The Centrelink Age Pension changes, which came into effect on July 1, 2024, have significantly improved financial support for older Australians. These adjustments are helping thousands of pensioners by providing more financial flexibility, resulting in a better quality of life.
Although the base pension rates remain unchanged, the revised income and asset test thresholds have led to increased payments for many pensioners. Additionally, the adjustments have expanded eligibility, allowing more people to qualify for the age pension and enabling some to transition from part pensions to full pensions.
Key Updates on Age Pension Qualification
To be eligible for the Age Pension, individuals must be at least 67 years old and pass both the income and asset tests. Starting July 1, 2024, the thresholds for these tests were raised to account for inflation, meaning pensioners can now retain more income and assets before their pension payments are reduced.
Changes to the Income Test
The income test thresholds have been adjusted as follows:
- Single Pensioners: The income-free area, which allows pensioners to earn without affecting their pension, has increased from $204 to $212 per fortnight. For every dollar earned above this limit, the pension is reduced by 50 cents.
- Couple Pensioners: The combined income-free area for couples has risen from $360 to $372 per fortnight, with a 50-cent reduction for every dollar earned above this threshold.
The maximum income limits before pension payments are completely phased out have also been updated:
- Single Pensioners: The income limit has increased from $2,436.60 to $2,444.60 per fortnight.
- Couple Pensioners: The combined income limit has risen from $3,725.60 to $3,737.60 per fortnight.
Asset Test Updates
The asset test thresholds have been raised, allowing pensioners to own more assets without impacting their pension payments. Here’s a breakdown of the changes:
- Homeowners:
- Single Pensioners: The full pension asset limit for single homeowners is now $314,000, up from $301,750.
- Couple Pensioners: The combined asset limit for couples has increased to $470,000, up from $451,500.
- Non-Homeowners:
- Single Pensioners: The asset limit for non-homeowners is now $566,000, up from $543,750.
- Couple Pensioners: The combined asset limit for non-homeowners is now $722,000, up from $693,500.
For those receiving part pensions, the new thresholds are as follows:
- Single Homeowners: The asset limit for part pensions is now $686,250, up from $674,000.
- Single Non-Homeowners: The asset limit for part pensions is now $938,250, up from $916,000.
- Couple Homeowners: The combined asset limit for part pensions is now $1,031,000, up from $1,012,500.
- Couple Non-Homeowners: The combined asset limit for part pensions is now $1,283,000, up from $1,254,500.
Updates on Deeming Rates and Thresholds
Deeming rates, used to calculate income from financial assets, remain frozen until June 30, 2025. However, the asset thresholds for deeming have been indexed, which means more of a pensioner’s assets are deemed at the lower rate. The updated thresholds are:
- Single Pensioners: The first $62,600 in financial assets is deemed to earn 0.25%, up from $60,400.
- Couple Pensioners: The first $103,800 in combined financial assets is deemed to earn 0.25%, up from $100,200.
Any assets above these thresholds are deemed to earn 2.25%.
Additional Pension Adjustments
A number of other pension-related updates came into effect on July 1:
- Retirement Village and Granny Flat Residents: The allowable amount for non-homeowners in retirement villages or granny flats has increased to $252,000, up from $242,000.
- Special Disability Trusts: The concessional asset value limit has increased to $813,250, up from $781,250.
- Exempt Funeral Investments: The threshold for exempt funeral investments has increased to $15,500, up from $15,000.
Reviewing Your Pension Eligibility
Pensioners are encouraged to reassess their financial situation to see how these updated thresholds may affect their pension payments. For tailored advice, it’s recommended to reach out to Centrelink or consult with a financial advisor.
These changes to the Centrelink Age Pension aim to offer greater financial stability for older Australians, ensuring more individuals can either qualify for or increase their age pension benefits. This ongoing support plays a key role in enhancing the well-being of pensioners across the country.
