The Centrelink age pension changes that came into effect on July 1, 2024, are now fully operational, providing significant benefits to older Australians. While the base pension amount has remained the same, the revised income and asset test thresholds mean that many pensioners are now eligible for higher payments. Additionally, more individuals can qualify for the age pension, with some transitioning from part pensions to full pensions due to these adjustments.
Key Changes to the Centrelink Age Pension
Updated Age Pension Qualification
To qualify for the Centrelink age pension, individuals must be at least 67 years old and pass both the income and asset tests. As of July 1, 2024, these thresholds were raised to account for inflation, allowing pensioners to keep more of their income and assets without reducing their pension payments.
Income Test Adjustments
The income test thresholds have been increased, benefiting many pensioners:
- Single Pensioners: The income-free area has increased from $204 to $212 per fortnight. For any income exceeding this amount, the pension is reduced by 50 cents for every dollar earned above the threshold.
- Couple Pensioners: The combined income-free area for couples has been raised from $360 to $372 per fortnight, with the same reduction of 50 cents for every dollar over the limit.
The new maximum income limits before pension payments are reduced or stopped are as follows:
- Single Pensioners: The limit has risen from $2,436.60 to $2,444.60 per fortnight.
- Couple Pensioners: The combined limit for couples has increased from $3,725.60 to $3,737.60 per fortnight.
Changes to the Asset Test
The asset test thresholds have also been adjusted, allowing pensioners to keep more assets without affecting their pension payments.
- Homeowners:
- Single Pensioners: The asset limit for the full pension has risen to $314,000 (up from $301,750).
- Couple Pensioners: The combined asset limit for couples is now $470,000 (up from $451,500).
- Non-Homeowners:
- Single Pensioners: The asset limit for full pension eligibility has increased to $566,000 (up from $543,750).
- Couple Pensioners: The combined asset limit for non-homeowners is now $722,000 (up from $693,500).
For individuals receiving part pensions, the updated asset limits are as follows:
- Single Homeowners: The asset limit for part pensions has increased to $686,250 (up from $674,000).
- Single Non-Homeowners: The asset limit for part pensions is now $938,250 (up from $916,000).
- Couple Homeowners: The combined asset limit for part pensions has risen to $1,031,000 (up from $1,012,500).
- Couple Non-Homeowners: The combined asset limit for part pensions has increased to $1,283,000 (up from $1,254,500).
Deeming Rates and Thresholds
Deeming rates, used to estimate income from financial assets, remain unchanged until June 30, 2025. However, the asset thresholds for deeming have been indexed, allowing pensioners to have higher amounts of assets deemed at a lower rate:
- Single Pensioners: The first $62,600 of financial assets is now 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).
Assets above these thresholds will continue to be deemed at the higher rate of 2.25%.
Additional Adjustments
Several other adjustments to the age pension system took effect on July 1, 2024:
- Retirement Village and Granny Flat Residents: The 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 limit for these trusts is now $813,250 (up from $781,250).
- Exempt Funeral Investments: 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 current financial situations to see how the updated thresholds may affect their eligibility or payment amounts. For personalized advice and assistance, it’s advisable to contact Centrelink or consult with a financial advisor.
Conclusion
The changes to the Centrelink age pension system are designed to offer greater financial stability for older Australians. These updates to income and asset test thresholds ensure that more people qualify for the pension, and those already receiving it may see higher payments. These adjustments aim to support pensioners in managing rising costs and improving their quality of life during retirement.