The start of a new financial year is just days away and that brings good news for about one million older Australians.
The income and assets tests thresholds for the Age Pension are set to be adjusted, meaning pensioners should see a small but welcome Age Pension increase.
Given the rapid rise in living costs, any extra income gained by full and part age pensioners is valuable. Plus, the changes also assist anyone receiving a carer’s payment or a Disability Support Pension.
The increase to income and asset limits take place on 1 July as part of annual indexation measures applied to the means test.
Pensioners receiving a part rate will benefit from the amended free areas due to the increased amount of income and assets allowed before payments are affected.
The Age Pension, Disability Support Pension and Carer Payment single income free area will increase by $10 to $190 per fortnight, and the couple combined income free area will increase by $16 to $336 per fortnight. This should lead to a small increase in fortnightly payments.
The number of assets a pensioner couple who own their home can have before it affects their rate of payment will increase to $419,000 (excluding their home) – up from $405,000, which will also flow through to increase their payment each fortnight. A single homeowner will be able to have $280,000 in assets, up from $270,500.
For non-homeowners, the new thresholds are $643,500 for couples (a $22,000 increase) and $504,500 for singles (up by $17,500).
The disqualifying asset thresholds will also change on 1 July, which will increase the number of Australians who may become eligible to receive a pension payment.
The asset thresholds for eligible couple homeowners increases by $14,000 to $915,500 and for non-homeowner couples by $22,000 to $1,140,000. For eligible single homeowners, the increase is $9500 to $609,250 and for single non-homeowners $17,500 to $833,750.
Deeming rate thresholds will increase – to $93,600 for eligible couples (up by $4600) and by $2800 for eligible singles (a $2800 increase). Deeming has been frozen until 2024.
More Australians of Age Pension age will also qualify for the Commonwealth Seniors Health Card (CSHC) after 1 July. The means-tested card provides concessions on health-related costs for eligible seniors. It offers access to cheaper medicines and medical bulk billing, as well as state and federal concessions.
Social services minister Amanda Rishworth says the increases are coming at an important time given skyrocketing living costs.
“The indexation process complements the levers we are pulling across portfolios to help address the rising cost of living,” she says.
“We will continue to support Australians by cutting the cost of medicines on the PBS, freezing deeming rates for pensioners, expanding access to the Commonwealth Seniors Health Card, lowering energy costs and making childcare cheaper.”
She explained that social security and family payments had a built-in safeguard which and was automatically indexed at regular intervals to help them maintain purchasing power.
You need to be 66 years and six months to be eligible to receive the Age Pension. The pension eligibility age has been slowly rising from 65 to 67 years, increasing by six months every two years. The final change will take effect on 1 July 2023, when the pension eligibility age will reach 67 years.
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