Income and asset tests

You can still receive a certain amount of income and receive an Age Pension. This income can be derived from investments, property rental or as a salary from employment, as well as several other means.

Exceeding the fortnightly income limit will see your pension reduced by 50 cents for every $1 over the limit, until you reach the disqualification limit for a part Age Pension, at which point your Age Pension payment will cease.

For those who have reached the Age Pension age but continue to work, the Work Bonus may mean that you still qualify for a part, or even full Age Pension depending on your income. Under the Work Bonus, the first $300 of fortnightly income derived from employment (from 1 July 2019) is excluded under the income test. Should your work be seasonal or sporadic, you can ‘bank’ any unused amount up to $7800 (from 1 July 2019), which can then be used to reduce your income as and when required.

Limits for the full Age Pension are indexed on 1 July each year and the limits for part Age Pensions are indexed in March, July and September of each year. Details of the current income limits can be found in the table below.

Asset limits
Asset test limits are used to determine whether you qualify for an Age Pension and if so, at which rate it will be paid. Your fortnightly Age Pension payment is reduced by $3 for every $1000 you exceed the full Age Pension asset limit. Once you exceed the limits for a part Age Pension, your Age Pension payment will cease.

Your assets, whether held within or outside of Australia will normally be assessed at their market value. Any debt owed against the asset will normally be deducted from the calculation.

There are certain assets which are exempt from assessment, such as your main residence if you’re a homeowner, certain pre-paid funeral products and accommodation bonds paid when entering an aged care facility.

You can view what is regarded as an asset by Centrelink, as well as an explanation of what is included in each asset class, and which assets are exempt, at ServicesAustralia.gov.au.

You also need to be wary of reducing your assets in order to qualify for an Age Pension, as Centrelink considers this a deprived asset under gifting rules, and will assess it as such. The limits for gifting are $10,000 in any financial year, but limited to $30,000 over five years.

Asset limits for full Age Pensions are indexed each year on 1 July and the limits for part Age Pensions are indexed in March, July and September of each year.

Lump-sum withdrawals

Beth wants to know if a lump-sum withdrawal will affect her Age Pension.

Is Newstart classed as income?

Does a wife's claim for the Newstart Allowance affect her husband's Age Pension?

Asset reduction rates

Robert would like to know if the rate at which a pension is reduced has been altered.

Is her super an asset?

Richard is concerned that he will have to pay back the Age Pension he has received.

Granny flat rules

Will building her daughter a flat on her property affect Lyn's Age Pension?

New rules for reversionary pensioners

Many pensions ‘grandfathered' under existing rules could lose their special exemption.

Using super to pay out mortgage

Could Jenny use her super to pay out her mortgage and still get an Age Pension?

How much will be exempt?

Will downsizing be a blessing in disguise for Graham?

Rent a room

Maurice Patane answers Linda's question about renting out a room in her house.

Will downsizing affect my pension?

Elise is unsure how the proceeds of her house sale and gifting may affect her Age Pension.

Will I lose my part Age Pension?

How will a casual income affect Peter's part Age Pension?

Gift or income?

Is the money Brian received from his son a gift or income?

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