The Assets Test acts to reduce the amount of Aged Pension Benefit you can receive from the Government. You are currently allowed to have the following amount in assets
(excluding your home) before the Aged Pension Benefit is affected.
If you are a Homeowner
- Qualify for Full Pension if assets under
$171,750
$243,500
- Qualify for Part if assets under
$555,750
$882,500
If you are a Non Homeowner
- Qualify for Full Pension if assets under
$296,250
$368,000
- Qualify for Part if assets under
$680,250
$1,007,000
As the above table demonstrates a couple who owns their own home can have total assets (excluding the value of their home) of $243,500 and receive the full Aged Pension. Importantly they can have assets all the way up to $882,500 (excluding their home) and still receive some Aged Pension.
Pension Reduction - Formula Applied
Under the Assets Test, the amount of age pension a person is entitled to, is reduced by $1.50 for every $1,000 in Assets over the threshold (at present $171,750 for a single person and $243,500 jointly for a couple). This rate applies from March 20, 2009.
What counts as an Asset
Briefly the following count as assets (provided as indication only and is not an exhaustive list):
> Financial Assets like Bank Accounts, Shares, Property, Managed Funds etc
> Your total SMSF Superannuation Benefit (if aged over pension age)
> The part of your SMSF Superannuation Benefit used to commence a Pension (if aged under pension age)
> The value of any Motor Vehicles, Boats, Caravans, Antiques or Collectibles
> Your Personal Effects
SMSF Superannuation Benefit
Your SMSF Superannuation Benefit counts as an Asset when determining your eligibility for the Aged Pension only when you become of pensionable age or when you commence a Simple Account Based Pension from your Fund (whichever comes sooner).
Gifting
A common way of reducing Assets to qualify for a higher Aged Pension Benefit is by gifting assets to relatives or friends. To reduce the potential for abuse, individuals are limited to gifting up to a maximum of $30,000 over a 5 year rolling period. For a couple this threshold effectively doubles.
Incomes Test and Assets Test in Practice
Remember both an Assets Test and Incomes Test is applied when determing your eligibility for the Aged Pension. It is the Test that produces the lowest Aged Pension Benefit that applies.
Centrelink
For further information about receiving an Aged Pension, including an application form contact your Centrelink Office.
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