The Centrelink age pension changes, implemented on July 1, 2024, are now fully in effect and providing financial relief to thousands of older Australians. These updates are improving the financial flexibility of pensioners and contributing to a better quality of life by increasing pension payments and expanding eligibility.
Although the base pension rates have remained unchanged, adjustments to the income and asset test thresholds mean that many pensioners are now receiving higher payments. These changes have also expanded the pool of eligible individuals, allowing some to move from receiving part pensions to qualifying for the full pension.
Key Changes to Age Pension Eligibility
To qualify for the age pension, individuals must be at least 67 years old and pass both income and asset tests. As of July 1, 2024, the thresholds for these tests were increased in line with inflation. This allows pensioners to retain more income and assets before their pension payments are affected.
Income Test Updates
The income test thresholds have been revised as follows:
- Single Pensioners: The income-free threshold, which allows pensioners to earn money without affecting their pension, has increased from $204 to $212 per fortnight. Beyond this, the pension is reduced by 50 cents for every dollar of income earned over the limit.
- Couple Pensioners: The combined income-free threshold has increased from $360 to $372 per fortnight. Income exceeding this limit results in a 50-cent reduction for each dollar earned above the threshold.
Additionally, the maximum income levels before pension payments stop have also risen:
- Single Pensioners: The limit has gone up from $2,436.60 to $2,444.60 per fortnight.
- Couple Pensioners: The combined income limit has increased from $3,725.60 to $3,737.60 per fortnight.
Asset Test Adjustments
The asset test thresholds have also been updated, allowing pensioners to have higher asset values without losing their pension benefits.
For Homeowners:
- Single Pensioners: The asset limit for receiving the full pension has increased to $314,000 (up from $301,750).
- Couple Pensioners: The combined asset limit for the full pension has risen to $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 has increased to $722,000 (up from $693,500).
For those on part pensions, the new asset test thresholds 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 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).
Deeming Rates and Thresholds
Deeming rates, which the government uses to calculate income from financial assets, will remain unchanged until June 30, 2025. However, the thresholds for deeming have been adjusted, allowing pensioners to earn more in financial assets before they are deemed at a higher rate.
- Single Pensioners: The first $62,600 in financial assets is now 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).
Assets exceeding these thresholds will continue to be deemed to earn 2.25%.
Other Adjustments
In addition to the changes above, several other pension-related updates have taken effect:
- Retirement Village and Granny Flat Residents: The allowable asset 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 Investment: The threshold for exempt funeral investments has increased to $15,500 (up from $15,000).
Reviewing Pension Eligibility
Pensioners are encouraged to review their financial situation to see how these updated thresholds may affect their payments. For tailored advice and more information, it is recommended to contact Centrelink or consult a financial advisor.
These adjustments to the Centrelink age pension system aim to provide more financial stability to older Australians. By increasing payment amounts and expanding eligibility, the changes offer more opportunities for pensioners to access higher benefits and improve their financial wellbeing.
