You may be aware that the Age Pension assets test will change from 1 January 2017, impacting the thresholds by which the value of assets owned (excluding the family home) are based on, before you may lose your eligibility for the Age Pension. These changes are aimed at increasing the amount of people eligible for an allowance, where a lower amount of assets are held. The below is a summary of the anticipated changes.
In January, the assets test for the Age Pension will change, however, they have also reduced the upper threshold/cut off rate that allows a part-pension to be paid.
What will change – Full pension?
– Full pension, home owners
If you are a home owner, the new assets free area will increase from $205,500 to $250,000 (singles) and from $291,500 to $375,000 (couples) without impacting your full-pension entitlements.
– Full pension, non-home owners
If you are not a home owner, the new assets free area will increase from $354,500 to $450,000 (singles) and from $440,500 to $575,000 (couples).
What will change – Part pension?
– Part pension, home owners
Couples who are homeowners will not receive the pension when their assets reach $823,000 in value (reducing from $1,156,500). Single homeowners will stop receiving the pension when they have more than $547,000 in assets (reducing from $779,000).
– Part pension, non-home owners
Singles who don’t own a home won’t qualify for the pension if assets total $747,000 (reducing from $928,000). And couples will lose pension entitlements after they’ve accumulated more than $1,023,000 in assets (reducing from $1,305,500).
If I lose my pension?
– For those who are no longer eligible for the Age pension on 1 January 2017, they will automatically be issued with a Commonwealth Seniors Health Card or Low income health card.
How to prepare for the changes?
– Consider if you have planned expenses like a holiday or home repairs that might reduce your level of assets before the changes come in, which may assist you in keeping within the threshold ranges.
If you think you might be impacted by these changes, please contact our office so we can determine what this change might be.