The start of the new year has brought changes to the assets test used to calculate pensions and this may affect how much pension you receive.
From 1 January 2017 the thresholds of the value of assets you can own have changed. Nothing will change if you’re on a full-pension but if you’re on a part pension you could receive more pension, less or even lose eligibility all together.
According to the Government 90 percent of pensioners will either be better off after the changes or not affected at all.
Here’s what will change:
To receive a full pension your assets need to be below these thresholds:
Homeowner (single) $250,000 (was $209,000)
Homeowner (couple) $375,000 (was $296,500)
Non-homeowner (single) $450,000 (was $360,500)
Non-homeowner (couple) $575,000 (was $448,000)
You will no longer be eligible to receive a part pension if you have assets above these limits:
Homeowner (single) $542,500 (was $793,750)
Homeowner (couple) $816,000 (was $1,178,500)
Non-homeowner (single) $742,500 (was $945,250)
Non-homeowner (couple) $1,016,000 (was $1,330,000)
Assets that can affect your pension payment include:
- Property (not your own home)
- Superannuation and financial investments
- Business assets
- Household contents
- Motor vehicles, boats and caravans
The taper rate is the amount by which the pension will be reduced if your assets are over the assets free test limits.
In 2016 the taper rate was $1,50. This means that for every $1,000 of assets you own over the assets test free area, your pension was reduced by $1.50 per fortnight.
From 1 January 2017 the taper rate will double to $3, meaning that for every $1,000 of assets you own over the asset free area, your pension will be reduced by $3 per fortnight.
The changes to the age pension could affect your Government subsidised aged care fees. Receiving more or less pension may have an impact on your total assessable income under the aged care means test
Visit the Department of Human Services for more information on how your entitlements may change or call an aged care financial advisor for specialised advice tailored to your individual circumstances.