The recent Centrelink age pension changes, effective from July 1, 2024, are transforming the financial landscape for older Australians. These reforms aim to improve financial flexibility, enhance payment structures, and expand eligibility, ultimately offering thousands of pensioners a better quality of life.
Although base pension rates remain unchanged, adjustments to income and asset test thresholds mean higher payments for many pensioners. Additionally, these changes have widened the pool of eligible individuals, enabling some to transition from part pensions to full pensions.
Updated Age Pension Eligibility Criteria
To qualify for the age pension, individuals must meet specific criteria:
- Be 67 years or older.
- Pass income and asset tests.
The thresholds for these tests were updated to align with inflation on July 1, 2024. This allows pensioners to retain more income and assets without impacting their payments.
Income Test Updates
The income test thresholds were adjusted to offer more flexibility:
| Category | Previous Income-Free Area | New Income-Free Area | Reduction Rate |
|---|---|---|---|
| Single Pensioners | $204 per fortnight | $212 per fortnight | 50 cents per $1 |
| Couple Pensioners (combined) | $360 per fortnight | $372 per fortnight | 50 cents per $1 |
Maximum Income Limits
The upper income limits before payments cease have also been updated:
- Single Pensioners: Increased from $2,436.60 to $2,444.60 per fortnight.
- Couple Pensioners (combined): Increased from $3,725.60 to $3,737.60 per fortnight.
Asset Test Adjustments
Revised asset test thresholds enable pensioners to own more assets without impacting their payments.
For Homeowners
| Category | Previous Asset Limit (Full Pension) | New Asset Limit (Full Pension) |
|---|---|---|
| Single Pensioners | $301,750 | $314,000 |
| Couple Pensioners (combined) | $451,500 | $470,000 |
For Non-Homeowners
| Category | Previous Asset Limit (Full Pension) | New Asset Limit (Full Pension) |
|---|---|---|
| Single Pensioners | $543,750 | $566,000 |
| Couple Pensioners (combined) | $693,500 | $722,000 |
For Part Pensions
| Category | Previous Asset Limit | New Asset Limit |
|---|---|---|
| Single Homeowners | $674,000 | $686,250 |
| Single Non-Homeowners | $916,000 | $938,250 |
| Couple Homeowners (combined) | $1,012,500 | $1,031,000 |
| Couple Non-Homeowners (combined) | $1,254,500 | $1,283,000 |
Deeming Rates and Indexed Thresholds
Deeming rates remain frozen until June 30, 2025, but thresholds have been indexed to account for inflation.
| Category | Previous Threshold | New Threshold | Deeming Rates |
|---|---|---|---|
| Single Pensioners | $60,400 | $62,600 | 0.25% on initial amount |
| Couple Pensioners (combined) | $100,200 | $103,800 | 0.25% on initial amount |
| Above Thresholds | – | – | 2.25% |
Additional Updates
Further changes effective from July 1, 2024, include:
- Retirement Village/Granny Flat Residents: The additional allowable amount for non-homeowners has risen to $252,000 (up from $242,000).
- Special Disability Trusts: The concessional asset value limit is now $813,250 (up from $781,250).
- Exempt Funeral Investments: The exempt threshold has increased to $15,500 (up from $15,000).
Reviewing Your Pension Eligibility
Older Australians are encouraged to review their financial situations in light of these updates. Adjustments to thresholds could lead to higher payments or new eligibility for some. For personalized advice, contacting Centrelink or consulting a financial advisor is recommended.
FAQs
What are the new income-free areas for pensioners?
Single pensioners can now earn up to $212 per fortnight, while couples have a combined limit of $372 per fortnight before payments are reduced.
How have asset thresholds changed for homeowners?
Single homeowners can now hold assets up to $314,000 for full pensions, and couples can have combined assets of up to $470,000.
What are deeming rates, and how do they affect pension calculations?
Deeming rates estimate income from financial assets. Currently, the first $62,600 for singles and $103,800 for couples is deemed to earn 0.25%, with amounts above earning 2.25%.
