The Federal Government passed changes to the assets test for determining entitlement for the age pension. These changes are expected to take effect in 2017.
The assets test is used to work find out:
- Eligibility for the Commonwealth age pension, and
- How much age pension you can receive each fortnight.
Only those people who have assets with a total value less than a defined threshold, are able to receive the full pension. If total value of assets is above said threshold, then the pension will be lowered.
From 2017, the assets threshold will increase which means that more Australians will qualify for the age pension. The assets threshold is in addition to the value of your home.
|Homeowner||Not a Homeowner|
If you are eligible for age pension and the total value of your assets above the threshold listed in the table, then the amount of pension you receive will decrease.
The current rate decreases the pension by $1.50 per fortnight for every $1,000 value above the threshold.
However, in 2017, it will decrease by $3.00 per fortnight for every $1,000 you have over the threshold.
What is considered an asset?
Most things that you own, or receive an income from, will be regarded as an assets for the purposes of the assets test.
What is not included in the asset test?
It’s worth nothing that your family home is not included in your total assets. However, there are different rules for contributions paid to live in a retirement village. Some farm related assets, funeral plans, private trusts and carer payments although these may also be exempt.
Since each person has a unique asset portfolio, it is important to seek the advice of professionals in these matters.
If you have questions or are seeking clarity on superfund issues, don’t hesitate to ask one of our specialist Superannuation advisors. Contact us here or book for a no-cost consultation to discuss your wealth management plans today.
GENERAL ADVICE WARNING: This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.
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