The Centrelink age pension changes, which took effect on July 1, 2024, are now fully implemented, benefiting thousands of older Australians. These changes provide enhanced financial flexibility and contribute to an improved quality of life for pensioners. While the base pension rates remain the same, updates to the income and asset test thresholds have allowed many pensioners to receive higher payments and expanded eligibility, ensuring that more individuals qualify for the age pension and some can transition from part pensions to full pensions.
Updated Qualification for the Age Pension
To be eligible for the age pension, individuals must be at least 67 years old and pass both the income and asset tests. From July 1, 2024, these thresholds have been increased in line with inflation, giving pensioners the ability to keep more of their income and assets before it impacts their pension payments.
Income Test Adjustments
Significant adjustments have been made to the income test thresholds:
- Single Pensioners: The income-free area has risen from $204 to $212 per fortnight. Beyond this threshold, the pension reduces by 50 cents for every dollar over the limit.
- Couple Pensioners: The combined income-free area for couples has increased from $360 to $372 per fortnight, with any income above this leading to a reduction of 50 cents per dollar.
Additionally, the maximum income limits before pension payments cease have been updated:
- Single Pensioners: The limit has increased from $2,436.60 to $2,444.60 per fortnight.
- Couple Pensioners: The combined limit has increased from $3,725.60 to $3,737.60 per fortnight.
Asset Test Changes
Changes to the asset test thresholds allow pensioners to hold higher asset values without it impacting their 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 has risen to $470,000, 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, from $693,500.
For those receiving part pensions, the new asset limits are as follows:
- Single Homeowners: The asset limit for part pensions has increased to $686,250, 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, 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 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 now 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 amounts above these thresholds continue to be deemed to earn 2.25%.
Additional Adjustments
Several other pension-related adjustments took effect on July 1, including:
- 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 Investment: The threshold for exempt funeral investments is now $15,500, up from $15,000.
Reviewing Your Pension Eligibility
Pensioners are encouraged to reassess their financial situations to understand how these new thresholds might impact their payments. For more specific guidance and advice, it is recommended to contact Centrelink or consult a financial advisor.
These changes to the Centrelink age pension are designed to provide greater financial stability for older Australians, potentially increasing their payments and enabling more people to qualify for or enhance their age pension benefits.
