Did you know that on 1st January 2017, the pension assets test used to calculate pensions will change? The following is a short guide to help you be prepared.
The assets test thresholds and cut out limits will be altered. If you receive any of the following pensions, these changes may affect you:
• The Age Pension
• Disability Support Pension
• Wife Pension
• Carer Payment
• Widow B Pension
New asset limits
The assets test free area is increasing. Your assets donít affect your payment if they fall below the assets test free area.
• $250,000 for a single homeowner
• $375,000 for a homeowner couple
• $450,000 for a single non-homeowner
• $575,000 for a non-homeowner couple
Note: The family home is still exempt from the assets test.
Asset limits for allowances
Asset limits for allowances will also increase and there will be no reduction or cancellation of allowances as a result of this.
Assets over the assets test free area – The taper rate
At the moment, for every $1,000 of assets you own over the assets test free area, your pension is reduced fortnightly by $1.50.
From 1st January 2017, for every $1,000 of assets you own over the asset free area, your pension will reduce fortnightly by $3.00.
Pension Bonus Scheme – When to claim
If registered for the Pension Bonus Scheme, your bonus depends on the rate of Age Pension youíll receive when you claim it.
With the changes coming through on 1st January, this rate may be different before and after the date. Keep this in mind if you have the flexibility of when to claim.
Aged care fees
For those in Aged Care, the change may also affect your government subsidised aged care fees. This is because your income, including your pension, affects your fees.
If your pension is reduced or cancelled or if your aged care fees change, written communication will be sent from the Australian Department of Human Services.
Assets test estimator
For further information on how the assets test changes may impact your pension and to use the online estimator, visit the Australian Department of Human Services dedicated page: www.humanservices.gov.au/customer/enablers/changes-pension-assets-test
• National Seniors Australia: http://www.nationalseniors.com.au
• Australian Department of Human Services www.humanservices.gov.au/customer/enablers/changes-pension-assets-test