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Pension and the Assets Test

Houses side by side

The basic rule for receiving an age or service pension is to ensure it goes to those people who need it. To determine how much each person is paid, pension recipients are subject to means testing on income and assets.

Two tests are applied and the one paying the lowest age pension is the one that is used. Many retirees pass the income test but fail the tougher assets test. This means they get a reduced pension or no pension at all.

This is how it works

To illustrate how the assets test applies let's look at Tom, Dick and Harry. They are all single homeowners and qualify for the age pension based on their age and income. For simplicity the income test is ignored in this example.

Tom has assets of $150,000. He can have assets of $258,500 so he gets the full age pension of $916.30 per fortnight (including pension supplements).

Dick has assets of $280,000. He is over the assets test threshold for a single homeowner. Centrelink holds details of his assets and income and has been able to recalculate his age pension automatically. His age pension is reduced by $3.00 per fortnight for each $1,000 over $258,500 ($3.00 x 21.50 = $64.50). Therefore his age pension will be $851.80 per fortnight.

Harry has assets of $400,000. Using the assets test rules he too can receive a partial age pension as he is able to have assets of up to $564,000. Harry can receive up to $424.30 a fortnight based on the assets test.

The effects of assets

Take care when you add up your assets. Some assets (like your home you live in) are not counted. Other assets (such as private pensions and funeral bonds) may be treated concessionally. Your lifestyle assets (such as cars and home contents) are assessed at their ‘fire sale’ value.

The level of assets where the age pension cuts out under the assets test increases on 20 March and 20 September each year when the age pension is indexed. The assets test threshold is also indexed each year on 1 July.

Different assets test limits apply to couples and non-homeowners, so it can be quite confusing. The best idea is to talk to us to ensure you are receiving the correct payments.


Australian Government Human Services website


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