Centrelink changes could give you a saving of up to $7,000pa – are you eligible?
From 1st July there have been changes introduced to means testing for Age Pension, Disability Support Pension and Carer Payment.
That means that current pensioners will have an automatic increase of their pension payments, while other retirees might become eligible for pension payment for the first time during their retirement.
Let’s discuss those changes and updates today, so you can see if you become eligible, or how much more you will receive from Centrelink going forward.
Before we jump into our today’s topic, I would like to make an announcement, especially to all the pre-retirees and retirees living in the area of our business location – eastern suburbs of Melbourne.
As you know our office is located in Boronia, which is right at the bottom of the beautiful Dandenongs. If you happen to live around this area, I would like to invite you to a very special event: “Ageing Well Expo”
This event consists of 3 special days of presentations:
- July 16th – Wednesday – this is when I will be presenting
- Aug 29th – Friday
- Oct 3rd – Friday – our practice will be participating on this day as well.
Each of those days the event will be held between 10.30am and 2.30pm
Those three events are events designed for our community to start the conversation on knowing how to position yourselves correctly to age well.
But also to educate the rest of us to know how to care for and support those around us to age well.
So we will talk about:
- how to set yourself up well to stay at home safely for as long as possible;
- how to position yourself financially in your twilight years;
- how to ensure your legal documents are in order;
- how to access services via My Aged Care
Our final Expo will be held during Senior’s Week to celebrate Ageing Well on Friday, October 3rd.
With live music, interactive discussion, and free food.
Come and join us if you are planning to age well, or if you are a friend, family or carer wanting to support someone to age well.
Register for each or all the events held at Discovery Church Mt Evelyn (89 Monbulk Rd Mt Evelyn)
Register via this link https://forms.gle/x2EpVDY1ZoL2V1d99
or by calling 03 9736 2323 during reception hours (Monday – Wednesday 10am – 3pm)
I will be one of the presenters next Wednesday and we will also participate in the event held in October.
So if retirement is on your agenda and you, like most other people find the change confusing and unsettled, please sign up as my guest to this event. It is free, and I am sure it will be very informative.
As I mentioned before, due to the increase of the thresholds in Income and Assets Tests, current pensioners will see an automatic increase of their pension payments, while others might be eligible for the first time.
But what that also means is that for those who will be eligible for the first time, you will also have access to the ever important Pensioner Concession card, which could provide the benefit of up to $7,000pa in different forms of savings, depending on which state you live in.
From 1st July this year, your income free area is $218 per fortnight, an increase from the previous level of $212.
However, remember that any dollar earned above this income free threshold, will reduce your pension payment by 50c, until you hit the new upper limit of $2,516 per fortnight.
So in reality it means that if you earn fortnightly $300, the first $218 is your income free area, and the balance of $82, will reduce your pension by 50c for each dollar, therefore it means a reduction by $41 per fortnight.
For couples the new combined income free area will increase to $380 per fortnight, this is the increase by $8, up to the upper cut-off limit of $3,844.40
Therefore, for singles, your pension payments will be cut off if your income exceeds $65,416pa
And for couple that cut off is if your combined income is greater than $99,954.40pa, so just shy of $100K.
Please remember though that we are not talking about your real income earned, but calculations are based on assessable income under the Income Test rules.
But if you are a recipient of the Age Pension or a Carer Payment and let’s say you are working part-time, your employment income will also receive an additional exemption of $300 per fortnight. Therefore, if you earn $400pf, Centrelink will only count $100, as the first $300 will be exempt as your work bonus.
Therefore, a pensioner with a part-time job, could earn up to $518 pf before Age Pension is being reduced.
Here is the table of pension payments from 1st July 2025
Let’s jump to the deeming rates. I think lots of people are still confused about the idea of deemed income. If this is you, please watch my video, “Age Pension Deeming Rates – Unfair rules” which explains basis of the deeming rules and which assets are subject to deeming rates and which are not.
Keep in mind that the assets thresholds have changed and have increased since that video, and this is exactly what I am updating in today’s video.
For now, we were taking about the Income Test, but the test that impacts most retirees is the Assets Test, so you really need to know the lower and the upper limits to know where you stand and if you have any chance of receiving even a single dollar from Age Pension people.
So let’s look at the table:
Please remember that your family home is fully exempt from the assets test providing it is only used for private purposes and is on the land smaller than 2hectares.
Talking about your home, if you think your home is always exempt from the Assets Test, you might be surprised to find out that it is not the case. I strongly recommend watching this video: “Is my home always exempt for Age Pension” I think this might be a bit of a shock for you.
For singles the lower asset test limit is being increased to $321,500 from $314,999 and for couples from $470,000 to $481,500.
The upper cut-off limit for homeowners increases from $697,000 to $704,500 and for couples increases to $1,059,000.
Bottom line what that means is that based on the asset test and due to that increase, the fortnightly pension will increase by $22.50 for singles and $34.50 for couples.
One think that most people are not aware of, is the fact that if you become eligible for $1.00 of the pension, as a single you will receive $59.10 and a member of a couple $44.50 providing you are a resident of Australia.
This is because your pension payment is reduced by means testing, but you also become eligible for supplements to cover the costs of communication, prescriptions and energy. Supplements are not subject to means testing; therefore you will receive the full supplement payments, regardless of how much pension payment you are being paid.
And of course, with that $1.00 Age Pension comes the amazing Pensioner Concession Card, that is used correctly can provide savings of up to $7,000 each year.
Therefore my advice is, if you are very close to the upper Asset Test threshold, of just below it, when your entitlement is so very small, please book an appointment with a financial planner from About Retirement and we will see, how we could maximise that Age Pension payment and overall how to improve your cash flow and your level of income.
Non homeowners both singles and couples, are allowed an extra $258,000 in assets before their pension starts to reduce under the asset test.
Please contact us if you are not receiving any Age Pension of if your pension payments are very low. Maybe we can change that.
And please feel free to sign up to the “Ageing Well expo” Looking forward to seeing you there.
By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement
