Asset reduction rates

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

Asset reduction rates

Robert would like to know if, as well as the asset disqualification limits changing, the rate at which a pension is reduced has been altered.
 

Q. Robert

In the past it was possible to calculate how much the maximum rate of pension would reduce, when the assets limit was exceeded. It used to be $1.50 per $1000.

I can't find a reference to the new rate anywhere. Can you please advise me where to look?


A.
The amount by which your pension is reduced, when you have assets over the allowable limit, for a full Age Pension has remained unchanged. It is still $1.50 per fortnight for every $1000 over the asset limit. This doesn’t appear to be clearly mentioned on HumanServices.gov.au, but there is reference to it at guides.dss.gov.au. You can also use the Rate Estimator at HumanServices.gov.au as a guide to how your pension payment rate may be reduced based on your circumstances.  

What has changed is the asset disqualification limit for part Age Pension and you can find details of the new limits by clicking the link below.

Asset test tables 





    COMMENTS

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    Jurassicgeek
    6th Oct 2014
    10:42am
    I am surprised if pensioners will be allowed any assets before much longer...
    Adrianus
    6th Oct 2014
    11:02am
    I would like to know where you can buy a house for $146,500 these days?
    Anonymous
    6th Oct 2014
    2:49pm
    You can pick up a good holiday camp in Siberia..... maybe a small house in Bulgaria...
    Hillbillypete
    6th Oct 2014
    8:12pm
    Frank open your eye's there are many that price in Innisfail North QLD!
    Gra
    6th Oct 2014
    10:23pm
    Gees, so we all want to move to Innisfail?? I don't think so. No doubt there are a lot of small towns across this country where you can buy a house for that kind of money. Just don't expect to find too many services there, especially health.
    Adrianus
    7th Oct 2014
    8:44am
    Gra, you make a very good point.

    Grappler, you wont get rid of me that easily.

    Hillbillypete, I love Innisfail but do you leave town during cyclone season?
    Pass the Ductape
    7th Oct 2014
    11:06am
    You could buy a house for that price Frank but the land to build it on comes as an optional extra!
    MICK
    7th Oct 2014
    3:14pm
    We all need to see where this government is heading and where our economy is heading.
    Tony Abbott and Joe Hockey have already indicated that they would like to talk about including the family home in the assets test. Its coming folks, but not in this term. My bet is if this bunch of misfits is re-elected then that will be the first cab off the rank. Take note Frank.
    As far as the economy is concerned expect a rough ride. How does the poem go..."into the valley of death rode the 500"? The Australian population is being kept in the dark with how we as a nation are going. We are feeling the pinch but things are still good, although we all know that something is not right.
    What few understand is that we import most of our requirements, we have a growing population who also have the same needs, are exports are falling in dollar terms and we are not in a good state because WE CANNOT PAY FOR OUR IMPORT APPETITE ECONOMY ANY MORE. Solution: lets sell houses to foreigners and freehold (=gone forever) farming land to foreign governments. That's a great idea???? And this is the sort of people we trust to manage the nation.
    Whilst Australians always want to look on the bright side we all as a nation need to address the fact that we have sold off most of our assets to foreigners, that we have no real exports other than mineral (some of which are also owned by foreigners) and that the future is not bright, at all. This is our gift to our children and their children.
    If you don't think that this or successive governments will be after all that you own then please believe in the tooth Fairy again. The facts are there for people to see if they so choose.
    Adrianus
    7th Oct 2014
    7:11pm
    mick, you are obviously worried about your own personal circumstances like all of us when change is in the wind.
    I haven't felt at ease with the economy since ALP took office 2007/8.
    Soon after our banks started to look shaky and NAB had to borrow around $5b from the US Federal Reserve just to hang in. So too did WBC but not as much. Then from 2010 the Gillard government started auctioning Treasury Bonds with a regularity we have not seen in Australia. I've got no idea what was going on there? Do you know?
    MICK
    8th Oct 2014
    2:12pm
    Frank: I am not aware of the Treasury Notes, but the bigger picture has little to do with the ALP and is more an issue of EVERYTHING up for sale. They call it "foreign investment" but it is really a sell off of the next generation and I take exception to any government(s) doing this to all of our children and theirs.
    The Abbott government and state liberal governments are currently flogging off anything they can, not that Labor was not guilty of a similar game...but not to the same extent.
    The question who have to ask yourself Frank is WHO gains from this? What we all need to get our minds around is that he government of the day is hiding the fact that the country is going down the gurgler by inflating the figures with imported money. The other side of the ledger is that the rich are doing very nicely out of the continual sale of public assets as well and are more than likely the drivers of the acceleration of this.
    In the end real jobs are disappearing fast because the idiots who run this country (both sides) believe that you can compete with $2 an hour labour rates in the developing world. You can't. So you cook the books by selling assets cheaply into the public sector and to overseas investors and foreign governments so that you 'create' new money and hide the truth. But this game will end in the next 50 years or so because when it is all gone it is all gone. The and only then will the public realise what has bee done to them by their forefathers in politics and as Roger Montgomery said earlier this year....welcome to "serfdom".
    I know.............lets look on the bright side and not doomsday. More importantly lets look at which way the tide is flowing and see what is happening rather than wish that it all ends well.
    nan
    6th Oct 2014
    1:11pm
    problem is that you can't earn $1.50 a fortnight in interest so you are losing money every fortnight.
    Anonymous
    6th Oct 2014
    5:08pm
    How does that work Nan ?
    nan
    6th Oct 2014
    6:18pm
    Soloman. once you are asset tested for every $1000 over a certain amount centrelink deduces $1.50 from your pension. So if you don't make that amount of interest, which is becoming difficult, you are losing. Plus an asset is not just money. a $10000, which earns nothing is also counted, even the cash value of life insurance. To answer your other question: I need my car, my husband has life insurance, we have household goods. All those are counted as assets.

