Changes to Centrelink Age Pension Asset Test Thresholds
The most significant change to asset test eligibility thresholds for the Centrelink Age Pension in the past decade is fast approaching, coming into effect from 1 January 2017. The full impact of this change seems to be going under the radar amidst news stemming out of Brexit, the Federal Budget, US Election, and the Census.
A worst case scenario could see currently eligible couples losing access to approximately $260 each per fortnight ($13,520 combined per annum) in Centrelink Age Pension payments, as well as losing their Pension Concession Card (PCC) from 1 January 2017 onward.
There is no ‘grandfathering’ that will be applied to this asset test threshold change for current recipients. Broadly, Centrelink are narrowing the threshold ranges and doubling the rate of reduction that applies to asset testing arrangements for Centrelink Age Pension payments (known as the ‘taper rate’). This is a change that effectively reverses adjustments made in the final Howard government budget.
While the most noticeable impacts of the asset test threshold changes will be negative, there will be instances where individuals are benefited by the changes. It is therefore important to view the 1 January 2017 changes in light of your own personal circumstances, and to seek advice if required.
For homeowners, thresholds relating to the upcoming changes are to be as follows:
| Current Thresholds | Single | Couple |
| Payments Reduce | $209,000 | $296,500 |
| Payments Cease | $793,750 | $1,178,500 |
Post 1 January 2017 Thresholds |
Single |
Couple |
| Payments Reduce | $250,000 | $375,000 |
| Payments Cease | $542,500 | $816,000 |
For non-homeowners, thresholds relating to the upcoming changes are to be as follows:
| Current Thresholds | Single | Couple |
| Payments Reduce | $360,500 | $448,000 |
| Payments Cease | $945,250 | $1,330,000 |
Post 1 January 2017 Thresholds |
Single |
Couple |
| Payments Reduce | $450,000 | $575,000 |
| Payments Cease | $742,500 | $1,016,000 |
A link to all key figures announced relating to this change can be found on the Department of Human Services website.
If your Age Pension payments do happen to cease, you will also lose your Pension Concession Card (PCC). You can read more about concession cards in the context of this change in my previous article, Centrelink Concession Cards (PCC, LIHCC, CSHC).
Where do you fall in the above spectrum of assessable assets, and what impact might this change have on your own retirement plans? Depending on your circumstances, there may be measures available to help to reduce the impact of this change.
We are experts in optimising Centrelink entitlements, in the broader context of our clients’ retirement planning. If you have specific queries or would like to arrange a meeting, please contact us to discuss your circumstances.
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