CentreLink Publications
Retirement
Age Pension Payments
Pension Supplement
About to retire or in retirement?
Changes to the definition of income could affect your payment
Deeming
The Act:
Social Security Act 1991 Vol 1
Social Security Act 1991 Vol 2
Social Security Act 1991 Vol 3
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What's a Hybrid?
Pensions and income and assets tests
(as at 20 March 2012)
Disclaimer:
We have prepared this overview as we were utterly confused and frustrated wading through the muddle of the CentreLink website.
We combined the most relevant information on one page.
As always, if any information is outdated, confusing or plain wrong, please let us know.
Disclaimer:
This is not a legal document and although we have taken great care in compiling the details,
we cannot take any responsibility for its accuracy, completeness and currency.
Check with the relevant CentreLink web site or offices.
Pensions
Income Test
- What is income, for the purpose of the pension?
- Income test for pensions
- Income test for pensioners - transitional rules
- Income test for DSP (Disability Support Pension) under 21
Assets Test
- What is an Asset, for the purpose of the pension?
- Chart A - Assets test for homeowners
- Transitional homeowner
- Assets test for DSP under 21 - homeowners
- Chart B - Assets test for non-homeowners
- Transitional non-homeowner
- Asset test for DSP under 21 - non-homeowners
Deeming
Retirement village and granny flat residents
What is the retirement age?
The current retirement age is:
For Women - 60
For Men - 65
The Rudd Government introduced changes to the qualifying age for age pension, increasing it for both men and women by 6 months every 2 years starting from 1 July 2017.
At 1 July 2023, the qualifying age will reach 67.
Women born before 1 July 1935 and men born before 1 July 1953 will not be affected.
Both men and women born after 1 January 1957 will have a qualifying age for Age Pension of 67.
Women born after 1/7/1935 but before 1/1/1957 will have a qualifying age gradually increasing by 6 months for every 2 years born after 1/7/1935 from 60 to 67.
Men born after 1/7/1953 but before 1/1/1957 will have a qualifying age gradually increasing by 6 months for every 2 years born after 1/7/1953 from 65 to 67.
Income test for pensions
This income test is effective from 20 March 2012.
This information applies to the following payments:
- Age Pension
- Disability Support Pension
- Wife Pension
- Widow B Pension
- Bereavement Allowance
- Carer Payment (caring for a person 16 years or over)
- Carer Payment (caring for a child under 16 years)
- Pension Bonus Bereavement Payment
This income test does not apply if you receive Parenting Payment Single - refer to income and assets test for Parenting Payment.
Note: You are exempt from this income test if you are permanently blind and you get Age Pension or Disability Support Pension.
As of 1 July 2009, changes to the definition of income mean that your assessable income for Centrelink will also include reportable superannuation contributions.
You may need to provide additional information about your income to Centrelink or the Family Assistance Office.
What is income, for the purpose of the pension?
Income includes money from employment, pensions/annuities and money ‘deemed’ to be earned from investments.
Periodical payment or benefit you receive as a gift or allowance
It also includes money from outside Australia.
If you have income above certain limits, the amount of pension you are paid may be reduced.
Income may include:
- deemed income from financial assets
- gross income from earnings, including fringe benefits and salary sacrifice
- net income from a business, including farms
- private trust distributions or dividends from private companies
- net income from real estate, including rental of holiday homes and timeshares
- income from boarders and lodgers
- superannuation and pensions paid by other countries
- income from income stream products, such as annuities and allocated pensions
- money from sources outside Australia
- your share of the net profits, if you control or partly control a private trust or private company
- income from a life interest
- Just recently: solar energy rebates. The Net income is considered to be a "non-remunerative lump sum"
We are still waiting for the department on whether the interest on loans for this could be offset.
Income test for pensions†
AS at 20 March 2012| If you are | Subject to the assets test, You may qualify for Full pension/allowance If you earn (per fortnight)* |
Subject to the assets test, You may qualify for part pension If you earn (per fortnight)# |
| Single | up to 150.00 | less than 1,661.00 |
| Partnered (combined) | up to 264.00 | less than 2,542.00 |
| A couple but separated due to illness(combined assets) | up to 264.00 | less than 3,286.00 |
* Income over these amounts reduces your rate of pension by 50 cents in the dollar (for singles), or 25 cents in the dollar each (for couples).
