,330,000||$1,016,000|
What assets are included in the threshold?
The market value of most of your assets is taken into account when calculating your Age Pension. This includes, but is not limited to, things such as:
For some retirees, there will be little or no effect at all. They had always planned that their Super would provide them with their income stream in retirement. For other retirees these changes may impact on their spending patterns and the quality of life they are looking at in retirement.
Commonwealth Seniors Health Card
For those pensioners who lose their Age Pension entitlement on 1 January 2017, all is not lost! You will be issued with a Commonwealth Seniors Health Card and this card is exempt from the usual income test requirements indefinitely.
How can we help?
If you are concerned that the Government’s changes to the Aged Pension are going to affect you, please call Super-Advice on 1300 557 782 to arrange a time to meet so that we can discuss your particular requirements in more detail.