Age Pension Means Test changes July 2019

Age Pension means test allowance increase July 2019

The Pension Allowances are the starting points for the Income Test and Assets Test that can reduce the amount of DSP or Age Pension actually payable.
Pension Allowance amounts increased slightly on 1 July 2019. This means that an Age Pensioner could have a little more Income and/ or a little more Assets before her Pension is reduced.

DVA pay the Service Pension to eligible veterans and their partners. The Service Pension is paid at the same rates and subject to the same means testing as the Age Pension from Centrelink.

Age Pension means test allowance increase July 2019 for Singles

Income Test Allowance for a Single Pensioner

For a Single Disability Support or Age Pensioner, the Income Allowance has increased by two dollars per fortnight to $174 per fortnight. If a Single Pensioner has more than $174 per fortnight of Income at Centrelink, then her DSP or Age Pension could be reduced by fifty cents for each additional dollar of income over $174 per fortnight.

A Single DSP or Age Pensioner could have an Income at Centrelink of $1,859.20 per fortnight, $48,340 per year, and retain one dollar per fortnight of Pension plus the full rate of Pension Supplements provided that the Asset Test had not excluded her from the Pension.

Asset Test Allowance for a Single Pensioner

A Single Pensioner who is not a ‘Homeowner at Centrelink’ may have $473,750 of Assets and not be impacted by the Assets Test.
A Single homeowner could have Assets of $263,250 in addition to her home, before the Asset Test starts to impact.

The amount of DSP or Age Pension payable reduces by three dollars per fortnight, $78 per year, for each additional $1,000 of Assets over the Allowance.

Thus a single non-homeowner Pensioner could have $754,600 of Assets, and retain one dollar per fortnight of Pension plus the full rate of Pension Supplements provided that the Income Test had not excluded her from the Pension.

A single Pensioner could have $544,100 of Assets in addition to her home, and retain one dollar per fortnight of Pension plus the full rate of Pension Supplements provided that the Income Test had not excluded her from the Pension.

Age Pension means test allowance increase July 2019 for couples

Income Test Allowance for a Pensioner Couple

The Income Allowance for a Pensioner Couple at Centrelink has increased by four dollars per fortnight to $308 per fortnight. Thus if an Age Pensioner Couple has more than $308 per fortnight of Income at Centrelink, then their combined Age Pension could be reduced by fifty cents for each additional dollar of income over $308 per fortnight.

Where only one member of the couple at Centrelink is eligible for DSP or an Age Pension, the Pension payable to that member of the couple is reduced by twenty five cents for each dollar of Income that the couple have in excess of the Income Test Allowance of $308 per fortnight.

Asset Test Allowance for a Pensioner Couple

A Pensioner couple at Centrelink, who are not ‘Homeowners at Centrelink’ may have $605,000 of Assets and not be impacted by the Assets Test.
A homeowner couple at Centrelink, could have Assets of $394,500 in addition to their home, before the Asset Test starts to impact.

The combined amount of Age Pension payable to a couple at Centrelink reduces by three dollars per fortnight, $78 per year, for each additional $1,000 of Assets over the Allowance.
Where only one member of the couple at Centrelink, is eligible for DSP or an Age Pension, the amount of Pension payable to that member of the couple is reduced by $1,50 per fortnight for each additional $1,000 of Assets that the couple have in excess of the Asset Test Allowance.

Age Pension means test allowance increase July 2019 Age Pensioner Couple Income and Asset Test cut offs

An Age Pensioner couple living together could have a combined Income at Centrelink of $2,847 per fortnight, $74,000 per year, and each retain one dollar per fortnight of Age Pension plus the full couple rate of Pension Supplements provided that the Asset Test had not excluded them from the Age Pension.

A couple living together in their own home could have additional Assets of $817,700 and each retain one dollar per fortnight of Age Pension plus the full couple rate of Pension Supplements provided that the Income Test had not excluded them from the Age Pension.

A non-homeowner couple living together could have Assets of $1,028,200 and each retain one dollar per fortnight of Age Pension plus the full couple rate of Pension Supplements provided that the Income Test had not excluded them from the Age Pension.