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
Income test for pensioners - Transitional rules
The notional maximum pension for transitional-rate-pensioners is $672.20 per fortnight for a single pensioner and $1,084.00 per fortnight combined for pensioner couples. This rate excludes Rent Assistance.
| If you are | For full pension/allowance (per fortnight)* | For part pension (per fortnight)# |
| single | up to 150.00* | less than 1,828.00* |
| partnered (combined) | up to 264.00* | less than 2,974.00* |
| a couple but separated due to illness (combined assets) | up to 264.00* | less than 3,620.00* |
| *Allowable income is increased by up to $24.60 per fortnight for each dependant child. | ||
* Income over these amounts reduces your rate of pension by 40 cents in the dollar (single), or 20 cents in the dollar each (for couples).
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
Asset and income limits for transitional rate and saved case customers apply to customers who are resident in Australia or
are not absent for more than 13 weeks only. For other cases, contact Centrelink for more information.
Income test for DSP (Disability Support Pension) under 21
| If you are | For full pension/allowance (per fortnight)* | For part pension (per fortnight)# |
| i)DSP under 21 single - no children - no affecting income as at 19 September 2009 OR claimed on or after 20 September 2009 | ||
16–17 years |
up to 150.00* |
less than 831.20 # |
18–20 years |
up to 150.00* |
less than 920.40 # |
16–20 years independent |
up to 150.00* |
less than 1,195.80 # |
| ii)DSP under 21 single - no children - and with affecting income as at 19 September 2009 (saved status applies) | ||
16–17 years |
up to 150.00* |
less than 1,001.50 # |
18–20 years |
up to 150.00* |
less than 1,113.00 # |
16–20 years independent |
up to 150.00* |
less than 1,457.25 |
| iii)DSP under 21 partnered - no children | ||
partnered (combined)†† |
up to264.00* |
less than 2,522.00 # |
| iv)DSP under 21 partnered - no children - and with affecting income as at 19 September 2009 (saved status applies) | ||
partnered (combined) |
up to 264.00* |
less than 2,863.00 # |
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
† This income test does not apply if you receive Parenting Payment Single - refer to Parenting Payment for more information.
* Income over these amounts reduces your rate of pension by 50 cents in the dollar (single), or 25 cents in the dollar each (for couples).
For transitional or saved cases, income over these amounts reduces your rate of pension by 40 cents in the dollar (single), or 20 cents in the dollar each (for couples).
# These figures may be higher if you also get Rent Assistance with your payment.
Asset and income limits for transitional rate and saved case customers apply to customers who are resident in Australia or
are not absent for more than 13 weeks only. For other cases, contact Centrelink for more information.
†† These figures are NOT on the current (20 March 2012) Centrelink Website.
It may just be an oversight.
Based on the other increases, we have calculated what we estimate the new figures should be.
Check with Centrelink.
How much is the pension?
These Age Pension payment rates are effective from 20 March 2012. (Note, both the income and assets test have also been adjusted)| If you are | The maximum fortnightly payment is |
|---|---|
| Single | $695.30 |
| A couple | $524.10 each or $1048.20 combined |
Note:These amounts exclude the Pension Supplement amount which is currently a maximum of $60.20 per fortnight for singles and $90.80 per fortnight for couples (combined).
Note: Some assets are deemed to earn income, while certain assets are not included in the assets test. Contact Centrelink for more information.
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower pension rate (or nil rate) will apply.
Assets Test
What is an Asset?
An asset is any property or possession you own either partly or wholly. It includes assets held outside Australia and debts owing to you.
Most assets are assessable and are taken into account when calculating your Australian Government income support payments.
The value of your assets is what you would get for them if you sold them.
Generally, any debt secured against an asset is deducted from the value of that asset.
