The changes coming to the Age Pension on 1 July

Some older Australians receiving the Age Pension can expect a boost in their payments as significant increases in Centrelink eligibility thresholds come into effect in the new financial year.

Thousands of people are likely to qualify for an Age Pension for the first time, and those already on a part Pension could see some sizeable increases in the rate of Pension payable – in some cases, as much as $2,223 a year.

The increases come courtesy of 1 July indexation of Centrelink means-test thresholds which continue to benefit from Australia’s high rate of inflation.

Pensioners already receiving a full Age Pension will not see any change.

Under the means testing system, Pension eligibility is tested against income and assets, and whichever test produces the lowest pension Payable is the one used.

The income test from 1 July

Centrelink-assessable income which exceeds $212 a fortnight for singles will see the full Pension of $1116.30 a fortnight reduced at the rate of 50¢ per $1 over the limit until it is cancelled altogether when income exceeds $2444.60 a fortnight. This is an $8-a-fortnight increase from the current income-free area of $204.

For couples, the new combined income-free area of $372 is a $12 increase on the current level of $360. The full couple’s Pension of $841.40 each a fortnight will cut out when combined income exceeds $3,737.60.

Pensioners who continue working will also have an additional $300 a fortnight added to their income-free area before the Pension starts to get clipped. In the case of couples, each Pensioner can access the extra $300 but you cannot share it with your partner.

The asset test from 1 July

For a single homeowner from 1 July, once Centrelink-assessable assets exceed $314,000 the full Age Pension starts to be reduced at the rate of $3 a fortnight for every $1,000 over that limit. The Pension gets cancelled altogether once assets exceed $686,250. This is an overall increase in the asset test threshold of $12,250.

For homeowning couples, an overall increase of $18,500 means the new lower limit will be $470,000 but the upper cut-off limit will be $1.031 million. Remember, your home – no matter how much it is worth – is exempt from the asset test.

This information is for educational purposes only and does not constitute financial advice. Consult a professional for personalized recommendations.

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A special thanks to our contributors

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Caroline Egan

DCM Media, agedcare101

Caroline has a wealth of experience writing within the retirement and aged care sector and is a contributing journalist for the Villages.com.au and agedcare101 blog and accompanying newsletters.

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Ian Horswill

Journalist

Ian is a journalist, writer and sub-editor for the aged care sector, working at The DCM Group. He writes for The Weekly Source, agedcare101, villages.com.au and the DCM Institute fortnightly newsletter Friday. Ian is in daily contact with CEOs of retirement living, land lease and the aged care operations and makes a new contact every week. He investigates media releases, LinkedIn and Facebook for a good source for ideas for stories.

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Lauren Broomham

Retirement and Aged Care Journalist

Lauren is a journalist for villages.com.au, agedcare101 and The Donaldson Sisters. Growing up in a big family in small town communities, she has always had a love for the written word, joining her local library at the age of six months. With over eight years' experience in writing and editing, she is a keen follower of news and current affairs with a nose for a good story.

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Jill Donaldson

Physiotherapist

Jill has been practicing as a clinical physiotherapist for 30 years. For the last 13 years she has worked solely in the Aged Care sector in more than 50 metropolitan and regional facilities. Jill has also toured care facilities in the US and Africa and is a passionate advocate for both the residents in aged care and the staff who care for them. She researches and writes for DCM Media.

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Chris Baynes

DCM Media, agedcare101

Chris has been a journalist and publisher in the retirement village and aged care sectors for 11 years. He has visited over 250 retirement villages and 50 aged care facilities both within Australia and internationally. Chris is a regular speaker at industry conferences plus is a frequent radio commentator.

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Annie Donaldson

Nurse and Carer

Annie has a long career in both nursing and the media. She has planned and co-ordinated the medical support from both international TV productions and major stadium events. In recent years she has been a primary family carer plus involved in structured carer support.