Changes to the Age Pension Assets Test to commence January 2017
To be eligible for a full or part Age Pension, retirees must meet income test and assets test requirements. The thresholds on the value of assets pensioners can own (excluding their home) before losing entitlements will change on January 1st.
Reports differ, but the general consensus is that 300,000 pensioners will have their payments reduced, 100,000 of which will lose their entitlement altogether.
This is due primarily to an effective doubling of the taper rate – the rate at which a pension is reduced above a certain asset level – from $1. per $1,000 above the threshold, to $3 per $1,000 above.
It is important to note that at the same time, the asset threshold will increase for all categories moving some part-pensioners to full entitlements and allowing others with no entitlement to access the part-payment.
Many retirees, including retirement village residents, structure their finances around these thresholds and taper rates and could find that their circumstances may change as of 2017.
Residents can go to the Department of Human Services or Centrelink websites for more information.