The Centrelink age pension changes, which took effect on July 1, 2024, are now fully implemented, providing a significant boost to thousands of older Australians. These changes offer enhanced financial flexibility and improve the quality of life for many by expanding eligibility and increasing payments based on updated income and asset test thresholds.
Updated Qualification for the Age Pension
To qualify for the age pension, individuals must be 67 years old and pass both income and asset tests. As of July 1, 2024, the thresholds for these tests were raised in response to inflation, allowing individuals to retain more income and assets before their pension payments are affected.
Income Test Adjustments
The income test thresholds were adjusted to benefit pensioners, allowing them to earn more without impacting their payments:
- Single Pensioners: The income-free area has increased from $204 to $212 per fortnight. Beyond this amount, the pension is reduced by 50 cents for every dollar over the limit.
- Couple Pensioners: The combined income-free area has risen from $360 to $372 per fortnight, with a 50-cent reduction for every dollar above the threshold.
The updated maximum income limits before pension payments cease are as follows:
- Single Pensioners: The limit has 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
The asset test thresholds have also been adjusted to allow pensioners to possess more assets without affecting their pension payments. The updated thresholds are:
- 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 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 has increased to $722,000 (up from $693,500).
For those receiving part pensions, the new 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 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, which are used by the government to estimate income from financial assets, remain frozen until June 30, 2025. However, the thresholds for deeming have been indexed, 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).
Amounts exceeding these thresholds will continue to be deemed at a rate of 2.25%.
Additional Adjustments
Additional pension-related changes effective from July 1, 2024, include:
- 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 increased to $15,500 (up from $15,000).
Reviewing Your Pension Eligibility
Pensioners are encouraged to review their financial situations to see how these updated thresholds may impact their payments. For personalized guidance, it is recommended to contact Centrelink or consult a financial advisor.
These changes aim to provide greater financial stability for older Australians, increase potential pension payments, and expand eligibility, allowing more people to benefit from the age pension. By enhancing these thresholds, the government has ensured that pensioners can retain more of their income and assets, supporting their well-being during retirement.