Assets that are assessed under the assets test
Assets assessed under the assets test - assessable assets - include:
- any cash or money you have in bank, building society or credit union accounts (including interest free accounts),
interest bearing deposits, fixed deposits, bonds, debentures, shares, property trusts, friendly society bonds and managed investments - any assets you hold in superannuation and rollover funds if you are of Age Pension [1] age
- the value of any real estate, including holiday homes, you own (this does not include your principal home)
- the value of any businesses and farms, including goodwill (where goodwill is shown on the balance sheet)
- the surrender value of life insurance policies
- the value of gifts worth more than $10,000 in a single year or more than $30,000 in a 5 year period
- the value of any loans (including interest free loans) you have made to family trusts, members of the family, organisations, and so on
- the value of any motor vehicles you own
- the value of any boats and caravans you own which you do not use as a home
- the value of your household contents and personal effects
- the value of any collections you have for trading, investment or hobby purposes
- the value of your entry contribution to a retirement village if it is less than the difference between the homeowners' and non-homeowners' assets limits [2]
- some income streams [3] products
- the attributed value of a private trust or private company where you are a controller of that trust or company
- the value of a life interest created by you or your partner, or upon the death of your partner.
Chart A - Assets test for homeowners (Your principal family home is excluded from the assets test)
Assets test for homeowners
| If you are | For full pension/allowance* | For part pension# |
|---|---|---|
| single** | up to $186,750 | less than $686,000 |
| partnered (combined) | up to $265,000 | less than $1,018,000 |
| a couple but separated due to illness (combined assets) | up to $265,000 | less than $1,263,500 |
| one partner eligible | up to $265,000 | less than $1,018,000 |
* Assets over these amounts reduce your pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined).
Newstart Allowance/Widow Allowance/Partner Allowance/Sickness Allowance/Special Benefit/Parenting Payment/Youth Allowance/ABSTUDY and Austudy payments are not payable if assets exceed these amounts. See CentreLink website.
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower pension rate (or nil rate) will apply.
Transitional homeowner
| If you are | For full pension/allowance* | For part pension# |
|---|---|---|
| single | $186,750 | less than $690,500 |
| partnered (combined) | $265,000 | less than $988,000 |
| a couple but separated due to illness (combined assets) | $265,000 | less than $1,160,000 |
| one partner eligible | $265,000 | less than $988,000 |
* Assets over these amounts reduce your pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined).
Newstart Allowance/Widow Allowance/Partner Allowance/Sickness Allowance/Special Benefit/Parenting Payment/Youth Allowance/ABSTUDY and Austudy payments are not payable if assets exceed these amounts. see CentreLink website.
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
Asset and income limits for transitional rate and saved case customers apply to customers who are resident in Australia or
are not absent for more than 13 weeks only. For other cases, contact Centrelink for more information.
Assets test for DSP under 21 - homeowners
| If you are | For full pension/allowance* | For part pension# |
|---|---|---|
| i)DSP under 21 single - not independent | ||
| 16–17 years | $186,750 | less than $414,000 |
| 18–20 years | $186,750 | less than $443,750 |
| ii)DSP under 21 single-independent | ||
| $186,750 | less than $535,500 | |
| iii)DSP under 21 partnered | ||
| $265,000 | less than $958,500 | |
* Assets over these amounts reduce your pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined).
Newstart Allowance/Widow Allowance/Partner Allowance/Sickness Allowance/Special Benefit/Parenting Payment/Youth Allowance/ABSTUDY and Austudy payments are not payable if assets exceed these amounts. see CentreLink website.
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
Chart B - Assets test for non-homeowners
Assets test for non-homeowners
| If you are | For full pension/allowance* | For part pension# |
|---|---|---|
| single** | up to $321,750 | less than $821,000 |
| partnered (combined) | up to $400,000 | less than $1,153,000 |
| a couple but separated due to illness (combined assets) | up to $400,000 | less than $1,398,500 |
| one partner eligible (combined assets) | up to $400,000 | less than $1,153,000 |
* Assets over these amounts reduce your pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined).
Newstart Allowance/Widow Allowance/Partner Allowance/Sickness Allowance/Special Benefit/Parenting Payment/Youth Allowance/ABSTUDY and Austudy payments are not payable if assets exceed these amounts. see CentreLink website.
