There are changes to the asset test used to calculate pensions from 1 January, 2017.
These changes are designed to reduce the pension payable to pensioners with substantial assets and redistribute the pension to pensioners with minimal assets.
The pensions that are affected include:
- Age pension
- Carer payment
- Disability Support Pension
- Widow B Pension
- Wife Pension
Please note that the following is for information purposes only, because we have been asked by numerous clients. We suggest you contact your financial planner for more detail or contact us and we can refer you to one who can assist you.
The assets test free area is increasing. This is the threshold for pensioners with minimal assets. If your assets are below the following amounts you may qualify for the full pension:
- $250,000 for a single homeowner (up from $209,000)
- $375,000 for a homeowner couple (up from $296,500)
- $450,000 for a single non-homeowner (up from $360,500)
- $575,000 for a non-homeowner couple (up from $448,000)
The family home is still exempt from the assets test.
Pension payments start reducing when assets are more than these amounts. Previously the pension reduced by $1.50 for each $1,000.00 of assets above these thresholds. From 1 January, 2017 the reduction is $3.00 for each $1,000.00 of assets above these thresholds. This reduced pension is referred to as a part pension.
These part pensions are now cancelled from 1 January, 2017 when assets exceed:
- $542,500 for a single homeowner (down from $793,750)
- $816,000 for a homeowner couple (down from $1,178,500)
- $742,500 for a single non-homeowner (down from $945,250)
- $1,016,000 for a non-homeowner couple (down from $1,330,000)
Feel free to contact us if you wish to discuss.
Kreston Stanley Williamson Team
*Correct as of January 2017
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.