Changes to the Aged Care Pension Test
Did you know there are important changes the Government has introduced to the pension assets test, which may affect your eligibility for the Age Pension. These changes are now law and will come into effect on 1 January 2017.
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From 1 January 2017, people with lower levels of assets could see an increase to their entitlement and those with higher levels of assets could see a significant reduction or complete loss of their age pension entitlement. We are here to help you assess the impact these changes may have on your financial situation, please call us on 08 72262119.
Q&As - Changes to the Pension Assets Test
What is the Age Pension assets test?
The Age Pension assets test is a means-based test, which helps Centrelink determine your eligibility for the age pension and other social security payments, and generally applies to assets that you hold outside the family home. If you have assets over the lower threshold, your entitlement to the Age Pension will reduce. Under the current rules, the asset test reduces your rate of Age Pension by $1.50 per fortnight for every $1,000 over the threshold.
What are the changes to the Age Pension assets test?
Under the new rules that will apply from 1 January 2017:
- The lower threshold is increasing
- The rate at which your Age Pension reduces if your assets exceed the lower threshold is increasing to $3 per fortnight for every $1,000 over the threshold. This has the effect of reducing the cut-off limit where an Age Pension is no longer payable.
What are the new asset thresholds?
The table below provides a summary of the current and new Age Pension asset test thresholds. Please note that the lower thresholds have increased and the cut-off thresholds where you are not entitled to an Age Pension have lowered.
What happens if I lose entitlement to the Age Pension?
If your Age Pension is no longer payable as a result of the changes to the asset test on 1 January 2017, you will automatically be eligible for the Commonwealth Seniors Health Card which provides a range of benefits, such as discounts on certain pharmaceuticals.
This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. Information in this document is based on current regulatory requirements and laws, as at 29 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Roe Financial, its related entities, agents and employees for any loss arising from reliance on this document.