The Centrelink age pension changes, which took effect on July 1, 2024, are now in full implementation. These adjustments are benefiting thousands of older Australians by enhancing financial flexibility and contributing to a better quality of life.
While the base pension rates have not increased, the updated income and asset test thresholds mean that many pensioners are now receiving higher payments. Furthermore, these changes have expanded eligibility, enabling more individuals to qualify for the age pension and allowing some to transition from part pensions to full pensions.
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Updated Qualification for the Age Pension
To qualify for the age pension, individuals must be 67 years old and pass income and asset tests. As of July 1, 2024, the thresholds for these tests were increased to reflect inflation. This allows individuals to retain more income and assets before impacting their pension payments.
Income Test Adjustments
The income test thresholds have been adjusted as follows:
- Single Pensioners: The income-free area, allowing pensioners to earn without affecting their payments, has increased from $204 to $212 per fortnight. Beyond this amount, the pension reduces by 50 cents for every dollar over the limit.
- Couple Pensioners: The combined income-free area has risen from $360 to $372 per fortnight for couples, with any income above this threshold leading to a reduction of 50 cents for every dollar over the limit.
The maximum income limits before pension payments cease have also been updated:
- 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
Changes to the asset test thresholds have also been implemented, allowing pensioners to possess higher asset values without affecting 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 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 as follows:
- Single Homeowners: Asset limit for part pensions is now $686,250 (up from $674,000).
- Single Non-Homeowners: Asset limit for part pensions is now $938,250 (up from $916,000).
- Couple Homeowners: Combined asset limit for part pensions has increased to $1,031,000 (up from $1,012,500).
- Couple Non-Homeowners: Combined asset limit for part pensions is now $1,283,000 (up from $1,254,500).
Deeming Rates and Thresholds
Deeming rates, which the government uses to estimate income from financial assets, remain frozen until June 30, 2025. However, thresholds for deeming have been indexed, allowing for 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).
Any amounts above these thresholds continue to be deemed to earn 2.25%.
Additional Adjustments
Other pension-related adjustments effective from July 1 include:
- Retirement Village and Granny Flat Residents: The extra 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 understand how these updated thresholds may affect their payments. For specific guidance and detailed advice, it is recommended to contact Centrelink or consult a financial advisor.
These changes to the Centrelink age pension are aimed at providing greater financial stability to older Australians, increasing the potential for higher payments, and enabling more individuals to qualify for or enhance their age pension benefits.
