The recent changes to the Centrelink age pension, effective from July 1, 2024, are now fully in place, offering significant improvements to the financial well-being of older Australians. While the base pension rates remain unchanged, the adjustments to the income and asset test thresholds are helping many pensioners receive higher payments. These changes also allow more individuals to qualify for the age pension and transition from part pensions to full pensions.
Updated Age Pension Qualification Criteria
To be eligible for the age pension, individuals must be at least 67 years old and pass both the income and asset tests. As of July 1, 2024, these thresholds were adjusted to keep pace with inflation, enabling pensioners to retain more income and assets before affecting their payments.
Adjustments to the Income Test
The income test thresholds have been revised to offer increased flexibility for pensioners:
- Single Pensioners: The income-free area has risen from $204 to $212 per fortnight, allowing pensioners to earn more without reducing their pension payments. Any income exceeding this amount reduces the pension by 50 cents for every dollar earned above the limit.
- Couple Pensioners: The combined income-free area has increased from $360 to $372 per fortnight, with the same reduction of 50 cents for every dollar earned above the threshold.
The maximum income limits for pension payments have also been updated:
- Single Pensioners: The income limit for full pension eligibility is now $2,444.60 per fortnight (up from $2,436.60).
- Couple Pensioners: The combined income limit for full pension eligibility has increased to $3,737.60 per fortnight (up from $3,725.60).
Asset Test Changes
Along with the income test adjustments, the asset test thresholds have been increased, allowing pensioners to hold more assets without impacting their eligibility for pension payments.
- Homeowners:
- Single Pensioners: The asset limit for receiving the full pension has increased to $314,000 (from $301,750).
- Couple Pensioners: The combined asset limit for the full pension has increased to $470,000 (from $451,500).
- Non-Homeowners:
- Single Pensioners: The asset limit for the full pension has risen to $566,000 (from $543,750).
- Couple Pensioners: The combined asset limit for the full pension has increased to $722,000 (from $693,500).
For those receiving part pensions, the new asset thresholds are:
- Single Homeowners: Asset limit for part pensions is now $686,250 (up from $674,000).
- Single Non-Homeowners: Asset limit for part pensions has increased to $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 has increased to $1,283,000 (up from $1,254,500).
Deeming Rates and Thresholds Adjustments
Deeming rates, which are used by the government to estimate income from financial assets, remain unchanged until June 30, 2025. However, the thresholds for deeming have been updated to allow more assets 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).
Any assets above these thresholds continue to be deemed at 2.25%.
Additional Adjustments to Pension Rules
Several other pension-related adjustments were also introduced, effective 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 has increased to $813,250 (up from $781,250).
- Exempt Funeral Investments: The exemption threshold for funeral investments has increased to $15,500 (up from $15,000).
Reviewing Your Pension Eligibility
Pensioners are encouraged to reassess their financial situation to understand how the updated thresholds may affect their payments. For personalized advice, it is recommended to contact Centrelink or consult a financial advisor.
These changes to the Centrelink age pension are designed to improve the financial stability of older Australians, increasing the potential for higher pension payments and enabling more individuals to qualify for or enhance their pension benefits.