Age Pension means test allowance increase July 2019 Age Pensioner couple separated by Illness

A couple living together are assumed to share some household expenses. Remember that a couple at Centrelink is any two adults who share domestic arrangements and present socially as a couple. Consequently the per person Couples rate of Age Pension is lower than the Single person rate.

But if at least one member of the couple moves into residential aged care then they become a ‘couple separated by illness’. Each member of a ‘couple separated by illness’ is entitled to the single rate of Pension but subject to the couples means testing.

An Age Pensioner couple separated by illness could have a combined Income at Centrelink of $3,678.40 per fortnight, $95,600 per year, and each retain one dollar per fortnight of Age Pension plus the full single rate of Pension Supplements provided that the Asset Test had not excluded them from the Age Pension.

As from July 2019, a non-homeowner Age Pensioner couple separated by illness could have $1,166,000 of Assets, and retain one dollar per fortnight of Pension plus the full single rate of Pension Supplements provided that the Income Test had not excluded them from the Pension.

An Age Pensioner couple separated by illness could have $956,000 of Assets in addition to their home, and each retain one dollar per fortnight of Pension plus the full single rate of Pension Supplements provided that the Income Test had not excluded them from the Pension.

July 2019 reduction in deemed financial income

Centrelink and DVA, use ‘deeming’ to calculate the income from a pensioner’s financial assets for the Pension Income Test.

The good news is that firstly the amount of financial assets that is assessed as earning the lower deeming rate increased slightly.
These small increases in the changeover amounts before the higher deemed interest rate starts could reduce your deemed income a little.

The Centrelink deeming calculation changeover amount was increased on 1 July 2019 to $51,800 for a single pensioner and $86,200 for a Couple at Centrelink.

Secondly in mid July 2019, the Government announced a reduction in the deemed interest rates backdated to 1 July 2019.

From July 2019, the Deemed Income from financial assets for a single pensioner is calculated as 1.0% per annum on the first $51,800 of financial assets plus 3.0% per annum on any balance above $51,800.

From July 2019, the Deemed Income from financial assets for a pensioner couple is calculated as 1.0% per annum on the first $86,200 of the combined financial assets of the couple plus 3.0% per annum on any balance above $86,200.

Impact of Age Pension means test allowance increase July 2019 on your Age Pension rate

The impact of the Age Pension means tests could be lessened slightly by the changes in deeming rates and the increase in the Age Pension means test Allowances.

If your June 2019 Age Pension rate was less than the maximum Pension rate then you could expect a small increase in your Pension payment rate in July 2019.
For example, these changes in the deeming amounts could result in a $20 per fortnight increase in the Age Pension payment to a single pensioner with $100,000 of financial assets.

Help to understand how your situation fits in the Age Pension system.

Christine at Financial Care Services writes these Insights. She can help you to understand your Age Pension situation.

Ask Christine to help you navigate your Age Pension challenge.

Contact Christine at Christine@financialcareservices.com.au or call 03 9808 0338 to book a consultation.

Christine at Financial Care Services is experienced with Pension Applications and the many Centrelink financial means tests.
Financial Care Services helps seniors with Centrelink Pension issues. Christine at Financial Care Services could help you check if you are eligible for an Age Pension.
An estimate of your potential Age Pension amount before you apply could spare you a rejection letter from Centrelink.

Financial Care Services offers ‘personal financial factual information’ consultations to help you check your asset and income position against the Centrelink Pension means tests. Christine is also able to assist with filling in your Centrelink forms ready for you to sign. She can accompany you to a Centrelink office to lodge your Pension claim form and show your proof of identity documents.

Financial Care Services is a fee-for-service practice. Clients of Christine Hopper at Financial Care Services pay fees for personal financial factual information consultations and general advice. We charge hourly rate fees for ‘personal financial factual information’ consultations, assistance with personal data collation, completing Centrelink forms and attendance at a Centrelink office with you.

Email Christine@financialcareservices.com.au now for her Client Services Guide and Financial Care Services Age Pension Personal Data Checklist.

Financial Care Services – call (03) 9808 0338
Disclaimer. These Insights are a general over view based on our understanding of the Centrelink and DVA Pension arrangements. Individual entitlements to Centrelink and DVA benefits are determined based on your actual situation as documented to Centrelink or DVA. The information contained in this website is of a general nature only and does not constitute “financial advice”.

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