The new Centrelink/Department of Veterans’ Affairs asset test rules came into effect on January 1, 2017. This increases the taper rate back to the pre July 1, 2007 rate of $3 per fortnight for every $1000 of assets over the lower threshold.
As a result, many part-pensioners may have seen a reduction or complete loss of pension entitlements. Full age pensioners will not have been affected. Some clients at the lower end of the assets test range may have even received a slight increase. In addition, the asset threshold for allowances has been brought back into line with the pension assets test thresholds.
- Clients who lost all pension entitlements on January 1 due to the changes will automatically receive a Commonwealth Seniors Health Card (CSHC) to replace the lost Pension Concession Card. For these clients, the CSHC will not be means-tested.
- Review income needs and cashflow for affected clients to determine whether clients need to increase the drawdowns from account-based pensions or other investments
- Clients whose regular income is now less than their basic income needs may wish to review options for generating a secure regular income, such as lifetime annuities
- Clients in residential aged care who experienced a loss of pension may also find their means-tested fees reduce with the next quarterly update – this may offset some of the income loss.