The current maximum rates of pension are as follows:
Singles – $877.10pf Couples – $661.20pf each
(Rates effective from 20/09/2016 – 31/12/2016 and include base pension + supplements)
Not everyone is entitled to the maximum rate of pension…
Australia has a means tested social security system which is designed to work like a safety net.
The more in assets or income you have…the less pension you may be entitled to.
If your assets or income exceed the cut off limits, you will not be eligible to a pension at all.
How it works…
Centrelink apply the asset test and income test to determine how much pension you are entitled to.
The rate of pension that you will receive is based on which test provides the LOWER amount of pension.
For example:
Maria, a single homeowner and have $300,000 in assets and $1,000pf of income.
Asset tested rate of pension = $740.60pf
Income tested rate of pension = $459.10pf
*Maria’s rate of pension = $459.10pf (this is because the LOWER rate is used to determine your payment)
How much assets or income can I have before my pension payments reduce?
Firstly it depends on whether you are single or a couple, and secondly, whether you are classed as a homeowner or non-homeowner.
Centrelink has an asset/income free area (threshold) which allows you to have a certain amount of assets/income before you rate of pension reduces.
If both your assets and income are below the asset/income free areas you will be entitled to the maximum rate of pension.
If your assets or income exceeds the free areas (thresholds) but is below the cut off limits then you will be entitled to a part (reduced) rate of pension.
See tables below:
ASSET TEST
| Threshold | Cutoff limit | ||
|---|---|---|---|
| Single | Homeowner | $209,000 | $793,750 |
| Non-Homeowner | $360,500 | $945,250 | |
| Couple | Homeowner | $296,500 | $1,178,500 |
| Non-Homeowner | $448,000 | $1,330,000 |
INCOME TEST
| Threshold | Cutoff limit | |
|---|---|---|
| Single | $4,264pa | $49,873.20pa |
| Couple | $7,592pa | $76,356.80pa |
How much assets or income can I have before my pension payments cancel?
If you fail either one of the income or assets test you will not be entitled to a pension.
To fail either test your assets/income would need to exceed the cut off limits listed in the above tables.
If you are not eligible for a pension you may still be entitled to a concession card depending on your circumstances.
How can I calculate my rate of pension?
My Pension Manager has designed pension rate charts which are a guide to how the pension is calculated.
These are a handy tool so that you calculate how much pension you may be entitled to.
The latest rate charts can be accessed by signing up to our newsletter – we will also send you the updated rate charts every time they change.
What assets and income are counted towards my Centrelink assessment?
Most assets and income counts towards your assessment. There are some exceptions and unusual assessment criteria. See our article on the income and assets test.
What if my circumstances change?
As your circumstances change (your assets/income increases or reduces) then you may be entitled to more or less pension.
It is extremely important that you advise Centrelink of any changes to your circumstances so that you are paid the correct rate of payment.
If you need more help…
If you require further explanation of the assessment of pensions you can contact us for an appointment.
We can help explain everything and deal with Centrelink for you.
