Norma understands how her Age Pension payment is assessed, but is unsure when it switches from being assessed under the income test to the asset test.
I have never been able to understand when you cross over to the asset test asset from the income test when your Age Pension payment is assessed. For example: If I have a lot of savings and I am over the income limit, I understand I start to lose some pension. I understand that when I have over a certain amount of money in the bank it becomes asset tested. But what happens if I do not have very much in savings but have, say, an expensive car and jewellery worth a lot more?
A. As you report any changes in your income and assets, Centrelink will carry out periodic assessments under each test. Should this assessment result in you receiving a lower payment under the test through which you are not currently assessed, then this is the payment you will receive.
Under the income test, a single age pensioner can earn $162 per fortnight (excluding work bonus) in income from shares, investments, interest etc. before their Age Pension is affected. For every dollar over this amount, the Age Pension payment will be reduced by 50 cents. So, if an age pensioner earns $182 a fortnight, their pension payment will be reduced by $10.
Under the asset test, a single age pensioner (who owns their own home) can have $205,500 worth of assets before their Age Pension is affected. For every $1000 over this amount, the Age Pension payment will be reduced by $1.50. So, if an age pensioner has $220,500 in assets, their pension payment will be reduced by $22.50.
This will result in the Age Pension being paid under the asset test method.
For details of what is included in the income and asset test, visit HumanServices.gov.au