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Age Pension changes

Age Pension changes

Big change has arrived thumb
Did you know that despite the growth of the superannuation system in Australia, 39% of retirees rely on full Age Pension and 24% receive part Age Pension?  

If you need to understand this complicated pension system in Australia my suggestion is to start with a full understanding of the system – Age Pension Explained 

Then view the Truth About Asset Test & Age Pension Income Test Madness.  

The next topic to understand is Age Pension Deeming Rates and then you can continue with other articles and videos on my website that explain different topics of Age Pension.  

Alternatively, you can watch on the YouTube Channel the whole series of videos dedicated to Age Pension starting with the most popular 9 ways to legally hide money from Centrelink Age Pension  

And today we have some good news for all pensioners, as you have just received your pension pay-rise in March 2022.  

 ”Don’t let money run your life, let money help you run your life better.” 

John Rampton  

On 20 March 2022 the maximum full Age Pension was increased by $20.10 per fortnight for a single person, and $15.10 per person per fortnight for a couple, therefore the total increase of $30.20pf for a couple. 

The rates for a full Age Pension for Australian residents for the period 20 March 2022 to 19 September 2022 are as follows: 

  • Single: $987.60 per fortnight (approximately $25,678 per year, an increase by $523.00pa) 
  • Couple (each): $744.40 per fortnight (approximately $19,354 per year, increase of $392.60pa) 
  • Couple (combined): $1,488.80 per fortnight (approximately $38,709 per year, annual increase of $785.20) 
  • Couples separated due to illness each receive the Single rate (see above), which combined is $1,975.20 (approximately $51,355 per year, annual increase by $1,046) 

Note: Annual amounts are approximate. The figures above include the pension and energy supplements. 

The other day I was buying a full tank of petrol to my car, with the diesel prices of $2.20 per litter, and I’ve just realised that the annual Age Pension increase for a single person, of $523.00 would buy 4 tanks of petrol. Well, I leave the rest to your personal conclusion.  

Let’s remind ourselves then, what are limits of assets that you can have to be eligible for full Age Pension. 

To receive the full Age Pension, your total assets (usually excluding your family home) cannot exceed the following asset thresholds: 

Age Pension changes
Just as a reminder, if your total assets value is greater than those limits, then your Age Pension is being reduced by $3.00pf for every $1,000 over the limit. This is why Assets Test is the one that reduces Age Pension eligibility or prohibits access to Age Pension altogether for most retirees.  

And now, let’s see when your Age Pension cuts out completely: 

Age Pension changes

Age Pension Assets Test limits are updated annually at the beginning of each financial year, therefore those figures will remain current until 30th June 2022 

To fully understand how the Asset Test works and how Age Pension reduction is being calculated, just watch that video I mentioned before: the Truth About Asset Test 

And now let’s have a look at Income Test.  

You are eligible for full Age Pension if your income is up to those limits:

Age Pension changes

If you earn more than those limits, then your Age Pension is reducing by 50c for every $1.00 over those listed thresholds.  

So let’s review how much you can earn as maximum before your Age Pension is cuts out completely:  

 

Age Pension changes
As you can see, Income Test is quite generous. For example:  

  • A single pensioner earning approx. $45,000 from own sources can still receive Age Pension of approx. $200pf.  
  • A couple earning $70,000pa is still eligible for approx. $275pf. 

There are some ways how we can deal with having too much assets and I have been talking about those tips and strategies in many of my videos. So keep on watching and learning, but if you find it confusing or just simply want to have the best and safest outcome, get the full advice and contact me directly. 

“Retirement is a Journey not a Destination, so be well prepared for the Ride”

By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement

 

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