    6th Oct 2014
    5:09pm
    If you're in a pension then why do you need assets?
    niemakawa
    6th Oct 2014
    7:30pm
    If you are on a pension, why live?
    Anonymous
    6th Oct 2014
    9:24pm
    What have you got against those drawing a pension Niemakawa
    Gra
    6th Oct 2014
    10:21pm
    I think what niemakawa was getting at was your comment about not needing assets if you're on a pension. Pensioners would still like somewhere to call home, some way of getting around, something to keep their food in, something to sleep on and perhaps a small TV for a bit of entertainment. These are all classed as assets. If a pensioner has recently retired then their family home is probably their major asset - why should they have to sell that just to survive?
    Anonymous
    6th Oct 2014
    10:59pm
    All those assets you mention especially the house and car don't count when assessing pension entitlement
    nan
    7th Oct 2014
    8:23am
    Soloman. The house you live in is not counted but your car certainly is. We have been paying in to life insurance for over forty years and now the cash value is counted as an asset even though we are making payment paying.
    Pass the Ductape
    7th Oct 2014
    11:24am
    Yes you are quite right nan!

    Soloman - everything you own - and I mean everything - from life insurance, boat, superannuation, motor mower, car/s, knives and forks in the drawer to the very clothes on your back is classed as an asset. In other words, anything you could sell to realise a value - save the value of your house and the land your house is built upon - but only up to five acres in size. Any acreage over five acres is classed as an asset. What Centrelink has never been able explain to me is why - if the land over and above the allowable five acres cannot be sold off separately or is unable to realise any other value - is it still classed as an asset? Surely it should be classed as a liability!
    Pass the Ductape
    7th Oct 2014
    11:24am
    Yes you are quite right nan!

    Soloman - everything you own - and I mean everything - from life insurance, boat, superannuation, motor mower, car/s, knives and forks in the drawer to the very clothes on your back is classed as an asset. In other words, anything you could sell to realise a value - save the value of your house and the land your house is built upon - but only up to five acres in size. Any acreage over five acres is classed as an asset. What Centrelink has never been able explain to me is why - if the land over and above the allowable five acres cannot be sold off separately or is unable to realise any other value - is it still classed as an asset? Surely it should be classed as a liability!
    Adrianus
    7th Oct 2014
    2:32pm
    nan, My understanding is, the house you live in is counted, and valued at $146,500. Isn't it? Because if you don't have a house then your threshold goes up by that amount. This is why I asked "where can you buy a house for $146,500?"
    nan
    7th Oct 2014
    4:42pm
    Frank. No your house is not counted, You can live in a caravan or a million dollar house and its treated the same. But your furniture is.
    Adrianus
    7th Oct 2014
    6:50pm
    nan, yes that's right. If you have a caravan valued at $50,000 or a house valued at $1,500,000 they are treated the same. Both are valued at $146,500 for the purpose of calculating your pension benefit. However if you are renting then your threshold increases by $146,500. I could be wrong? I'm just asking the question to clarify it in my own mind?
    nan
    7th Oct 2014
    7:45pm
    nan
    7th Oct 2014
    7:42pm
    removeFrank. Well I didn't quite see it that way. But you're right that if you don't own a house you are allowed to have more cash in the bank, but even that is counted differently according to whether you're married or not. But you are still deemed on that money. It gets very complicated.
    Anonymous
    8th Oct 2014
    6:23am
    Thanks nan and duck tape.
    And nan, please don't remove Frank. He may be a be a bit slow but he's alright (liberal not labor)
    Adrianus
    8th Oct 2014
    9:15am
    I am moved but not removed.
    Adrianus
    8th Oct 2014
    9:22am
    Ductape, an illogical question perhaps? if your land is a liability, then why not give it to someone?
    nan
    8th Oct 2014
    10:24am
    Sorry Frank. Did not want to remove you. :)
    fletch
    7th Oct 2014
    4:50am
    I am about to unsubscribe from this news letter.Too many people pointing the finger and yes not to themselves for their own retirement.If some for you,think you can buy or live overseas,than go.It is true,I am going to receive so much negative replies,it does not matter.What does matter,only retire and surround yourselves with people who have a better outlook in life,than some for the comments posted.I am 64 and not long to retire.
    Adrianus
    7th Oct 2014
    2:42pm
    fletch,
    Very wise words. Surround yourself with happy people who have a sunny disposition and a zest for life. Enjoy your retirement.
    Anonymous
    8th Oct 2014
    6:25am
    If you don't have friends, I understand marijuana also works just as well
    Adrianus
    8th Oct 2014
    1:37pm
    Off subject a little.
    How are the marijuana vending machines going over there? Are they being used well and for their original intended purpose?


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