Changes to Age Pension assets test from 1 Jan 2017


Changes to Age Pension assets test from 1 Jan 2017 

The government’s changes to the Age Pension could affect your retirement income and potentially your retirement lifestyle. It is important to understand what the changes are, and what it means for you.

The Age Pension and Assets Test Explained

The Centrelink Age Pension assets test works by reducing your Age Pension payment for every dollar of assets you own over a certain value. The test takes into account most assets, including any property (except your primary home) or possessions owned, or partly owned, in or outside Australia. The assets test is one of two means tests used by Centrelink to determine your Age Pension eligibility, the second being an income test. The test that produces the lowest Age Pension payment, or zero, is then applied.

What are the changes?

On 1 January 2017, there will be changes to the assets test used to calculate pensions, and some will benefit and others maybe worse off.

The Government will increase the Assets Test threshold, and you will be entitled to the full pension if your assets are below:

For homeowners For non-homeowners
Single $250,000 $450,000
Couple combined $375,000 $575,000
Illness separated couple combined $375,000 $575,000
One partner eligible, combined assets $375,000 $575,000


From 1 January 2017, your pension will be reduced by $3 per fortnight for every $1,000 of assets you own over the full pension limit. That will mean $10,000 in extra assets will reduce your pension by $30 per fortnight. You will be entitled to no pension if your assets are above:

For homeowners For non-homeowners
Single $542,500 $742,500
Couple combined $816,000 $1,016,000
Illness separated couple combined $960,000 $1,160,000
One partner eligible, combined assets $816,000 $1,016,000


The change in Age Pension for a couple who are home owners has been estimated below.

Assessable Assets Current Age Pension 1 Jan 2017 Age Pension Reduction in Entitlement p.a.
$450,000 $28,266 $28,402 $136
$500,000 $26,316 $24,502 -$1,814
$550,000 $24,366 $20,602 -$3,764
$600,000 $22,416 $16,702 -$5,714
$650,000 $20,466 $12,802 -$7,664
$700,000 $18,516 $8,902 -$9,614
$750,000 $16,566 $5,002 -$11,564
$800,000 $14,616 $1,919 -$12,697
$850,000 $12,666 $0 -$12,666


The immediate impact with a reduced pension is a reduction in cash flow.

How you can prepare for the changes

Actions you can take to offset the reduction in your Age Pension entitlement may include:

  • Increasing the drawdowns from your savings or from your income streams;
  • Ensuring your non-financial assets are reported to Centrelink at the value you could sell them for second-hand;
  • Tightening your budget.

You must report changes to your circumstances, such as increased Account Based Pension drawdowns, to Centrelink within 14 days.  However, increasing income stream drawdowns may impact your Age Pension entitlement under the Income Test.

You could also look at some Asset reduction strategies such as:

  • Purchasing a lifetime annuity;
  • Contributing to super in the name of a spouse under Age Pension age;
  • Investing in a funeral bond;
  • Pre-paying funeral expenses;
  • Gifting your assets to the allowable limits;
  • Pre-paying bills;
  • Bringing forward planned capital expenditures such as home renovations.

Want to learn more?

We expect Centrelink will communicate further information on the changes with you in the next few months. If you have questions or require specific advice on your own situation, you should contact your Adviser for a discussion as soon as practical.



This information has been prepared by Primestock Securities Limited, AFSL 239180 (“Prime”). The information is of a general nature only and is not intended to be, and is not a complete or definitive statement of the matters described in it. It has been prepared without taking into account your personal objectives, financial situation or needs. It should not be relied upon as a substitute for financial or other specialist advice. Prime accepts no obligation to correct or update the information or opinions in it. Before making any decisions on the basis of this information, you should consider the appropriateness of its content having regard to your needs and financial situation. It is recommended that you obtain financial, legal and taxation advice before making any decision.



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