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
Transitional non-homeowner
| If you are | For full pension/allowance* | For part pension# |
|---|---|---|
| single | $321,750 | less than $769,250 |
| partnered (combined) | $400,000 | less than $1,123,000 |
| a couple but separated due to illness (combined assets) | $400,000 | less than $1,295,000 |
| one partner eligible (combined assets) | $400,000 | less than $1,123,000 |
* Assets over these amounts reduce your pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined).
Newstart Allowance/Widow Allowance/Partner Allowance/Sickness Allowance/Special Benefit/Parenting Payment/Youth Allowance/ABSTUDY and Austudy payments are not payable if assets exceed these amounts. see CentreLink website.
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
Asset and income limits for transitional rate and saved case customers apply to customers who are resident in Australia or
are not absent for more than 13 weeks only. For other cases, contact Centrelink for more information.
Asset test for DSP under 21 - non-homeowners
| If you are | For full pension/allowance* | For part pension# |
|---|---|---|
| i)DSP under 21 single - not independent | ||
| 16–17 years | $321,750 | less than $549,000 |
| 18–20 years | $321,750 | less than $578,750 |
| ii)DSP under 21 single-independent | ||
| $321,750 | less than $670,500 | |
| iii)DSP under 21 partnered | ||
| $400,000 | less than $1,093,500 | |
* Assets over these amounts reduce your pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined).
Newstart Allowance/Widow Allowance/Partner Allowance/Sickness Allowance/Special Benefit/Parenting Payment/Youth Allowance/ABSTUDY and Austudy payments are not payable if assets exceed these amounts. see CentreLink website.
Note: Your rate of payment is calculated under both the income and assets tests. The test that results in the lower rate (or nil rate) will apply.
Deeming
What is Deeming, and how does deeming work?
Deeming assumes your financial investments are earning a certain rate of income, no matter what income they are actually earning.
Under the pension income test and allowance income test, any income you get from financial investments is assessed under one simple set of rules, known as deeming.
This means that regardless of the actual (interest or dividend etc) you earn from your investments ie bank accounts or shares etc, for the purpose of calculating your entitlement to the pension
Centrelink deems (assumes) you have received the set interest rate.
Note this is different to the Tax Department. The Tax Department wants you to declare the actual income received.
From 20 March 2012 :
- if you are single and receiving either a pension or allowance, the first $44,600.00 of your financial investments is deemed to earn income at 3.00% per annum
and any amount over that is deemed to earn income at 4.50% per annum.
- if you are a member of a couple and
- at least one of you is getting a pension, the first $74,400.00 (combined) of your and your partner's financial investments is deemed to earn income at 3.00% per annum
and any amount over that is deemed to earn income at 4.50% per annum; or - neither of you is getting a pension, the first $37,200.00 for each of your and your partner's financial investments is deemed to earn income at 3.00% per annum;
any amount over that is deemed to earn income at 4.50% per annum.
- at least one of you is getting a pension, the first $74,400.00 (combined) of your and your partner's financial investments is deemed to earn income at 3.00% per annum
Note: Deeming rates are set by agreement between the Ministers for the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), and the Department of Education, Employment and Workplace Relations (DEEWR).
Extra allowable amount for retirement village and granny flat residents
If your entry contribution is equal to or less than the extra allowable amount at the time of entry, you are assessed as a non-homeowner.
Your entry contribution will count as an asset.
You may qualify for Rent Assistance[2].
The extra allowable amount is the difference between the non-homeowner and the homeowner asset test limits, currently $131,500.
Hardship provisions
If you have assets but little or no income you are expected to rearrange your affairs to provide for yourself.
In some cases that is not possible. If you are in 'severe financial hardship' you may be able to get an income support payment.
Different tests apply to such cases.
More information
- Income assessed by Centrelink
- Rent Assistance
- Phone Numbers Centrelink
- Seniors ( Age Pension, Pensioner Concession Cards, Bereavement assistance, Widow B Pension, Wife Pension, and Commonwealth Seniors Health Card enquiries) 13 2300
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