Assets test changes for pension payments, which are set to come into force on 1 January 2017, will vary the amount of entitlements for many Australian retirees.

The announced changes by the federal government are increases to the asset test threshold. The assets test refers to the dollar amount of assets owned – outside of the family home, the value of the family home is exempt and not included when calculating personal wealth.

Pension payments will not be affected if your assets are below the new thresholds.

Table one: Full-pension thresholds:

If your assets out-side of the family home are below these rates, you will still be entitled to the full pension.

Table two: Part-pension thresholds:

In addition to the increased limits, your pension will be decreased by $3.00 per fortnight for every $1,000 of assets above the new threshold limit. This is a sharp increase from the current rate of $1.50 (75 cents for couples), which means pensions will reduce at a faster rate.If your assets out-side of the family home are above these limits, a part pension may no longer be payable.

While there will of course be winners from these new parameters, some retirees may find their fortnightly pension decreases as a result of the changes. Anyone in this boat will be contacted with a letter from the government, informing them of their individual rate of change moving forward.

People who do find that they are no longer entitled to the pension will automatically receive a Commonwealth senior’s card and/or a low-income health care card, which provides greater access to Medicare bulk billing and cheaper pharmaceuticals.

For a greater understanding of the new legislation, and the options available to maximise your benefits, contact your financial advisor. There are a number of different strategies that we can advise you on in relation to:

  • Arranging your personal assets before the changes come in so as to retain your entitlements
  • Exploring ways to replace lost income if your entitlements are reduced
  • Creating a spending plan to ensure you have enough cash flow for the future.

We can help you plan for a better future.


Devils Marbles:

The Devil’s Marbles are a geological wonder in the Northern Territory, formed over millions of years through erosion, these giant boulders balance over the top of each other. They are still changing shape each day, varying from 50 centimetres to six metres in diameter. Much like the changing nature of the Devil’s marbles, the 2015 budget has announced a rebalancing of the assets test. The assets test is changing a with a view to improve fairness and affordability of the aged pension.

Need more information, please contact us.