The Centrelink age pension changes, effective from July 1, 2024, are fully implemented and are making a positive impact on the financial flexibility of older Australians.
While the base pension rates remain unchanged, adjustments to the income and asset test thresholds have allowed many pensioners to receive increased payments.
Moreover, these changes have broadened eligibility, allowing more individuals to qualify for the age pension and some to transition from part pensions to full pensions.
Updated Qualification for the Age Pension
To qualify for the age pension, individuals must be at least 67 years old and meet the income and asset test requirements.
Starting July 1, 2024, the thresholds for these tests have been raised in line with inflation, enabling people to retain more income and assets without reducing their pension benefits.
Income Test Adjustments
The income test thresholds have been revised as follows:
Single Pensioners: The income-free area has been raised from $204 to $212 per fortnight.
Any income beyond this amount reduces the pension by 50 cents for each dollar earned over the limit.
Couple Pensioners: The combined income-free area has increased from $360 to $372 per fortnight.
Like single pensioners, couples will see a reduction of 50 cents for every dollar earned above this threshold.
The maximum income limits before pension payments are eliminated have also been updated:
Single Pensioners: The limit has been increased from $2,436.60 to $2,444.60 per fortnight.
Couple Pensioners: The combined limit has risen from $3,725.60 to $3,737.60 per fortnight.
Asset Test Changes
Adjustments to the asset test thresholds now allow pensioners to hold higher asset values while still receiving their full pension payments.
For Homeowners:
Single Pensioners: The asset limit for receiving the full pension is now $314,000 (up from $301,750).
Couple Pensioners: The combined asset limit for the full pension is now $470,000 (up from $451,500).
For Non-Homeowners:
Single Pensioners: The asset limit for the full pension is now $566,000 (up from $543,750).
Couple Pensioners: The combined asset limit for the full pension is now $722,000 (up from $693,500).
For pensioners receiving part pensions, the updated asset limits are:
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 has increased to $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).
Deeming Rates and Thresholds
Deeming rates, used by the government to estimate income from financial assets, remain frozen until June 30, 2025.
However, the thresholds for deeming have been adjusted, allowing higher asset amounts to be deemed at a lower rate:
Single Pensioners: The first $62,600 of financial assets is deemed to earn 0.25% (up from $60,400).
Couple Pensioners: The first $103,800 of combined financial assets is deemed to earn 0.25% (up from $100,200).
Assets above these thresholds continue to be deemed to earn 2.25%.
Additional Adjustments
A variety of other pension-related adjustments came into effect on July 1, 2024:
- 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 is now $813,250 (up from $781,250).
- Exempt Funeral Investment: The threshold for exempt funeral investments has risen to $15,500 (up from $15,000).
Reviewing Your Pension Eligibility
Pensioners are encouraged to review their financial circumstances to understand how these updated thresholds could impact their payments.
For personalized guidance, it is advised to contact Centrelink or seek advice from a financial advisor.
These Centrelink age pension changes are designed to provide greater financial security for older Australians by increasing potential payments and expanding eligibility.
If you are unsure about how these updates affect you, it’s essential to check your pension eligibility and make sure you are receiving the benefits you’re entitled to.
