If you are over, or close to, 65 years of age, it is important that you and your Financial Adviser have a plan in place in preparation for any impact the changes the Government has introduced to the age pension assets test might have on your financial situation. If you haven’t already, contact your Financial Adviser soon, as these changes come into effect 1 January 2017 and may affect your eligibility for the Age Pension. If this doesn’t affect you as yet, you may wish to share this news with family and friends that it might have an impact on.
What is the Age Pension assets test?
The Age Pension assets test is a means test, which helps Centrelink determine your eligibility for the age pension and other social security payments, and generally applies to assets that you hold outside the family home.
What are the changes to the Age Pension assets test that will apply from 1 January 2017?
The lower threshold is increasing. If you have assets over the lower threshold, your entitlement to the Age Pension will reduce. Those with greater assets could see a significant reduction in, or loss of, their age pension entitlement and those with lesser assets could see an increase to their entitlement.
The rate at which your Age Pension reduces if your assets exceed the lower threshold is increasing from $1.50 to $3.00 per fortnight for every $1,000 over the threshold – this has the effect of reducing the cut-off limit where an Age Pension is no longer payable.
The following table provides a summary of the current and new Age Pension asset test thresholds. Please note that the lower thresholds have increased and the cut-off thresholds where you are not entitled to an Age Pension have been lowered.
What happens if I lose entitlement to the Age Pension?
If your Age Pension is no longer payable as a result of the changes to the asset tests effective from 1 January 2017, you will automatically be eligible for the Commonwealth Seniors Health Card which provides a range of benefits, such as discounts on certain pharmaceuticals.
We are here to help you
If you would like help in assessing the impact of these changes on your financial situation (and plan accordingly), please contact your Financial Adviser.